13 Richard Koch Quotes to Sharpen Your Life and Business
Richard Koch, the mind behind The 80/20 Principle, took a consulting firm (LEK) from roughly $4M USD to about $500M USD, mostly by way of private equity investing. He also works behind the scenes with Perry Marshall on selected projects. His books brought Pareto's principle back to life and turned it into a familiar phrase. What follows are the ideas that make him one of the most practical thinkers on getting more from your time and effort.
On the Power of Focus
Chase excellence in a few things rather than settling for decent results across many. Sunlight only warms the earth, yet focused through a Fresnel lens it can melt obsidian and steel. That is the kind of force you unlock when you aim critical thinking at high-value problems.
Zen Mind, Beginner's Mind
Kuhn's observation is striking: the sharpest minds on an important issue are often fairly new to it. Innovation often comes from outside an industry — Uber versus taxis, Airbnb versus hotels, Henry Ford adapting the assembly line from meat-packing. That's why Jay Abraham urges studying innovations beyond your own field; blending them with your current strategy can yield highly profitable insights.
On Thinking Exponentially in Business
Everything that counts in business is exponential, not linear. Think in multiples of 10. The 80/20 rule is fractal. Life and business are skewed distributions, not the Gaussian curve or straight line we tend to assume.
On the Power of Targeting
Selling to the RIGHT person matters more than every sales method, technique, and tactic put together. Hiring follows the same logic — as Jim Collins says, you need the right people in the right seats on a bus headed the right way. Direct response 101: List. Offer. Copy. In that order. Who you sell to (the List) comes first.
On Working Smart Over Working Hard
Sales aren't profit, and profit isn't cash. Produce the most cash for the least human energy and capital. This mirrors the Wall Street Playboys' take on efficiency: working hard means solving problems, not logging hours.
On Honing Your Ability to Think
It isn't about hard work — it's about hard thinking. You can dig a ditch with a spoon, invent a Ditch Witch, or pay others to dig it for you. When you're stuck, ask often: "Am I solving the right problem?" Getting stuck usually comes down to a few causes:
- Not reasoning from first principles
- Not accurately and clearly defining or naming the problem
- Not being clear on the desired outcome(s)
Example: needing to track an event on a page, I reframed "I want to track this event" as "I NEED to find the GTM account." I didn't. A simple piece of inline JavaScript in an anchor tag solved the real problem.
On Leveraging Your Energy and Skillset
Do you take your objectives seriously, or spread average effort across too many things instead of putting superior thought into a few important ones? Great journaling prompt. Koch adds: "Few people take objectives really seriously. They put average effort into too many things, rather than superior thought and effort into a few important things. People who achieve the most are selective as well as determined." Selectivity and discernment. I nearly went full tilt testing a new offer (~70% ROI for ~30 days), learned I had no competitive advantage, paused it, and stopped burning money. It can always restart later.
On Distinct Advantages as Your Unique Selling Point
Businesses and people who make it big are always highly differentiated — they make you aware of what sets them apart. They pour energy into areas where they differ substantially from rivals and are superior in some way.
On Hiring A-Players
Only hire the very best people in your field. If you make a hiring mistake, fix it quickly. Recruit to raise the average — only hire someone who will land in the top 20% of the firm. Do whatever it takes to hire and keep 'A' players. Read the full article on this subject.
On Distinguishing Yourself in a Field and in Life
What could you achieve that would make you proud, that no one else could do with the same ease? What feels easy to you but hard to others is probably a unique skill — your "talent stack."
On Business Strategy
A business strategy shouldn't be a grand, sweeping overview. It should be more of an under view — a peek beneath the covers at what is really going on, in great detail.
On Dominating Without Competition
The standard view says businesses should keep a lead over rivals. That's wrong. A lead connects two parties. Seek an ever-growing distance from competitors instead — easier to achieve than an ever-growing lead, and far more valuable. To gain a lead you do things better; to put distance between you and them, you go in a different direction, ideally the opposite one. Find out more here. This parallels Peter Thiel's monopoly advice: be #1 in your field, and if you aren't, carve out a space where you can be and stake your claim — even something as niche as "#1 Keto ______ for diabetic women over 35 trying to get pregnant."
On How to Win in Business
Business is really a book of bets, but one where you can beat the house — the required rate of capital return. Act soberly and weigh the odds, but don't fear flair or going against conventional wisdom. Respect what the market is saying, even if you don't fully understand it. Back what is working better than it 'should.' Deploy intuition and sheer brass neck. This isn't just how to make business more fun — it's how to win, at least in the long run.
Recommended Richard Koch Books to Upgrade Your Life
The 80/20 Principle shows you how to apply it to cut the crap and do more with less.
The 80/20 Manager — if you manage people or run a business, it covers 10 leadership/management styles, each with various strengths. Here's what Perry Marshall had to say about it: The 80/20 Manager on Amazon.
The Star Principle — wonder how Richard flipped all that dough? By investing in companies that fit the criteria he outlines. Extrapolate those criteria to other things, like selecting an affiliate offer to promote or hiring an employee. Get The Star Principle.
Simplify — want to dominate your market? It's not easy, but it can be simple. For fun, see this salesletter written by Perry Marshall (or his copywriter John); it'll show you why you want to turn your business into a star company by simplifying your offer to the market. Here's a snippet: Simplify on Amazon.
Get after it.
Next post: Notes on Todd Brown's Titans of Direct Response Takeaways
Previous post: Todd Brown's A.S.I.S.T. Process for Improving Your Funnel Conversion Rate, Sales Message, and Profits
The Boring Stuff: We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. See our terms and conditions and privacy policy.
Home AboutIf you want to put these ideas to work, start with one high-value area and give it your full attention before spreading effort elsewhere. Pair that focus with a clear picture of who you serve and what makes you different, and you'll find the 80/20 mindset becomes a practical filter for decisions rather than just a theory.