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Episode: #752: Terry Crews and Richard Koch

Author: Tim Ferriss: Bestselling Author, Human Guinea Pig
Duration: 03:08:23

Episode Shownotes

This episode is a two-for-one, and that’s because the podcast recently hit its 10-year anniversary and passed one billion downloads. To celebrate, I’ve curated some of the best of the best—some of my favorites—from more than 700 episodes over the last decade. I could not be more excited. The episode

features segments from episode #287 "Terry Crews — How to Have, Do, and Be All You Want" and episode #466 "Richard Koch on Mastering the 80/20 Principle, Achieving Unreasonable Success, and the Art of Gambling."Please enjoy!Sponsors:LMNT electrolyte supplement: https://drinklmnt.com/Tim (free LMNT sample pack with any drink mix purchase)Momentous high-quality supplements: https://livemomentous.com/tim (code TIM for 20% off)Eight Sleep’s Pod 4 Ultra sleeping solution for dynamic cooling and heating: https://eightsleep.com/tim (save $350 on the Pod 4 Ultra)Timestamps:[00:00] Start[04:48] Notes about this supercombo format.[05:52] Enter Terry Crews.[06:17] Terry's art background and growing up in Flint, Michigan.[15:35] A favorite failure.[22:40] Two ways of confronting an abusive father.[30:41] Terry reflects on his favorite Ralph Waldo Emerson quote.[34:20] How Terry coped with imposter syndrome on his first movie set — with Arnold Schwarzenegger.[39:17] Enter Richard Koch.[39:40] Richard's non-story story about wines, spirits, and chat shows.[41:16] Exception to my "no book quotes" policy for Richard.[42:10] Secrets revealed in Oxford's Bodleian Libraries.[47:32] Richard's peculiar talent and its discovery.[50:17] Richard's investing success despite weak numeracy: the star principle.[59:48] Richard's $1.5 million investment decision.[1:03:41] Business "segmentation" in The Star Principle.[1:06:40] Principles governing Richard's portfolio.[1:09:07] Richard's firing from BCG and meeting Bill Bain.[1:19:03] The growth share matrix (Boston box) explained.[1:22:50] What Bain and Company appreciated about Richard.[1:36:07] Results of early partner-like behavior at Bain.[1:40:00] Key takeaways from Perspectives on Strategy and other recommended books.[1:44:06] Richard's preference for principles over knowledge and The 80/20 Principle's origin.[1:57:58] Richard's happiness and time/energy allocation.[2:01:16] Comparing journaling styles.[2:07:24] Adventurers vs. controllers: who has more fun?[2:10:36] Inspiration for Unreasonable Success and How to Achieve It.[2:17:50] Richard's definition of success and nine landmarks of unreasonably successful people.[2:20:56] Landmark one: self-belief.[2:23:40] Landmark two: Olympian expectations.[2:24:34] Landmark three: transforming experiences.[2:32:52] Landmark four: one breakthrough achievement.[2:35:36] Landmark five: make your own trail.[2:35:50] Landmark six: find and drive your personal vehicle.[2:45:24] Landmark seven: thrive on setbacks.[2:47:54] Landmark eight: acquire unique intuition.[2:48:15] Landmark nine: distort reality.[2:48:56] How landmarks reinforce each other.[2:51:24] Nelson Mandela's unique intuition during imprisonment.[2:58:31] Richard's annual question instead of new year's resolutions.[3:01:44] Parting thoughts.*For show notes and past guests on The Tim Ferriss Show, please visit tim.blog/podcast.For deals from sponsors of The Tim Ferriss Show, please visit tim.blog/podcast-sponsorsSign up for Tim’s email newsletter (5-Bullet Friday) at tim.blog/friday.For transcripts of episodes, go to tim.blog/transcripts.Discover Tim’s books: tim.blog/books.Follow Tim:Twitter: twitter.com/tferriss Instagram: instagram.com/timferrissYouTube: youtube.com/timferrissFacebook: facebook.com/timferriss LinkedIn: linkedin.com/in/timferrissPast guests on The Tim Ferriss Show include Jerry Seinfeld, Hugh Jackman, Dr. Jane Goodall, LeBron James, Kevin Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew McConaughey, Esther Perel, Elizabeth Gilbert, Terry Crews, Sia, Yuval Noah Harari, Malcolm Gladwell, Madeleine Albright, Cheryl Strayed, Jim Collins, Mary Karr, Maria Popova, Sam Harris, Michael Phelps, Bob Iger, Edward Norton, Arnold Schwarzenegger, Neil Strauss, Ken Burns, Maria Sharapova, Marc Andreessen, Neil Gaiman, Neil de Grasse Tyson, Jocko Willink, Daniel Ek, Kelly Slater, Dr. Peter Attia, Seth Godin, Howard Marks, Dr. Brené Brown, Eric Schmidt, Michael Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan Peterson, Vince Vaughn, Brian Koppelman, Ramit Sethi, Dax Shepard, Tony Robbins, Jim Dethmer, Dan Harris, Ray Dalio, Naval Ravikant, Vitalik Buterin, Elizabeth Lesser, Amanda Palmer, Katie Haun, Sir Richard Branson, Chuck Palahniuk, Arianna Huffington, Reid Hoffman, Bill Burr, Whitney Cummings, Rick Rubin, Dr. Vivek Murthy, Darren Aronofsky, Margaret Atwood, Mark Zuckerberg, Peter Thiel, Dr. Gabor Maté, Anne Lamott, Sarah Silverman, Dr. Andrew Huberman, and many more.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Full Transcript

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00:02:27 Speaker_02
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They currently ship to the United States, Canada, the United Kingdom, Europe, and Australia.

00:04:16 Speaker_00
Now would've seen an appropriate time. What if I did the opposite?

00:04:22 Speaker_03
I'm a cybernetic organism, living tissue of a metal endoskeleton.

00:04:33 Speaker_02
Hello boys and girls, ladies and germs, this is Tim Ferriss.

00:04:36 Speaker_02
Welcome to another episode of the Tim Ferriss Show, where it is my job to sit down with world class performers from every field imaginable to tease out the habits, routines, favorite books, and so on that you can apply and test in your own lives.

00:04:49 Speaker_02
This episode is a two for one, and that's because the podcast recently hit its 10th year anniversary, which is insane to think about, and passed 1 billion downloads.

00:04:59 Speaker_02
To celebrate, I've curated some of the best of the best, some of my favorites from more than 700 episodes over the last decade. I could not be more excited to give you these super combo episodes.

00:05:11 Speaker_02
And internally, we've been calling these the super combo episodes because my goal is to encourage you to, yes, enjoy the household names, the super famous folks, but to also introduce you to lesser known people I consider stars.

00:05:24 Speaker_02
These are people who have transformed my life and I feel like they can do the same for many of you. Perhaps they got lost in a busy news cycle, perhaps you missed an episode.

00:05:34 Speaker_02
Just trust me on this one, we went to great pains to put these pairings together. And for the bios of all guests, you can find that and more at tim.blog slash combo. And now without further ado, please enjoy and thank you for listening.

00:05:52 Speaker_01
First up, Terry Crews, former NFL player, American film and television star of The Expendables, Everybody Hates Chris, and Brooklyn Nine-Nine, host of America's Got Talent, and best-selling author of six books, including his memoir, Tough, My Journey to True Power.

00:06:12 Speaker_01
You can find Terry on Twitter and Instagram, at Terry Crews.

00:06:18 Speaker_02
I thought we'd start somewhere that perhaps people wouldn't associate you with, if that's even English, but you guys get my drift. And that is art. So I went onto your Instagram profile not too long ago, and I saw a number of different profiles.

00:06:35 Speaker_02
And then I started digging, and I didn't wanna tease out too much because I wanna talk about it. Can you tell us a little bit about your background with art?

00:06:44 Speaker_00
You gotta know, I mean, growing up in Flint, there were a number of obstacles. I mean, crazy, crazy obstacles because I grew up at the height of the crack epidemic and also the demise of the auto industry.

00:07:01 Speaker_00
So there were two things happening at once and they were both horribly bad. I mean, it was like the eighties, probably late seventies, all the way through the eighties into the nineties was literally the walking dead. And it was real.

00:07:17 Speaker_00
I mean, you had people who were cracked out. I had friends, family, who one day, you know, they were good people. The next day, they were stealing everything you had. All the way to everyone you knew were losing their jobs. And it was a panic.

00:07:32 Speaker_00
And I remember there was two ways out. And one was through music and performing. Another way was athletics. But art, you couldn't get paid doing art. You know what I mean? Everybody was like, that's a wonderful picture, but you're a starving artist.

00:07:48 Speaker_00
That's the whole term. And I remember just saying, OK, I'm going to do this art thing, but I had to do the football thing too. And these were my ways out.

00:07:59 Speaker_00
Now, I didn't believe that I was actually going to get any kind of light as an artist, but I had one teacher. One man, Mr. Eichelberg, I'll never forget this. He said, Terry, you are an amazing artist.

00:08:15 Speaker_00
He was like, I'm the art teacher, you're better than me. And he said, you can go somewhere with this. And I was like, okay, but nobody's gonna pay me to do this. It's good, but I gotta use football. Well, he filled out all the applications for me.

00:08:32 Speaker_00
And I didn't even know. This is crazy. And he took my pictures and my paintings and everything that I did, he took and got them photographed, did all this stuff, sent him to Interlochen Arts Academy. Now, Interlochen is this world-famous... Big deal.

00:08:48 Speaker_00
Big, big deal arts camp up in northern Michigan near Traverse City. And you study with people from all over the world.

00:08:57 Speaker_00
And he literally came to me and told me, he already filled out everything and he said, Terry, you have a scholarship from Chrysler, full ride, to go to Interlochen Arts Academy. And I was like, what are you talking about?

00:09:12 Speaker_00
Like, you know, first of all, I didn't think it was possible. This is the deal. There's a lot of things. It's weird because you got to let people believe in you, but I didn't believe in myself. And

00:09:26 Speaker_00
When I got a chance to go to Interlochen and study with people from Europe and from Brazil and from, and these was mainly music students and then they had art students and it was just this, and coming from Flint, I mean coming from the hood.

00:09:41 Speaker_00
And then this changed my life. I remember we had, and it was really big on competition, very, very big on competition. It was like, if you were a violinist, you had to be the first chair and second chair.

00:09:55 Speaker_00
And I remember all these kids were disappointed because they kept moving down and they would just feel like they were crushed. And the same thing with art. We had to do two drawings, and we had the whole class doing all these drawings.

00:10:05 Speaker_00
And they said, put your drawings on the wall, and don't put your name on them. We have this guy coming from the Cleveland Institute of Art. He's going to judge each painting, and we want to see who's the best. And I was like, oh, man.

00:10:19 Speaker_00
And so I did my deal, and I put all, it was a wall full of art. The art guy pointed at mine, and he said, that one's the best one. Then he went all the way across the room, and he said, that one. And they were both mine.

00:10:35 Speaker_00
And I was like, now, life is a confidence game. Because then you couldn't tell me nothing. I was like, damn it, I'm good. I got too arrogant, then I got arrogant. I'm the best one here. And then you have to be humbled some other way.

00:10:58 Speaker_00
But that would let me know, I was like, wow, I can do it. I can do it. I'm really as good. These people, this is all over the world. And then I got a scholarship to Western Michigan University in art.

00:11:14 Speaker_00
But it was small, it wasn't a full ride, but it was a small deal. So I got an art scholarship and walked on to the football team. And my mom passed away about almost three years ago.

00:11:27 Speaker_00
And she always would tell me, she was like, whatever you do, I know you're doing all this football stuff, you're doing all this other thing, but never forget, you're an artist, babe. You're an artist. I'm telling you.

00:11:44 Speaker_00
when I see what I'm doing right now. And I get to do so many things that so many people never got to see. I get to go so many places and do so many things that none of the people who wanted to were able to.

00:12:04 Speaker_00
I feel like there is a responsibility, but also if I don't do it, everything they've gone through, it's nothing. You know, so the way I approached things is really, it's kind of for everyone else. You know, I have to try it. I have to go for it.

00:12:24 Speaker_00
And I knew, even as I was doing football and I was doing all this stuff, I remember once, because football was hard. Football was a very, very, again, another competitive deal. You know, you would get on a team and I would get cut.

00:12:40 Speaker_00
I was like, I have to depend on this art thing because this is what got me here. And so I would go back in the locker room and this is how I was married. I had two kids at the time.

00:12:52 Speaker_00
I'll go back in the locker room and go to the players and I would ask them if they wanted their portraits painted. And the weird thing is they were like, Oh man, come on, man. You can't do it.

00:13:02 Speaker_00
And I would show them my portfolio and they were like, damn dude. And I was like, look, man, I want to paint you over this big, I'm going to put you and you're going to be a giant over the city and I can have wings.

00:13:13 Speaker_00
You can have wings and you can do it. And let me tell you, football players are the most egotistical people in the world. They were like, oh, damn, yeah, man, I want the wings, dog. How much for them wings, man? And I was like, oh, yeah.

00:13:27 Speaker_00
And I would do these masterpieces. But I have to tell you this, too. I did have a scam. I had a scam. This is the scam in college. In college, I would, because what happened is I was playing football.

00:13:40 Speaker_00
But when you play football, you don't get money for supplies. You only get booked loans. See, scholarship is a jip. I'm telling you, the NCAA is a jip, dude, the whole deal. You are not a student athlete. You are semi-pro. That's all it is.

00:13:56 Speaker_00
There's no student in it. Just putting it right now. And what was crazy is that I was like, hey, but I want to study art. They were like, why don't you just study business or something so it's easier to get by? Because the whole thing is just getting by.

00:14:09 Speaker_00
Take a class so you can go to football practice. But I was like, I'm an artist. They were like, okay, whatever. So I would go to these labs and I would make, this is what I had a plan.

00:14:19 Speaker_00
In the summer, I would make like probably 10 paintings and then I would make four of them really suck. Like they would be really, really bad. And I would bring those in in the beginning and these were these labs and I would go to the teachers.

00:14:31 Speaker_00
I was like, man, you know, what's wrong with this? Like, Help me out here." You know, he was like, oh Terry, oh my God, look. Okay, we're going to work on your perspective and we're going to do this. And I was like, yeah, no, help me.

00:14:44 Speaker_00
And then I'd go home and then I'd go to practice for like a month and never do anything else because I had the paintings done. Then I'd bring another one in that was a little bit better.

00:14:55 Speaker_00
And let me tell you, I did this the whole semester, and then I would bring out the masterpieces. And I was, you know, I'd say, look how much you helped me. You took me from here to there, sir. And they were like, you get an A, you were awesome.

00:15:15 Speaker_00
And I, that's how, and I, again, the whole thing was a scam, but I had to survive. I had to find a way to stay in school. Cause this is the thing, a lot of people don't know is that they could take your scholarship. It was crazy.

00:15:28 Speaker_00
It was one of those things where you're there as a body and if you don't perform, they'll find a way to get rid of you. When I,

00:15:37 Speaker_02
was looking at your history and your book and your backstory, one thing that I paid attention to the pattern was an uncommon degree of self-reflection. And so I want to rewind the clock a little bit back to high school.

00:15:51 Speaker_02
One of the stories that you put in Tribe of Mentors is related to my question related to favorite failures or a failure that set you up for later success.

00:16:02 Speaker_00
Could you tell us a little bit about that, please? Oh, man. Yes. That was my senior year in high school. And I went to Flynn Academy and it was a classy school, but we were highly ranked in the state. And I used to be a basketball player.

00:16:19 Speaker_00
I mean, I was, you know, hard to believe now, but basketball was a big sport for me, but I was the starting center. on this team, and what was wild is we were picked to go all the way in the state.

00:16:32 Speaker_00
We had a superstar on our team, and we had a really, really good team. We played against a school who decided not to play. It was the district championship.

00:16:43 Speaker_00
It was right at the beginning of the playoffs, and these guys would take the ball down the court and pass the ball to each other at the top of the court and wouldn't play. And we had a coach who was like, well, you know what?

00:16:57 Speaker_00
I'm going to beat you at your own game. So we stayed in the zone. So we sitting there the whole time. And I'm telling you, it was the most boring game of all time. We just sat there with our hands up, and they passed the ball.

00:17:08 Speaker_00
And if anything happened, somebody went and got it, and you scored two. It was just a mess. So the score was really, really low. They were up 47 to 45. And it was literally under a minute. And I'm freaking out because now we're going to it's evident.

00:17:27 Speaker_00
We're going to lose because I'm going man. This is a dumb defensive strategy. Anyway, we should have been going after it. But what happened is a guy through the ball their guy through the ball cross court. I intercepted it.

00:17:41 Speaker_00
and with literally five seconds left to go. And I take the ball all the way down the court. You gotta understand, I'm thinking, I had visions of, oh my God, this is the thing, I'm the hero. The heart is like pounding.

00:17:57 Speaker_00
I'm already at the party, you know what I mean? And I go with this layup and I bring it up there and it totally, it gets around the rim and it rolls away. And let me tell you, that place goes nuts, because it was the upset of the year.

00:18:17 Speaker_00
And I collapsed in a heat. And I know my life is over. And you got to understand, and this is another thing, shame among men. It's like, oh, how could you do that, man? Other players were yelling at me. The coach, I was in the locker room.

00:18:35 Speaker_00
He was like, you had no business taking that shot. And I stole the ball. It wasn't like, we didn't have a shot anyway. But he was like, you have no business taking that shot. You should have passed it. Man, it's your fault.

00:18:49 Speaker_00
And everybody in the room was like, yep. And I was like, they didn't let me off one. And I remember just going, oh my God. And I went in the paper and the paper the next day was like, Terry Crews had a shot and he missed.

00:19:02 Speaker_00
And let me tell you, it was the most dark. I mean, when you're 16 years old, I was, I mean, beyond crushed. One guy was taunting me. I got in a fight after the school and the whole thing. And I was just like, this is awful. It's horrible.

00:19:19 Speaker_00
And so it was a couple of days went by and I was in the deepest funk. I'm sitting on my bed and I shared my room with my brother. But for some reason he wasn't there because I always remember him being there. It was kind of crazy.

00:19:32 Speaker_00
I don't ever remember being alone except that time. And I remember being alone. And just thinking about, man, I should have passed it. I should have passed it. Maybe I messed up, and what else could I have done?

00:19:47 Speaker_00
And then another little voice, it said, I took the shot. I took the shot. And I was like, I did. I did. And I kept thinking. It was like, man, look, when you had the chance, When everything was on the line, you took your shot, man. You did that.

00:20:13 Speaker_00
You did that. And all of a sudden I was like, that's right. That's right. I took it. And I learned from then on, I said, man, wait a minute. If I win or if I fail, it's going to be on my terms. It's going to be up to me.

00:20:34 Speaker_00
I, if I have the opportunity, I have to go for it. And then I felt really good about losing the game. It was really, it was totally, now this, you can call it reframing.

00:20:48 Speaker_00
A lot of people have scientific ways or psychological ways to, you know, to do things, but I learned always to kind of reframe things so that it's to your advantage. You know what I mean? And you look at these things like, wait a minute,

00:21:02 Speaker_00
You took the shot, man. And this is another thing, because what's so crazy is that no one ever remembers that game. It's one of the least important things in my life. But the lesson I learned is still guiding me today.

00:21:21 Speaker_00
The fact that, go for it, take your shot, take your time. When you get that thing, when you have that opportunity, don't mess it up.

00:21:29 Speaker_00
Because this is another thing, and I want to tell you, Tim, the scariest thought ever is one thing that blew me away, is that you really do get what you want. And let me tell you what I mean. there have been times when you can be self-destructive.

00:21:49 Speaker_00
And you think it's something else, or you think, like, I discovered for a long time, like, if I show up late for something twice, I don't want it. And you get what you desire. Everything about you, you get what you want.

00:22:06 Speaker_00
Now, the way your life is, truthfully, you want it. And now that's hard. That's hard to say because a lot of people are like, no, wait, there's so many other options. It's this and this and this and this.

00:22:17 Speaker_00
But the truth is, is that if you wanted something different, you change it. And that hit me. Like, it's scary because if I failed or if I didn't, if I showed up wrong or messed up on something, I was like, I didn't really do what it took to get it.

00:22:34 Speaker_00
again that comes from taking that shot way back in high school.

00:22:40 Speaker_02
So one of the things I really appreciate about you and that led me to want to reach out to you is how forthcoming you've been about your difficulties and some of the challenges you faced because I think a lot of folks we see on magazine covers and so on

00:22:55 Speaker_02
unfortunately give people the impression that they're flawless. They have it all figured out. And then people feel uniquely flawed in some way that they're damaged because they're not that person. That's unachievable.

00:23:06 Speaker_02
Could you share with us a story of any dark period in your life and how you found your way out of it? Things that helped you to navigate your way out of it.

00:23:20 Speaker_00
There was a lot of dark, dark times. You know what? I'm going to share this story, which changed my life. I was literally just got my first job in entertainment.

00:23:30 Speaker_00
I was on a TV show called Battle Dog, where they literally put me in a cage and I fought my way out. It was so entertaining. It was pre-MMA, you know what I mean? So people hadn't seen Blood on TV yet. You know, we were like the first.

00:23:45 Speaker_00
It was really nuts. People were bleeding, going to the hospital. It was called Real Warriors, Real Pain. And I played this character called T-Money. And that's actually my wife's pet name for me now. She's like, hey, T-Money.

00:23:58 Speaker_00
And we call this the Christmas from Hell. because here I wanted to come home. I went home to Flint, Michigan with my family.

00:24:07 Speaker_00
Now, you gotta understand, my kids, at the time I had three, I have five total now, but I had three kids at the time, and the girls were, and they were all girls, they were very small. They had never grown up with violence in the house, okay?

00:24:22 Speaker_00
They'd never seen it. And so I told my father before I came, I said, hey man, don't act up. Do not act up. And he said, I ain't gonna do nothing. And I'm like, okay. So I'm bringing a family. I know it's Christmas time. So just relax, man.

00:24:40 Speaker_00
And we're gonna be there. It'll be fine. So we get there. We're having a good time. My wife and I are going out. We actually are driving to Detroit to hang with friends. And I get this call. And it was panic. My aunt called me.

00:24:54 Speaker_00
He said, Terry, your daddy hit your mother. In front of the kids, he got mad, he knocked her tooth sideways. And I told him, I told him.

00:25:11 Speaker_00
Now, literally, I stopped the car, we turned it around, I told my wife, okay, we're gonna go over my ass, you take the kids, go to my ass house, the whole thing, I'm done. I'm dealing with this.

00:25:26 Speaker_00
First of all, I went in this house, he had the nerve to still be there. And I said, dude, what are you doing? He was like, shut up, leave me alone. I can do what the hell I want. Boom. Let me tell you something. I beat this guy for about an hour.

00:25:44 Speaker_00
He was pleading for his life. I was like, I'm not a child anymore. I am a grown ass man. And how does it feel? You are about to get what my mother has felt. And I laid it on him. He was hurt, bleeding, laid out. I'm surprised I didn't kill him.

00:26:10 Speaker_00
And I felt not one ounce better. I remember falling on the ground, crying in tears. It didn't make me feel one bit better, not one. Like now I was just down there with him. This is the revenge I've dreamed about my whole life. And now nothing.

00:26:35 Speaker_00
Now I'm just like you. And I remember just feeling empty, cold. It's probably the darkest place I've ever been because this here's the man who's the reason I'm here. And I put him in his place, so to speak.

00:26:55 Speaker_00
And I'll never forget, it was just the most hollow, hollow feeling I've ever had. We got out of there, it took me years to overcome that. Like, we got out of there, I got the kids out, we never came back.

00:27:08 Speaker_00
I mean, we were like, forget the holidays, we're not doing this. But after years of therapy, and this was literally about, about six or seven years ago, What I'm talking about happened like 99, okay?

00:27:23 Speaker_00
So I go back, and I go back to my father, and I've been listening to things and trying to do this thing correctly. And I remember, I just said, I have to find one thing that I can tell him that he did good.

00:27:41 Speaker_00
And I said, and we called him Big Terry, because his name is Terry too. So he said, Big Terry, man, I want to thank you, because if it wasn't for you, I wouldn't be here. And if I had to choose my parents, I'd choose you.

00:28:00 Speaker_00
Because the truth is, he's the reason I'm here. If it was another person, I'd be another person. So I said, if I had to choose my parents, I'd choose you. And let me tell you something. He just broke down. He said, Terry, I'm sorry.

00:28:21 Speaker_00
I'm sorry for beating your mom. I'm sorry for everything I did. Listen, man, those words broke him down. He cried in my arms for about the same time as I was beating him years earlier. And I was like, this is not hollow. This feels good. This is healing.

00:28:47 Speaker_00
And I said, man, I have to use my strength for good. Because everybody can knock somebody out. But to give a hug with muscles is a whole nother matter. And I said, that is how, that's the vulnerability. That's the authenticity.

00:29:12 Speaker_00
That's where real healing takes place. Because shame wants punishment. It just wants to get back, boom, boom, and it's temporary. But guilt develops discipline when you admit I was wrong.

00:29:28 Speaker_00
Shame is when secrets and you don't say anything, but guilt says I did it. I'm sorry. And then you develop discipline to change. Man, again, it was one of the darkest periods in my life, but totally reversed and I decided That's gonna be my life.

00:29:50 Speaker_00
This is who I am. Now, some people got their ass whooped. I'm trying to tell you in between it now. I'm trying to tell you, one thing is some people try to take that and be like, ah, I can push you. I'm like, get out of the way.

00:30:04 Speaker_00
But, but, what I want to say is that the big thing was, is that I knew that would never be, the only way I would ever use that is to protect. It's to protect, not to get back, not for revenge.

00:30:23 Speaker_00
There's a time, but I'm telling you, man, that was a period that I learned forever. Now again, my father, I wish I could say he changed. He kind of went back through his old ways, but I'm healed. And I did the things I needed to do.

00:30:42 Speaker_02
I'm going to ask one more question and it's related to a question that I posed to you in the book because whether it's looking at some of your early decisions as a child or the toughness that you showed in athletics or

00:31:01 Speaker_02
doing what other people might consider risky by trying to create your own category in many different worlds, or having that second conversation with your dad. I think there's a quote that really exemplifies you.

00:31:13 Speaker_02
And it's actually a quote that you gave me in the book. And it was in answering the question, if you could have a giant billboard anywhere with anything on it, what would it say and why? And it begins with God will not.

00:31:25 Speaker_02
Could you give us that quote, please, and explain its importance?

00:31:28 Speaker_00
Oh, man. God will not have his work made manifest by cowards. Ralph Waldo Emerson. It's my favorite quote. I literally have it on my dressing room, put on the wall in giant letters because fear begets more fear. but courage just begets more courage.

00:31:54 Speaker_00
And like you don't even get to be born unless your mother has the courage to have you. Any great thing, any, just from literally creating a business to making art, it takes this courage. It takes this willingness to be looked at, to be judged.

00:32:17 Speaker_00
You have to face down your fears and you have to step outside and go. And it helped me to just lay out what I was afraid of, because that's the big thing. You know, you have to ask yourself, What are you scared of? And then you have to attack.

00:32:37 Speaker_00
You literally have to lay out. I remember, now you tell about your swimming experience. I was always, you know, when you grow up in the ghetto, they kick you into the pool and these are not good experiences, okay?

00:32:50 Speaker_00
And so, you know, we didn't grow up on a nice pool and the beach and the whole thing. It was like the hood and it's like, oh man, it's not good. So my first experience was horrifying. I almost drowned. And so then one of my fears was swimming.

00:33:03 Speaker_00
And I remember when I had a house with a pool and I remember going in the backyard and just diving into the deep end over and over again to get rid of the fear. And it's weird because you get near the edge and you go, oh man, here I am.

00:33:19 Speaker_00
But I have to beat it. And so I was just jumping and just keep jumping in and keep jumping in until you're not afraid anymore. Because remember, it's a confidence game.

00:33:31 Speaker_00
And that quote, just when you think about anything that's made and anything that's created, anything that you see that you admire, takes so much courage because people are going to judge it. And people are going to say, ah, that sucks.

00:33:49 Speaker_00
You know, especially in the age of the internet, hoo-wee. You know, everybody's coming in and chipping in with whatever they have to say. And you have to be willing and you have to be vulnerable.

00:34:01 Speaker_00
This is why vulnerability is actually strength, because the vulnerability is part of courage. You have to be willing to let people judge your stuff, willing to let people hear your song, willing to let people hear you sing.

00:34:15 Speaker_00
And it's so wild because I'll never forget, I only got a story for that, is that the first time I ever got a movie, it was a big movie, it was with Arnold Schwarzenegger, it was called The Sixth Day.

00:34:28 Speaker_00
And I'll never forget, I'm like, I thought it was gonna be like a quick roll. It turned out to be a big job that worked six months in Vancouver. And I'm like, oh my God. And the first day I was on set, I had to say this line, Adam Gibson, come with us.

00:34:42 Speaker_00
You know, please come with us. And I remember they said, action. And I walked up on Arnold, and I was like, Adam Gibson, we need you to come with us. And he turned and looked at me. And I was like, ah. Damn it, that's Arnold Schwarzenegger.

00:35:01 Speaker_00
And wait, and I mean lightning fast. Everything went through my head like, you don't deserve to be here. You're just a dumb football player. You are a farce. These people are going to figure you out. You are fake. You're a phony. You fooled everybody.

00:35:17 Speaker_00
It's a wrap. They're going to find out and they're going to kick you out of here. And that's lightning fast. And then something was wrong with the camera. They were like, oh, you know what?

00:35:26 Speaker_00
We got a problem with the lights and we got to give us five minutes. And this was all split second. And I remember because I froze and I know I froze. And I remember I just went to the side and I was like, Terry, you survived the NFL.

00:35:42 Speaker_00
And after I left the NFL, I was sweeping floors. I was doing security. And then I went to acting. And I said, do you want to go back to sweeping floors? Do you want to go back to security? He said, man, go in there and say these lines, man.

00:35:55 Speaker_00
And I literally was cussing myself out. I was like, yo, get some guts, dude. And I walked back in there, and they were like, action. I was like, Adam Gibson, you know? And Arnold was like, this guy, I like his energy. He's got a lot of, it's amazing.

00:36:11 Speaker_00
I like him. It's really, and let me tell you, after that, I learned go in, rush in, rush in. There's never been a time, I've been acting for fricking almost 20 years, and there's never been a time those, and that's why I want to demystify this thing.

00:36:25 Speaker_00
There's never been a time that I don't have those bubbles right before action. Never, ever. It's always there. Don't let anybody trick you and act like, oh man, I'm good. If they that good, they don't care.

00:36:38 Speaker_00
I'm trying to tell you, if you care, you're going to always be nervous. You're going to always have to face it. But when you walk in, it turns into a mirage. And it just starts to disappear. I remember on a set of White Chicks, it disappeared.

00:36:56 Speaker_00
I remember I was rolling and I remember Keenan Ivory Wayans, I was like, you got any notes, Keenan? He was like, man, do what you do, man. And I remember just flowing.

00:37:05 Speaker_00
And let me tell you, you know, people who know, and I had a lot of people here who understand it, if you've ever been in a flow, It's amazing. Like there's a time when all the writing just comes, the lines just come, the job is smooth.

00:37:18 Speaker_00
You're like, man, I could do this all day. That's by practicing facing that fear, fear, fear, just going in, going in, going in till you hit that zone. Man, it's a high like you will never, ever, ever experience.

00:37:32 Speaker_00
I encourage everyone, and I'm not here, I'm here to demystify it. You will be nervous. Always. But go anyway. It's beautiful.

00:37:42 Speaker_02
Terry Crews. All right. Just a quick thanks to one of our sponsors and we'll be right back to the show. So if you're on a low-carb diet or fasting, electrolytes play a key role in relieving hunger, cramps, headaches, tiredness, and dizziness.

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00:39:17 Speaker_01
And now, Richard Koch, renowned investor and best-selling author of books on business and personal success, including The 80-20 Principle, and his most recent book, Unreasonable Success and How to Achieve It.

00:39:33 Speaker_01
You can find Richard on Twitter, at RichardKoch8020.

00:39:40 Speaker_02
Richard, welcome to the show. I'm so thrilled to have you. It is, in some respects, decades overdue, and we were just chatting before clicking record. Could you please get us started with wines and spirits?

00:39:55 Speaker_04
It's a great pleasure to be talking to you, Tim. Thank you very much for all your generosity in giving me quotes to put on books and things like that. That's very much appreciated.

00:40:05 Speaker_04
I'm not sure that this is a great place to start, but I was just thinking that you had reinvented the talk show.

00:40:11 Speaker_04
And when I was 17, and I had the first job in Windsor, England, as a van driver for a firm of wines and spirit merchants, they were called Lovey Bonds.

00:40:23 Speaker_04
And they were probably about the most old fashioned wine and spirit retailer you could possibly imagine. And one of the things which they did was deliver wine and spirits to quite a distinguished bunch of people, actually.

00:40:36 Speaker_04
I used to drive into Windsor Castle and give the brigadier his gin and so on and so forth. But one of the other people that I used to visit was Michael Parkinson.

00:40:45 Speaker_04
And Michael Parkinson, as you know, was a very successful sports writer and broadcaster who then branched out into doing chat shows. And some of the stuff which he did was marvelous. I saw a clip the other day

00:40:57 Speaker_04
of him talking to David Bowie and it was fantastic they were really enjoying themselves and they were moving very smartly from point to point and that made me think about you because I think you've reinvented the chat show on podcasts and it's just amazing so anyway that's my non-story to start with

00:41:16 Speaker_02
Well, give me time to disappoint and I appreciate the kind words and I should also say for people listening, those people who perhaps have read the various policies on my website will note or received one in my auto response via email will know that I say I don't give quotes for books.

00:41:34 Speaker_02
I don't do forwards. I don't do and I have a very long list of do not do's. The reason that I've made an exception is that, and if anyone else fits this bill, feel free to reach out because I know it's going to be approximately zero.

00:41:49 Speaker_02
If you've written a book like several of your books that have traveled with me for more than 10 years from place to place that sit on my shelves face out as a reminder, feel free to reach out. But that is going to be a very small number indeed.

00:42:05 Speaker_02
And perhaps we could start this isn't exactly the beginning, so to speak, but with the Bodleian Library. And if you could explain what that is and take us into context from there, I think that would be helpful.

00:42:20 Speaker_04
The Bodleian Library is a fantastically beautiful building in Oxford, very close to the college that I was at. And I used to sit in there in the stacks and look out of the window whenever I could.

00:42:34 Speaker_04
But the great thing about it was that it had almost any book that you could possibly imagine.

00:42:38 Speaker_04
And one day, I decided that I wanted to read a book which I had read about called The Course of Economic Theory, but it was in French, written by our old friend Vilfredo Pareto. And it was published in Lausanne in, I think, 1896 and 97.

00:42:52 Speaker_04
And I have no idea at all, Tim, why

00:43:01 Speaker_04
I wanted to read this book because it wasn't part of my coursework or anything like that but that was a book in which I discovered the 80-20 principle and he didn't call it the 80-20 principle as you know but nevertheless he had all these algebraic equations which showed the wealth distribution

00:43:20 Speaker_04
in England in the 17th century, 18th century, 19th century, and also in Italy, France, Switzerland, other countries over those periods of time. And what he found was that there was the same pattern of distribution of wealth against the population.

00:43:37 Speaker_04
And a remarkably similar chart could be drawn from the algebra for any of those countries or any time. in order to show what proportion of wealth was owned.

00:43:49 Speaker_04
And of course, it was a very small number of people or proportion of people who actually owned most of the wealth or earned most of the money. So you might say, well, that's very arcane, and it's not particularly interesting.

00:44:01 Speaker_04
But I instantly thought, I can use this. I can use this to cheat in my examinations without actually cheating. And so what I did was to say, well,

00:44:14 Speaker_04
I do know that I'm going to have to write eleven papers, three hours long each, at the end of my time in Oxford. The Oxford degree is entirely determined by the final examinations.

00:44:28 Speaker_04
There's no assessment current or there are no previous examinations at all. So it's a very, very important thing. But I had noted that on sample papers, there was something like 50 questions or whatever.

00:44:42 Speaker_04
And it's impossible to imagine that I could actually research or do work on 50 questions times 11. So I thought, well, maybe if this 80-20 principle applies, there will be some questions which are asked much more frequently.

00:44:58 Speaker_04
And lo and behold, I got the papers for the history exams for the last 20 years. And it was absolutely true. There was always a question about the French Revolution. There was usually a question about the Russian Revolution.

00:45:11 Speaker_04
There was always a question about the origins of the causes of the First World War, and so on and so forth. So I said to myself, well, you know, I don't need to study very extensively. You could write the answers to three or four questions.

00:45:25 Speaker_04
It was your choice during three hours. So what I said was, I will research six subjects. No more for each paper. And I will be word perfect. I will have very obscure quotes. I will use foreign languages that I don't actually understand.

00:45:45 Speaker_04
Absolutely word perfect. And if I do that, I don't have to do much work. And I will get a top degree. And lo and behold, that is exactly what happened. And then I thought to myself afterwards, gosh, this man Pareto was quite onto something, wasn't he?

00:46:01 Speaker_04
So that was my introduction to the 80-20 principle. Perhaps I'll never look back in some senses.

00:46:06 Speaker_02
You know what is, well, to me, so funny about that in part is that I did something very similar. I just was not aware of Pareto at this point. But when I was doing my undergrad,

00:46:20 Speaker_02
I, about halfway through, began asking teachers to give them some degree of plausible deniability because I was hesitant to ask outright what is going to be on the exam because they're not supposed to answer such a question.

00:46:33 Speaker_02
But I would ask teachers, or I would say rather, I know I need to study everything that we've covered for the exam, but if there are any particular areas you think I should focus on, would you mind telling me? And they were very forthcoming.

00:46:46 Speaker_02
So it ended up having a very similar effect, although I definitely was pleased that in most cases, not everything hinged on final exams.

00:46:55 Speaker_02
I think I probably would have been crushed under the psychological intimidation of that type of sink or swim setup.

00:47:02 Speaker_04
Yeah, I was quite nervous in my exams, but I found a solution to that, at least in the afternoons, was that after the morning paper, I would go down the pub and have a couple of pints of beer. And I found that calm my nerves.

00:47:17 Speaker_04
And it was notable that I got better results in the afternoon than I did in the morning.

00:47:25 Speaker_02
Well, that could be in one of your next books if you haven't covered academic hygiene and preparation. If we're looking at formative periods, let's just say high school, college, university, however we want to label it, I'm looking at notes

00:47:44 Speaker_02
as I do in these types of conversations from an interview you did with Boing Boing a long time ago, an outlet that I know very well. And one of the questions posed was, what advice would you give to a smart kid who's now in high school?

00:47:56 Speaker_02
And you can feel free to fact check this and correct, but the answer I'm just going to read Briefly, and then I have a follow-up.

00:48:01 Speaker_02
Discover what you are best at doing and enjoy that is different from what all of your peers are doing and that requires relatively little effort from you.

00:48:09 Speaker_02
Then put huge effort into honing that skill so that it becomes monstrously greater than anyone else's. Keep demanding that each year you make your peculiar talent more peculiar and much more potent.

00:48:20 Speaker_02
Use this skill to make the world a more interesting place. Don't care about making money. If you have a fantastically different and useful skill, everything else you want will follow. So I have two questions. Accurate or not accurate, quote.

00:48:32 Speaker_02
Secondly, what is your peculiar talent and how did you discover it?

00:48:37 Speaker_04
Well, it's totally accurate and it's very easy to give advice and perhaps less easy to originate the advice or at least to exemplify the advice.

00:48:45 Speaker_04
I was always very, very interested in history because it enabled me to develop a certain skill in analysis with non-quantitative analysis. I'm absolutely hopeless at numbers.

00:48:58 Speaker_04
But in terms of understanding structures, in terms of understanding trends, in terms of really getting to grips with what might have happened that other people had not noticed, then that's what I did.

00:49:12 Speaker_04
And, you know, I came up with some pretty wacky ideas during my time studying history. But I thought that they were plausible, and the examiners must have thought so too.

00:49:21 Speaker_04
I mean, for example, it seemed to me that Hitler had been copied pretty much what Lenin and Stalin had done. So of course, Hitler was a great anti-communist, and they were great anti-Nazis. But

00:49:33 Speaker_04
He actually had followed Lenin's policy, for example, of a one-party state, which no one before Lenin had really done, and of death camps for dissidents and enemies of the regime.

00:49:46 Speaker_04
Again, no one had really done that, certainly not on such a ruthless scale. as Lenin and later Stalin did. So it was my theory that Hitler had based his policy on the Bolsheviks. And that's just a little example.

00:50:01 Speaker_04
I'm not absolutely sure that's true, but it's plausible. And it's sort of trying to winkle out things that might be true, which are interesting and important, but which no one else has spotted. That's what I try and do. That's what I enjoy doing.

00:50:16 Speaker_02
So you mentioned hopeless with numbers. Now, or maybe I injected the hopeless, but you were very self-deprecating with respect to numbers and numeracy. And yet,

00:50:28 Speaker_02
people would look at your track record of investing as an example and ask, how can that possibly be the case? So again, in my notes, I have Betfair here, which I would love for you to explain, but it adds that you couldn't use their website.

00:50:45 Speaker_02
Now, please explain.

00:50:49 Speaker_04
Okay, well, the way of reconciling those two apparently different things, I do have a very good track record, thank God. I've been very lucky, or very fortunate, at least, in my investments.

00:51:02 Speaker_04
But it's not based on being an analyst in the conventional sense.

00:51:06 Speaker_04
I got fired from the Boston Consulting Group because I was no good at doing financial and market analysis, despite the fact that I was quite good at doing some other things which they didn't value very much.

00:51:16 Speaker_04
It is true that I'm not particularly numerate. But I believe that's a skill which is, you know, readily available from other people.

00:51:25 Speaker_04
And as far as Betfair is concerned, I base my investment, as indeed all my investments are based, on the STAR principle, which was something that the Boston Consulting Group themselves had invented way back in the 1960s.

00:51:39 Speaker_04
And this is the old chart of the dogs, stars, question marks, and cash cows. I never make an investment unless the business is a star business or has the potential to be a star business.

00:51:52 Speaker_04
And BCG's definition, my definition of a star business, is the market leader in a niche, a defensible niche, where you can protect it against other people, other competitors, and a high market growth rate. BCG said more than 10%.

00:52:07 Speaker_04
I've really tried to aim at more than 30%. And the thing about Betfair was that a friend of mine in 2001 came along and said, we've started this betting company, and I'm a gambler. I like gambling.

00:52:23 Speaker_04
And we think it's completely different from anything else because it's not a bookmaker. And I said, well, what do you mean?

00:52:29 Speaker_04
And he said, well, a bookmaker is someone who makes a book and basically offers odds to punters, gamblers who might want to bet on it.

00:52:40 Speaker_04
Betfair doesn't do that what it does is it started an electronic market which enables people to either act as a bookmaker or to act as a punter so you can go on to the site and you can see posted up there the odds other people will give and the odds for the punters are vastly better because there's no bookmakers profit.

00:53:05 Speaker_04
Now I said it can't be true because Betfair has to make some money. How do they make money? What's their business model? He said, well, they have a very small commission, which they take, and they only take that on winning bets.

00:53:16 Speaker_04
So I said, well, that sounds like a fantastic idea. So what's the problem? And he said, well, do you want the real truth? And so I said, yeah, of course, I want Anthony, of course, I want the real truth. What's the problem? He said, well,

00:53:29 Speaker_04
No venture capitalist no professional financial firm would invest in this company when they first had their round they started about six months previous to this.

00:53:40 Speaker_04
And he said then there was, from their point of view, a very good reason for that, which was none of the managers in the business had any experience. I said, oh, you mean they didn't have experience in the industry?

00:53:51 Speaker_04
He said, no, no, they don't have experience in the industry. Well, one of them used to be a professional gambler, but that's not experience which venture capitalists would recognize as being applicable. He said, no, they never run anything.

00:54:07 Speaker_04
And I said to me, so answer, you're telling me that I should put money into a business that has people running it. They've never run anything else.

00:54:15 Speaker_04
He said, well, one of them used to be a financial debt person at Morgan Stanley, and he was making, you know, he was trading loans and doing that sort of stuff.

00:54:26 Speaker_04
And he said, you know, trading loans is not a million miles away from running a betting exchange.

00:54:30 Speaker_04
But the truth was that they really were all sports enthusiasts, all gambling enthusiasts, and none of them had had any experience in management, which explained why it was only friends and family who'd been able to invest in, or been willing to invest in this particular company.

00:54:48 Speaker_04
So I said to Anthony, well, what's the attraction? He said, it's a star business, Richard. And Anthony had worked for me in L.E.K. and also in a company we set up after L.E.K. called Strategy Ventures.

00:54:59 Speaker_04
And so he knew that I knew that the way to make money in investing in small businesses was to actually invest in something which could be or was a star business. Well, even though it was tiny and even though it was losing money,

00:55:14 Speaker_04
It was clear that Betfair was indeed a star business. And why was it clear? Because no one else was doing what they were doing.

00:55:21 Speaker_04
Their business model was completely different, their cost structure was completely different, their customers were completely different.

00:55:27 Speaker_04
All of their customers were sophisticated and quite large, not all of them, but most of them were sophisticated and quite large gamblers. And so they didn't compete with Ladbrokes or Corals, the Toads, the other British bookmakers.

00:55:41 Speaker_04
And in fact, they didn't compete with anybody because there was nobody. There was actually another firm set up originally in San Francisco called Flutter. It had a slightly different business model. So it had no competition.

00:55:52 Speaker_04
It had infinite relative market share. So I said, Well, that's fantastic. So he said, Well, let me give you the website, you can go on and see how it works. Well, unfortunately, I couldn't because I didn't know how to work the website.

00:56:08 Speaker_04
And I went along and talked to the people and just tried to make sure that it was indeed a star business. And that I thought that, you know, it could actually get some professional management later on. And so after an hour, I decided to invest

00:56:26 Speaker_04
1.5 million pounds in that business. And they were quite shocked by that. They said, well, are you sure?

00:56:33 Speaker_04
And I explained to them what a star business was and how it was wonderful and how they should be very pleased to be having a star business and all the rest of it. But they were quite taken aback at that.

00:56:43 Speaker_04
And they had been trying to raise money again from institutions that all said no. And the mates that they had who put the money in originally,

00:56:52 Speaker_04
you know, didn't want to put more money in, particularly as he used that money much more quickly than expected. The reason that he used the money much more quickly than expected was that the growth was fantastic.

00:57:01 Speaker_04
It was a tiny, tiny, tiny business, but it was growing at 40%, 50%, even 60% a month. And I said, well, the other thing which I believe in, apart from the star principle, is compound growth rate.

00:57:13 Speaker_04
And so I looked at their financial projections, and I thought they were incredibly conservative, considering the market growth rate.

00:57:20 Speaker_04
And so I invested and I went on to the board and about four years later, the chaps had an away day at which I said how wonderful star businesses were and so on and so forth.

00:57:33 Speaker_04
And then I said, and actually last week, I decided it was time that I actually learned how to use the website that you have. And they all fell about laughing. They thought I was joking. And I said, no, I did. I think it's great, great website.

00:57:48 Speaker_04
And they said to me, well, How could you possibly have invested in the business without sort of going on to the website? And I said, well, it's a star business.

00:57:56 Speaker_04
And they said, I think I went down in their estimation quite considerably as a result of that. And of course, now I use the website most days. I think it's a wonderful website. I've sold my shares. I'm not advertising the company or anything like that.

00:58:12 Speaker_04
But I ended up making about 100 million pounds profit out of that investment. So that's the power of the star principle. So how can someone who's not numerate make money out of what is generally a highly numerate industry?

00:58:25 Speaker_04
Well, the answer to him is very simple. I believe in principles and I believe in the star principle. And it works. I'm the only investor in the world that does this.

00:58:35 Speaker_04
And I think I'm the only investor in the world of my scale that doesn't employ anyone and that does it on the basis of probably about a day a week of work. I do use my personal assistants to do some of the work.

00:58:47 Speaker_04
I do use contacts for special, particular jobs. But I don't have any staff. And when I tell people this, they say, well, your portfolio is X. That's absolutely unbelievable. I said, well, I've only got one question when I invest in a business.

00:59:03 Speaker_04
Is it a star business, or could it be a star business? And once I've invested, I want to retain it as a star business or make it more dominant. And the only question is, how do you do that? And so life is very simple.

00:59:18 Speaker_02
I'm laughing because we could have five hours and I'm going to run out of time before I run out of questions. So let's bookmark a few things. We're going to come back to knowledge versus principles. Okay, so we'll bookmark that.

00:59:28 Speaker_02
I want to just make it clear, at least from Wikipedia, and Wikipedia, of course, is subject to debate, but often inaccurate.

00:59:37 Speaker_02
And Betfair is described as the world's largest online betting exchange, just for those who are looking for some type of perspective and are not familiar with the company. And you had mentioned gambling and liking gambling.

00:59:51 Speaker_02
I want to dig into that because it strikes me that you may enjoy gambling, but you're also very good at placing bets. And those are not necessarily the same thing if we think about the psychological dynamics, drivers, and criteria involved.

01:00:07 Speaker_02
And I want to explain also to people listening that investing is a wonderful metaphor and framework for exploring principles that apply elsewhere, thinking processes that apply elsewhere or perhaps even everywhere.

01:00:23 Speaker_02
So my question for you is very specific. 1.5 million. How did you decide on that bet sizing?

01:00:31 Speaker_04
That was all the money I had. Holy shit, wow, okay, so you just pushed in all your chips? Yeah, all my liquid assets, you know, and this is quite typical for me. I want to be full in cash.

01:00:44 Speaker_04
Something we'll talk about later, which is one of the things which is quite absurd about me, is that I actually don't have very much money to spend, and I don't really mind that.

01:00:53 Speaker_04
I tend to, when I'm in London, for example, in normal circumstances, I would take public transport, I would go on the bus or the tube,

01:01:00 Speaker_04
I would cycle if I possibly could, but I wouldn't take a taxi or even an Uber unless it was absolutely, you know, I was desperately short of time. And I don't believe in being desperately short of time.

01:01:11 Speaker_04
I always make sure I have plenty of time because I don't want to be rushed and because I can always use the time to think or whatever. So how do I decide on the bet size? You know, it's just a matter of what I have available if I think it's a good bet.

01:01:25 Speaker_04
I hasten to add, I don't make money out of my horse racing gambling. That is purely an entertainment, and I don't place particularly large bets relative to my net worth either.

01:01:36 Speaker_04
If I can go for 18 months without having to put any more money in my account, I'm very happy. It's a different kind of bet.

01:01:43 Speaker_04
I mean, gambling, conventional gambling, whether it's poker, or it's at the casino, or it's horse racing, or it's betting on tennis, or baseball, or football, anything like that.

01:01:54 Speaker_04
I think there are people who make money at it, but they usually either have some inside information or they are incredibly skilled at judging probabilities and they often have, you know, even research.

01:02:05 Speaker_04
I know someone who had 50 employees tracking football in order to see whether the odds on particular football matches were right or not and he would take positions and he made a lot of money out of that consistently every year.

01:02:19 Speaker_04
But, you know, someone like me who doesn't know a lot about football, knows nothing about football, doesn't know a great deal about horse racing, is at a certain disadvantage.

01:02:27 Speaker_04
I just, I have a particular method which I use which is based on looking not where the horse came in the race, but on the time relative to other times. And all that is calculated on the Racing Post website.

01:02:40 Speaker_04
it's called something called top speed and whenever i make a lot of money in horse racing it's because top speed has shown me a horse which is not far away from the favorite but might be at odds of 30 to 1 or in one case it was even 330 to 1 that's unusual but betting on companies is fantastic

01:03:01 Speaker_04
Because if you understand how important relative market share is, and if you understand whether or not a company is able to segment itself and therefore have a defensible position in a particular segment like Betfair, then it's absolutely fantastic.

01:03:16 Speaker_04
Because you can basically invest and know that you might lose your money, but overall you're going to do very well out of that. Yeah, I have very rarely lost money on star businesses.

01:03:30 Speaker_04
The cases where I've lost money is where I thought something might become a star business and it wasn't. Does that answer your question?

01:03:37 Speaker_02
It does, and I have a whole handful more to follow up. You wrote an entire book on this, The Star Principle 2008, that was published in 2008, Work and Investing in Star Businesses, that was the focus.

01:03:50 Speaker_02
When you say segment itself, businesses that can segment itself, and you mentioned Betfair, what does segmenting itself mean?

01:04:00 Speaker_04
It means that it defines the market in a way that nobody else has done, or that very few people do, and therefore that it's possible to become a market leader in it. So Betfair's a very good example of that.

01:04:14 Speaker_04
It's a betting exchange, which is an electronic market where people can post bets on either side, buy or sell. It doesn't take principal positions, as bookmakers do. So once its overheads are covered, it can't lose money.

01:04:30 Speaker_04
And it competes against other betting exchanges, not against the big bookmakers, because anyone who's a big gambler isn't going to go to Ladbrokes or Corals or the Tote or Paddy Power or any of those conventional bookmakers because they know that the bookmaker typically takes out about 10% on each event.

01:04:51 Speaker_04
And Betfair takes out maybe 2% but that's only half the time if you win half the time and lose half the time.

01:04:58 Speaker_04
So it's 1% plays 10% and therefore it means that the customer profile is completely different and the way that the cost structure operates is completely different.

01:05:09 Speaker_04
So it's a separate business segment because it's not competing with conventional betting firms. So it means that the company has to do something differently.

01:05:20 Speaker_04
It either has to have a price advantage and therefore a cost advantage in the way that Betfair does, or it has to offer something which is so attractive that people will pay Even if it's the same price, they will actually go there.

01:05:37 Speaker_04
So the three things that you want to do if you want to, what I call proposition simplify, are you have to have something which is very useful, you have to have something which is easy to use, and preferably you want something which is aesthetically pleasing, which gratifies you as a joy to use.

01:05:54 Speaker_04
And if you think about any of the Apple devices, then they created their own segments with the iPod and the iPad,

01:06:01 Speaker_04
and the iphone and other devices because it was different from conventional competition even the mac really didn't compete head to head with ibm and anything where you can get a big price premium for example thirty percent plus.

01:06:17 Speaker_04
as Apple's been able to do on all of its devices, at least at the start, you have something which is a separate segment, because it's not competing against the low-cost competitor.

01:06:29 Speaker_04
And if you are going to be a low-cost competitor, you want to be low-cost in a segment which is different from the other segments, because otherwise, the existing large companies will eat you for breakfast.

01:06:40 Speaker_02
You are unconventional in many different respects. I'd like to ask you a personal question. You can feel free to decline to answer this question, but I'm very curious as to what your investment portfolio looks like.

01:06:57 Speaker_02
What principles govern its composition? Because you had mentioned that you're quite happy to have small amounts of liquid assets, cash available. What does your portfolio look like to the extent that you're comfortable discussing it?

01:07:12 Speaker_02
What are the principles that govern its composition?

01:07:15 Speaker_04
Well, it's pretty much an illustration of the 80-20 principle, but more so. I suppose my most valuable single, I've got about 40 assets, companies in which I've invested.

01:07:27 Speaker_04
And the most valuable company in the portfolio constitutes about half the total value. And another one constitutes about a quarter of the total value.

01:07:37 Speaker_04
And so in a way that also simplifies my life because if i take care of those two particular assets and know that they're going to do well or think they're going to do well then i can be relatively relaxed i'm quite happy to increase my share

01:07:53 Speaker_04
in companies once I know, or think I know, and I'm not infallible, that they are going to be successful.

01:08:00 Speaker_04
So for example, the company that is my largest single investment, I started off with a relatively modest investment that might have had about 2% of the company, and I'm now up to 60% of the company.

01:08:13 Speaker_04
And basically what I'm doing is buying my shares from the existing shareholders whenever there is an opportunity to make an offer for shares, which is when I've got some money. So that's the principle. I don't have any rules on industry.

01:08:28 Speaker_04
I don't care what industry it's in. I don't really care very much what the management is like because if the management doesn't perform, management will eventually get replaced. I don't really care where it is as long as it's not

01:08:41 Speaker_04
Well, as long as it's in Europe, because I think I understand European markets, I won't invest in the US because competition is too great, and also because I don't like the IRS, and also I don't know anything about American investment.

01:08:55 Speaker_04
So it's basically a European portfolio, industry irrelevant, and I don't care about concentration. In fact, I rather like concentration.

01:09:07 Speaker_02
Let's go back to getting fired. Just to warm up the conversation. So what happened after you were fired? And could you actually tell us more about the day that you were fired? What was the conversation? What was that experience like?

01:09:24 Speaker_02
And then what happened after you were fired?

01:09:26 Speaker_04
Well, it was a slow firing. And in fact, it was a very gentle firing BCG like McKinsey, McKinsey invented the phrase up or out. And McKinsey, they would say that after three years, you would be assessed.

01:09:40 Speaker_04
And if you were really good at their business, you would get promoted. And if you weren't, you'd be asked to leave, but they will do it in a very, very nice way. Because they were sort of dividing the sheep and the goats.

01:09:52 Speaker_04
The sheep were the people who were good enough for McKinsey, and the goats were people who were good enough to be McKinsey clients. So that was their philosophy, and they were terribly nice to the people. But in fact, it was kind of like,

01:10:05 Speaker_04
It was a form of, I don't know, it was a form of sort of psychological one-upmanship, because the people who left generally weren't as bright as the other people.

01:10:16 Speaker_04
It wasn't that they could do things that the McKinsey people couldn't do, it was that they weren't as bright in terms of the

01:10:23 Speaker_04
strategy of the business and analysis and so on and so forth so that works extremely well busy g did not have quite as rigid a formula as mckinsey but they did have this policy but if after three or four years you have not been made from a consultant into a manager consultant was a typical entry level for someone who's been to business school

01:10:45 Speaker_04
you'd be pretty much an anomaly, would be the way that they would probably put it. And therefore, you might start thinking about what you wanted to do. And so I had a number of those conversations with people. But I said to him, look,

01:11:00 Speaker_04
You're dead wrong. This was me. This is me in my arrogant youth. And maybe I haven't got rid of the arrogance altogether. I said, look, I'm no good at analysis, but I can charm the clients. I can talk to the clients.

01:11:13 Speaker_04
I'm quite articulate and I can understand what the issues are.

01:11:18 Speaker_04
The strategic issues and i can relate those to the client so i might not be very good at being a consultant i might not even be very good at being a manager but why don't you make me a vice president because i can actually do rather well.

01:11:31 Speaker_04
And they would chortle. They would say, Richard, you know, we have to have a hierarchy. And I said, well, you know, X, Adrian, for example, Adrian's now a vice president.

01:11:41 Speaker_04
We all know that he was a pretty good consultant, but he wasn't a terribly good manager because he couldn't command the analysis. And that's the heart of, you know, what BCG does. So he had to rely on other people to do it.

01:11:54 Speaker_04
But now he's a vice president. He's selling a lot of business very successfully and helping clients. So I'm like Adrian, basically. And they would, again, chortle a bit.

01:12:05 Speaker_04
But eventually, a very nice guy called Phil Hume, who's later started Computer Center and made quite a lot of money out of Computer Center, sat me down and said, Richard, you know, you are running out of road a bit.

01:12:18 Speaker_04
And I said, well, look, I've got a fantastic

01:12:20 Speaker_04
assessment from roy bobby the other day you know he said how much the clients let me said yes rich we know that but basically you can't do what is really our parallel so you maybe you sort of think about looking around and i came out from that meeting thinking is he right

01:12:38 Speaker_04
Is he right about this, or am I right? And I thought to myself, well, maybe he's right.

01:12:43 Speaker_04
So I actually then very quickly went to other consulting firms, to McKinsey and to Bain and Company, to see whether... May I say something, Richard, just for a second?

01:12:54 Speaker_02
That is, for people who don't have any context on management consulting, when you say McKinsey, when you talk about Boston Consulting Group, when you talk about Bain & Company, just as a point of reference for folks who may not be familiar with this industry, when I was studying at Princeton, there were exactly two industries that recruited heavily.

01:13:12 Speaker_02
You had the investment banks, you had Goldman Sachs, and a handful like that, and then you had what were considered the elite of the elite of management consulting, and that included McKinsey,

01:13:24 Speaker_02
BCG, in other words, Boston Consulting Group, Bain & Company, and so on. So these are the most prestigious names in the world of management or strategy consulting. I just wanted to add that as a bit of background. Yeah, I'm sorry.

01:13:37 Speaker_04
I assume everyone knows, and they don't. I mean, it's a very... When I was doing it, it was a very obscure industry. And now it's less obscure, but it's still pretty obscure.

01:13:47 Speaker_04
Anyway, I went to McKinsey, they said, no, you're a bright guy, but we don't think you should be doing this management consulting stuff because you want to make decisions rather than advise. And I said, yeah, that's probably true.

01:14:01 Speaker_04
Bain & Company, I'll come back to in a second. I then said, well, maybe I should be a headhunter. And I was actually approached by firm headhunters, some of whom knew me personally. And so I went off to see Egon Zender in Zurich.

01:14:13 Speaker_04
with a view to becoming, and Egon Zender was the leading at that time, probably still is, the leading European headhunter. Just a footnote there for people, headhunting means recruiting, right?

01:14:25 Speaker_04
At a very high level and taking very large amounts of money from the client. So anyway, I talked to Egon Zender, and he offered me a job on the spot, and I very nearly accepted on the spot.

01:14:37 Speaker_04
But when I sort of examined my heart, I came back to the conclusion that I thought BCG was wrong. And I might not suit BCG, but I thought, you know, maybe I can get a job in another consulting firm.

01:14:49 Speaker_04
There happened to be another individual who had left the Boston Consulting Group and joined Bain & Company, a guy who rejoiced in the name of Floyd Bradley III. You might tell he was an American, very, very nice guy, quite a smart guy.

01:15:04 Speaker_04
Anyway, so I arranged to have a drink with him and said, I'm not too happy with BCG. I don't think they're moving me on fast enough. How about Bain & Company? Do you think that they would be interested?

01:15:14 Speaker_04
He said, yes, they're always looking for people that find it quite difficult to recruit people at this stage. And so I said, fine, I'll go along and talk to them.

01:15:22 Speaker_04
So I went along and talked to the head of the London office, and he said, we'll send you off to Boston. Now this was very interesting for me. It was my one chance, basically, to stay in the industry that I wanted to stay in.

01:15:34 Speaker_04
The only problem with Bain & Company was that it had a reputation for being an extremely hierarchical, strict, controlled, almost mystical outfit, where you had to do what you were told.

01:15:47 Speaker_04
Whereas BCG actually was a pretty freewheeling, entrepreneurial sort of firm. reflecting the difference in character between the guy who started BCG, Bruce Henderson, and the guy who runs, or ran rather, Bain & Company.

01:16:01 Speaker_04
I should say that he's dead now, so I can't be sued for libel or slander or whatever it is, and neither can you. Although I have the utmost respect for Bill Bain, as I'll come on and say it in a second. So they sent me off to Boston.

01:16:14 Speaker_04
So there I was, I had a four o'clock appointment to see Bill Bain. In the afternoons, I got off the plane, got a cab to their Boston office, turned up at the desk and said, I'm here to see Mr. Bain at four o'clock.

01:16:30 Speaker_04
And the woman sort of looked a bit confused.

01:16:34 Speaker_04
And basically what had happened was that someone in the London office had not told the Boston people, although they'd given me a ticket to go and see him, given me an appointment time, apparently it had not somehow not got into the agenda of Mr. Bain.

01:16:49 Speaker_04
So they said come back the following morning. So I went back the following morning and there I was. I went through the offices. The offices were quite remarkable.

01:16:57 Speaker_04
They were beautiful offices but the associates, the consultants and the researchers were all hunched together. It was not quite a sweatshop. It was a very nice sweatshop but you could see that they were

01:17:09 Speaker_04
either expanding very fast or very tight on the rental cost. And then I went into Bill Bain's office and it was palatial. You know, it was stuffed full of basketball and baseball trophies and insignia and paraphernalia of all sorts.

01:17:25 Speaker_04
And he was sitting behind this large desk

01:17:28 Speaker_04
and got up very graciously to meet me and said do you want anything to drink I said no I don't want anything thank you and then he started talking to me well it was very fortunate for me because I didn't find out until afterwards but it turned out that Bill Boehm was a historian that was his undergraduate degree and in fact he had

01:17:46 Speaker_04
spent a year doing postgraduate research, which he eventually gave up because he thought it was terribly boring, and because he got offered a better job as the Development Director of Vanderbilt University. But during the course of that interview,

01:18:00 Speaker_04
Bill Baines said something, and I thought, well, I want to ask him a question, but he was in full flood. So I let him carry on talking until probably about 20 minutes afterwards.

01:18:10 Speaker_04
And then I went back to him and said, you know, if I got it right, Mr. Bain, you said earlier, such and such and such and such, and I want to ask you a question about that, blah, blah, blah. And he said, you're incredibly unusual. And I said, what?

01:18:23 Speaker_04
And he said, well,

01:18:25 Speaker_04
You're a very good listener and not many people are good listeners and I wasn't aware that I was a good listener and maybe it was just I was so desperate to get a job that actually I was actually listening but I was also very curious about the business because right at the start when I had

01:18:40 Speaker_04
joined BCG. I thought, what a wonderful industry this is. It requires no working capital and basically they charge huge fees. They don't pay people a hell of a lot of money.

01:18:51 Speaker_04
Eventually they give them bonuses, which is where the working capital comes from, the difference between the standard pay and the markup, which is some of which is eventually rebated to the professionals involved. And it's expanding very, very fast.

01:19:04 Speaker_04
And they've got this great model called the growth share matrix because it's got market growth on one axis and it's got the relative market share on the other. So they call it the growth share matrix, but it's more popularly known as the Boston box.

01:19:19 Speaker_04
And it's this thing which has cash cows, dogs, question marks, and stars.

01:19:24 Speaker_02
The one thing I just wanted to say also as an observation of friends who have come out of McKinsey is that it seems that two by two matrices are very popular for organizing thought.

01:19:34 Speaker_04
Yes, and in fact, McKinsey went one better. They developed an imitation of the Boston Box, which was a three by three matrix. But as always, economy is everything, and it wasn't as good, and it isn't as good, in my humble opinion.

01:19:49 Speaker_04
Anyway, the end of the story is that Bill was quite taken with me, and I was quite surprised. And he said, I want you to come and talk to Ralph Willard, one of the other founders of Bain & Company.

01:20:02 Speaker_04
And Ralph was a very jolly chap and we got on very well and so on and so forth. So they actually offered me a job. And then I said to them, well, Ralph said, how much do you want to be paid?

01:20:13 Speaker_04
And I said, well, I'm earning such and such at the Boston Consulting Group. But obviously, if I'm going to take a step like this, I want a 50% increase. That's ridiculous. And I said, well, you know.

01:20:25 Speaker_04
maybe you can just make me an advance for joining and not consolidate it into the salary. But you know, at that stage, I was feeling confident that they wanted me.

01:20:36 Speaker_04
So I sort of raised the stakes a little bit, despite the fact that at the beginning of the day, I was totally desperate. And if they'd offered me a job after an hour, I wouldn't have cared what they were going to pay.

01:20:46 Speaker_04
But anyway, they did eventually pay me quite a large amount of money to join. And at the same time, I then went back to BCG and said, you know, I think you're making a mistake.

01:20:57 Speaker_04
But if you want me to leave, you know, I've got all this money, which I'm due in a few months time as a bonus and rest. And please, can I have that? And to my surprise, they said, Yes, okay.

01:21:07 Speaker_04
I mean, they were so desperate to get rid of me that they agreed. So I made quite a bit of money from BCG and from Bain & Company.

01:21:15 Speaker_04
So it was quite apart from the fact that the previous two or three years have been very very miserable i read double my efforts to succeed at bcg i worked eighty hours a week i got fat in the face from eating fast food at night i basically neglected my personal relationship i stopped exercising it was a complete disaster and

01:21:35 Speaker_04
If i was to give advice to anybody who's in a similar situation or even a less desperate situation i would say if you're not succeeding in a job give up and go somewhere else where you know your talents can be better appreciated all your talents more suited to what that phone does so i just can't i just could not admit fire.

01:21:56 Speaker_04
This was the thing, you know, I just, to me, personal success was absolutely essential to my happiness. And it affected my self image and all the rest.

01:22:06 Speaker_04
And I could not believe that these very intelligent people at BCG couldn't see the things that I could do.

01:22:14 Speaker_04
And it would have been far better for me to say, well, you know, they just have a different business model, analysis, quantitative, heavy duty stuff is their bag. And, you know, it's not something I can do particularly well.

01:22:26 Speaker_04
And so please give up and stop and decide whether you want to be in the industry or decide if you do want to be in the industry, go to a competitor.

01:22:35 Speaker_04
So the long and short of that story is that it worked out extremely well in the end, but it was absolutely balls aching, very unpleasant.

01:22:46 Speaker_02
I wanted my pound of flesh at the end of all the suffering we'd gone through. What did Bain & Company appreciate about you or utilize in you that was not utilized or appreciated at ECG?

01:23:00 Speaker_04
Oh, it's very simple to answer that because I've always been interested in what I call the theology of business. And by that, I mean the business model that a particular firm has. And BCG and Bowne & Company were very, very interesting to me.

01:23:17 Speaker_04
And this goes back to your first question about what am I good at doing? I actually did analyze in my mind, not quantitatively, the business model that BCG had and the business model that Bowne & Company had.

01:23:30 Speaker_04
And they used the same concepts, they were all using, both using the gross share matrix, the Boston box, etc. Which incidentally Bill Bain had helped to originate, so it wasn't really plagiarism.

01:23:42 Speaker_04
And indeed BCG had put the stuff out there in the public domain, so it wasn't, you know, they weren't doing anything underhand. But they were using all BCG's concepts, but the firms were completely different.

01:23:53 Speaker_04
let me try and describe how they were very different bcg as i said before was a very sort of decentralized company and the Vice presidents who are in charge of particular clients were sort of almost autonomous profit centers.

01:24:10 Speaker_04
Bruce absolutely believed in the market. He was a red-toothed capitalist. You know, he really read in tooth and claw. He really believed in competition and so on and so forth. So much so that he divided his firm

01:24:27 Speaker_04
At one stage and this is quite interesting business before my time but you divide the firm into three different parts and his view was that if one of those firms had developed a slightly different way of doing things if they were successful any particular reason than the other firms could learn from that.

01:24:46 Speaker_04
And the market would clear, as he was fond of saying.

01:24:49 Speaker_04
And what happened was that he put Bill Bain, whom he had hired from Vanderbilt University, where he was a development director, and met Bill Bain because he had the begging bowl out as an alumnus of Vanderbilt, Bruce as an alumnus. And he asked Bruce,

01:25:06 Speaker_04
will you give money to vanderbilt university and bruce said no but come to boston and we'll talk about giving you a job so you know that was kind of like the back story from that point of view but bcg was very very decentralized and even each individual consultant

01:25:23 Speaker_04
or all the professionals were actually profit centers.

01:25:26 Speaker_04
They were rewarded at the end of the year, not on how well they'd done, not on their team performance, not on anything really, but their, what he called their billability, which is the number of hours that they had actually billed.

01:25:41 Speaker_04
And incidentally, I was probably one of the most billable people because I was willing to work very long hours. And because initially, at least anyway, people wanted me on their teams.

01:25:51 Speaker_04
And if they didn't want me, I could even sell my own work, so I had to be included in the people who were on that. But it was very, very decentralized.

01:25:59 Speaker_04
Bain & Company, on the other hand, was a very, very controlled, and I actually called it Stalinist later on, organization, where it radiated out from Bill. Bill did all the thinking initially,

01:26:15 Speaker_04
And then the trusted vice presidents, who included Mitt Romney, who was a great guy, a guy I've got tremendous admiration for, and four or five other vice presidents.

01:26:27 Speaker_04
And the formula in Boehner & Company was very, very tight and unforgiving, which is that they generated all of their business from a relationship with the chief executive.

01:26:41 Speaker_04
or the head of the company, sometimes the president or the chairman of the company, but usually the chief executive, or maybe they were president and chief executive. And they would not work for anybody who was not the top dog in the organization.

01:26:55 Speaker_04
So they wouldn't work for, you know, the head of Europe, or they wouldn't work for the head of manufacturing or marketing or any other function. But they had a spiel which they gave to the chief executive of the company, which was,

01:27:10 Speaker_04
Mr chief executive we want you to be very successful because of your very successful we will be very successful we've got this funny little stuff called strategy which really works and we can explain it to you but basically you should think of it as a wonderful formula a kind of like a secret source for increasing the market value of your company profits in the market value.

01:27:33 Speaker_04
And if we do the work with your company, your share price will double within the first year or so, or the first two years anyway. And it will continue doubling every few years because we have got a way of making the firm much more valuable.

01:27:48 Speaker_04
And we can describe that. But it relies upon you being willing to accept us as equal partners.

01:27:57 Speaker_04
And again, this was very, very different from the whole of the rest of the industry, which was, in a way, salesman for hire or cabs for hire, that, you know, consultants would do anything as long as they got their daily rate, and so on and so forth.

01:28:13 Speaker_04
They didn't really care too much about which firm they were working for. They would work for competitors and so forth.

01:28:19 Speaker_04
Bain & Company said we will only work for one company in an industry or later they refined that to a competitive system which was sort of slightly more sophisticated way of saying industry and therefore you know we won't work for your competitors you won't hire our competitors so therefore you'll be giving a monopoly or strategy consulting or any other form of consulting really to Bain & Company if you decided to hire them.

01:28:46 Speaker_04
And the way... It's incredibly smart. Yeah. It's very smart. And the way in which they got clients, Tim, was that they had no website, but that wasn't unusual at the time. They had no business cards. They had no marketing literature.

01:29:02 Speaker_04
And the only way, and they were very secretive, the only way in which they got business was by personal recommendation of one chief executive to another chief executive.

01:29:13 Speaker_04
And then within that firm, once the client had been signed on, you know, Guinness or Dun & Bradstreet or Baxter Travern or whoever it was, they would then have almost a military operation where within each client organization, someone from Bain & Company would be assigned to work alongside or with nominally four

01:29:39 Speaker_04
you know, the head of manufacturing or the head of a particular product area or however the firm organized itself. And they would make sure that they understood what that person was thinking.

01:29:52 Speaker_04
They would help them by gathering this very valuable information, which Bain and the company did very, very well, about competitors and customers and costs of the competitors. And they would, you know, develop a relationship.

01:30:05 Speaker_04
I couldn't believe it when I was told

01:30:07 Speaker_04
by Bain & Company when I joined, take the head of manufacturing out to dinner and discuss things with, I thought, you know, last thing I want to do is have dinner with the head of manufacturing, who is a very boring man.

01:30:21 Speaker_04
And it was all part of the job. And it was incredibly effective. Because, you know, whereas at BCG, they would go away for six months, and they'd come back and give a presentation, which was dazzling. But

01:30:34 Speaker_04
then people in the audience of the managers were free to disagree with what was recommended and often did cast doubt on the credibility of BCG as a result of that, rightly or wrongly, usually wrongly.

01:30:47 Speaker_04
In Bain & Company, everything had to be pre-wired. So all the work was specified from the top down, but it was validated from the bottom up.

01:30:56 Speaker_04
So that once you've done a piece of work, you then had to show it to the relatively low-level manager and make sure that they agreed with it. And if they disagreed, they could only disagree about data.

01:31:07 Speaker_04
They couldn't disagree about concepts, because we were the kings of concepts. We knew relative market share was important, and we could explain why. We weren't unreasonable.

01:31:16 Speaker_04
But nevertheless, when it eventually got to the chief executive, and then later to the board, it had all been pre-wired, which meant that everyone had agreed to everything.

01:31:28 Speaker_04
and therefore there was no disagreement and the only discussion which there'd be at the end of the presentation was about what Bain always used to call next steps well let me tell you what next steps were next steps were this is how we're going to make our next million dollars by consulting to you on this issue but of course it was justified because Bain & Company was a fantastic machine

01:31:51 Speaker_04
for getting consensus in organizations and getting consensus about some very radical strategies which might include getting out of half the businesses that they were in selling them or in some way hiding them off or closing them down if they were cash negative and no one would buy them.

01:32:08 Speaker_04
And then making acquisitions to strengthen existing businesses, or even to go into new areas, where Bain & Company would do all the investigation, because particularly if it was outside the industry that the company knew about, of course they had no idea.

01:32:21 Speaker_04
So it was a wonderful machine for getting growth from existing clients. And this was what Bill Bain always used to say, I have no idea why everyone's interested in new clients.

01:32:35 Speaker_04
We don't need new clients we should have built in growth from existing clients if we're doing our job correctly if their profits are going up in the market values going up and of course they didn't say no to new clients and they use the existing clients who are satisfied particularly those who sat as non executive directors outside directors on the boards of other companies to say you know,

01:32:55 Speaker_04
I'd like to show you a sample of the work which Boehner & Company has done in our industry.

01:33:02 Speaker_04
And I participated in one of those events in New York, where we were working for an information company, and we went to present to a board of that information company.

01:33:14 Speaker_04
But one of the people on that board was the chief executive of a scientific company. And subsequently, they hired Boehner & Company largely

01:33:24 Speaker_04
because i think of the recommendation of the chief executive and to a small degree the quality of the dazzling quality of the presentation i made well as a result of that banning company made me a partner nominally a partner a vice president whereas i went in as a consultant and that would normally take several years well that happened after 18 months and

01:33:47 Speaker_04
It was a very interesting conversation with Bill Bain when he told me that I was going to be a partner of the firm. And what he said to me was, You know, I'm going to say something which might surprise you.

01:33:59 Speaker_04
You know, we've had our eye on you ever since you came and talked to me, blah, blah, blah. And I want you to be one of my partners. And I thought, you know, this is ridiculous. I, you know, I didn't expect this.

01:34:09 Speaker_04
And he said, but there is something which we're going to do. And I don't think any other firm in the world has ever done this. Not to my knowledge, maybe you can correct me.

01:34:18 Speaker_04
But what they said was, we are going to promote you, but only in nine months time. And it's a done deal. You know, there's no question that you'll be one of my partners. And I can even give you something to sign and sign something myself.

01:34:33 Speaker_04
But, you know, if we made you a partner now, people might wonder what on earth we were doing. In that nine months, you've got to behave as though you're already a partner without the authority of being a partner.

01:34:45 Speaker_04
But just through force of personality and through knowing that you are reflecting the Bain way of doing things, you will, when we actually make the announcement that you are going to be a partner of the firm, everyone will say, well, of course, of course.

01:35:00 Speaker_04
rather than say, how come that cautious got promoted? That's unbelievable. So Bill was such a clever man at controlling his organization. And he didn't work very hard.

01:35:12 Speaker_04
But he didn't work very long anyway, but he gave a great deal of thought to the procedures and to the management of his own company to make sure that everything that happened in Bain & Company had been initiated in one way or another by Bill Bain and make sure that that was the thing which was going to make the most money for

01:35:33 Speaker_04
Bill Bain for Bain & Company and also, I'm making it sound as though it's an incidental thing, but it was very important. It's the whole foundation of it for the client organization. It was just a fantastically well run organization.

01:35:46 Speaker_04
And it grew at 40% a year for 20 or 30 years, whereas BCG had struggled to grow at 20%. Bain & Company fell on hard times, I think in the late 1980s, because they did a leverage buyout. But that's another story.

01:36:00 Speaker_04
I'm not going to say any more about Bain & Company.

01:36:04 Speaker_02
Well, I'm not going to let you off the hook that easily. You said, you explained rather, what Bill Bain asked of you to behave like a partner, even though you won't have the official title and we can't make the announcement until nine months hence.

01:36:19 Speaker_02
In practice, what did that look like? What changed in your behavior or in what you did?

01:36:25 Speaker_04
Oh, it totally changed me. It totally changed me. For one thing, it made me loyal. And I was always someone who was on the verge of committing self-destruction, self-destructing, because I'm a natural rebel. I'm a non-conformist.

01:36:42 Speaker_04
I'm very opinionated and almost unemployable. And that was the conclusion that everyone eventually came to. But, you know, in BCG, I was well known for going off script.

01:36:55 Speaker_04
And I remember one of my appraisals was, most of the time, Richard, he's like a volcano, this guy wrote, in a formal written assessment, and I've still got the assessment, it's lovely.

01:37:06 Speaker_04
It said, he's like a volcano, most of the time, he's sort of, you know, working away, and there are no rumblings, and it's all very smooth. But occasionally he erupts like a volcano.

01:37:20 Speaker_04
And he says something to the client, which is not what we want the client to hear. And he basically goes off at a tangent or he, you know, he has his own view about things. So when I'm with Richard, and talking to the chief executive of

01:37:34 Speaker_04
the NU, you know, big information company in Holland or whatever. I am very nervous. I never know what Richard's going to say. In Boehn & Company, I'd have been fired if I'd have said, my vice president said, you know, something.

01:37:51 Speaker_04
And I said, I agree with 99.9% of that. But here's a slightly different view on 0.1%. I'd have been out the door straight away. So it was a complete contrast.

01:38:03 Speaker_04
So the first difference it made was that I felt very loyal to Bill personally and to the organization, which I'd never really done before. I didn't do loyalty. I didn't really do teamwork very well. So that was the first difference it made.

01:38:17 Speaker_04
The second difference it made was that I decided that I would become much more direct with the people who were working with me, if they were at the same level, if they were below me in the organization, or even sometimes if they're slightly above me.

01:38:32 Speaker_04
But I did it very nicely. And so if I thought they were going in the wrong direction, I would say, well, you know, I've been thinking about this, Fred, and I think there's a better way of doing it than this.

01:38:43 Speaker_04
Instead of interviewing the customers in this segment, we should interview them in that segment, we should ask these questions rather than those questions, etc, etc.

01:38:51 Speaker_04
So it made me much more, paradoxically to me, it made me more diplomatic, but it also made me more assertive. And so it was great. I mean, I actually thought, gosh, they're gonna make me a partner, and I'm gonna be a very successful partner.

01:39:06 Speaker_04
And that's fantastic. But it made me feel I was a little cautious because although Bill Boehner signed his bit of paper and all the rest of it, I knew that that meant nothing if he wanted to change his mind.

01:39:18 Speaker_04
So I thought, well, the prize is well within grasp. But I feel confident now. It gave me confidence. So I was able to do... I was much more effective as a result of that.

01:39:29 Speaker_04
In fact I was probably more effective when I wasn't a partner than when I was because I was, I wanted it so much but at the same time I felt in some ways although nobody knew that I had authority in reality I did and that was a tremendous thing and I don't understand why firms don't do this more broadly it's a fantastic way

01:39:49 Speaker_04
of encouraging personal development and also of keeping people who might otherwise decide to leave before they're given the nod that actually they are really appreciated and they are going to get promoted.

01:40:01 Speaker_02
I was going to ask you more about L.E.K., which was the consultancy you started, which experienced incredible growth. And we may get to that, but I want to skip ahead a little bit. And I'm going to do that

01:40:14 Speaker_02
In a foreshadowing fashion by mentioning the twenty principal which will come back to in an interview that i have in front me a separate interview.

01:40:22 Speaker_02
The question is what book has had the single biggest impact on your career and you answer my own book twenty principal because it sold more than a million copies has been translated into more than thirty five languages it goes on and on about that which we're gonna return to.

01:40:34 Speaker_02
And then you say at the end of the answer that many of your books and much of your investing are related to ideas on strategy consulting.

01:40:43 Speaker_02
And you learn those firsthand, not from books, but that you can recommend a book called Perspectives on Strategy, edited by Carl Stern and George Stock. Can you speak to what people might learn in that book and why you have recommended it?

01:40:59 Speaker_04
It's a collection of the early perspectives of Boston Consulting Group. And a perspective was what an evangelical group would call a tract, I suppose. It would be something like 500 words, maybe 1,000 words, pretty short.

01:41:16 Speaker_04
It would be snazzily presented in the livery of BCG, which was quite a nice dark green color.

01:41:24 Speaker_04
and it would be mailed to the senior directors of companies in america and britain and then wherever bcg had offices and the very valuable thing about the book is a lot of the stuff is by bruce henderson himself but there's also more modern stuff

01:41:43 Speaker_04
And it outlines the theory that BCG had in the early days, which I think is still entirely valid of competition, the experience curve, the Boston box, the gross share matrix, et cetera. And it's just a very, very good primer.

01:42:01 Speaker_04
And there are many, many books on business strategy, including one which I've written, but I think this is a very, very good thing. And it's very easy to read because it was deliberately designed

01:42:13 Speaker_04
To do that bruce laid out the principles for the perspectives very clearly which was anything that the chief executive would be likely to agree with was not argued i mean it was stated and anything that the chief executive would be likely to disagree with which was quite a lot because bcg was on the mission of saying companies should reduce their costs and reduce their prices steadily

01:42:36 Speaker_04
Whereas the conventional wisdom in business at that time was if you get a higher price, stick with it and don't worry too much about the costs. And Bruce had a whole theology around that.

01:42:49 Speaker_04
And it's great because it's a collection of those different perspectives. And it's over several years. So you get the more modern stuff as well. I think it was published in 2000 or something like that. So it is difficult to get good books on strategy.

01:43:01 Speaker_04
There's a book by someone called Richard, oh God, I can't remember his name, called Good Strategy, Bad Strategy. He'll come back to me. But anyway, type it into Amazon if you want. Good Strategy, Bad Strategy.

01:43:13 Speaker_04
That's actually a very good strategy book, very nice short strategy book. And there's my Financial Times Guide to Strategy, which I'll give a small plug to.

01:43:21 Speaker_04
Out of print at the moment, but I'm producing the fifth edition as we speak at the same time, in the same period of time. Good Strategy, Bad Strategy by Richard Rumelt. Does that sound correct? God, isn't the web amazing? Aren't you amazing?

01:43:36 Speaker_04
It'd be far more impressive if I was actually pressing the keys and came up with that myself, but I don't do that.

01:43:43 Speaker_02
Well, I'll give away one of my tricks, and that is if I'm recording an interview like this, I don't use my keyboard. I have my phone on silent so that I can tap the screen without making noise to find things like that. You're very clever.

01:43:58 Speaker_02
Well, you can have a flunky who did that for you, but it's very impressive that you do it yourself. That's true. Well, it's just for on-the-spot tap dancing like that.

01:44:07 Speaker_02
Earlier in the conversation, I made a promise to the listeners, and that was in the form of alluding to knowledge versus principles, which I think is perhaps a useful way to segue to the 80-20 principle.

01:44:21 Speaker_02
From mergersandinquisitions.com, which is a great website, the distinction that I've read you drawing is the following. What I learned from consulting is exactly what I've been teaching. Knowledge is great, but principles are better.

01:44:33 Speaker_02
Principles are ideas that enable you to sort the knowledge, help you to analyze it, and get to the essence of the matters as simply and quickly as possible. Would you like to add anything to why principles

01:44:43 Speaker_02
are important and the second part of that is how did the eighty twenty principal come to be as a book because it was a very much and sort of underground became an underground bestseller principles anything more that you'd like to add and then where did this book come from.

01:44:58 Speaker_04
No, I think you put it very well. I just think there are certain meta principles and I think there are probably only about half a dozen of them for the benefit of myself and the people that I work with and invest with, invest in rather.

01:45:11 Speaker_04
It's basically the 80-20 principle and the STAR principle. So if you know what those are, then you can look at the business in a way that most people don't look at the business very quickly and see whether there's potential for improvement.

01:45:26 Speaker_04
And we'll talk about that in regard to the 80-20 principle in a second, no doubt. But how did the book come about? Well, again, that's quite interesting.

01:45:34 Speaker_04
It's interesting to me, which is that I wrote something called the A to Z of management, because I had an editor who was currently working at Pearson and later left to start his own firm with another editor there. And the editor was called Mark Allen.

01:45:52 Speaker_04
The other editor was called Richard Burton, very, very skilled guys, very nice guys. And they were looking to sort of, you know, try and get something by me published.

01:46:05 Speaker_04
And Mark Allen said to me, you've written this thing called the A to Z of management, which is basically a paragraph about various different concepts.

01:46:15 Speaker_04
and it covered all the principles i could think of it also covered important theorists in business and it covered anything which was of interest in business and it also covered jargon phrases like you know what did what did people mean by work in progress and stuff like that anyway i've written half a page on the 80 20 principle and i went to see mark allen one day in his offices in covent garden and

01:46:44 Speaker_04
He said to me, Richard, I've got a book for you to write. I said, yeah. And he said, what about writing a book about the 80-20 principle? because you've got this half page on it here, and it seems to be quite an important thing.

01:46:56 Speaker_04
You say it's very important, and I can understand it's very important. So why don't you write a book on that?" I said, Mark, I couldn't possibly. I couldn't possibly write a book about the 80-20 principle.

01:47:06 Speaker_04
I've said it all in that paragraph, and I could maybe pad it out to a page. If you really put a gun to my head, I could write a chapter. But I'm not going to write a whole bloody book about this, because there isn't anything more to say."

01:47:25 Speaker_04
And he said, well, I'm not so sure about that. Then he decided that he would go off and start this other publishing company. So he wasn't interested in me doing it for them, and they had not got themselves organized.

01:47:37 Speaker_04
So I went to see a guy called Nicholas Brearley, who was the publisher of the eponymous firm, Nicholas Brearley. And very, very, very nice man, incredibly smart guy.

01:47:50 Speaker_04
And I'd written a book for him called Managing Without Management, which was a title which he suggested was very clever, because it basically said, managing in particular middle management was a complete waste of time.

01:48:02 Speaker_04
And so you could manage without it, managing without management. And the book wasn't a huge success, but it sold, I don't know, 20,000 copies, which was good enough for Nicholas Brearley at that time.

01:48:14 Speaker_04
And I went to see him about another book shortly after I'd had the conversation with Mark Allen. And he said, do you have another book in mind? I said, well, not really. But this sort of idea that someone's given me,

01:48:27 Speaker_04
And, you know, they've got first dibs on publishing it if I could ever write a book about it, but I don't think I could write a book about it.

01:48:33 Speaker_04
And then I described to him what the 80-20 principle was, and honestly, I didn't take more than about 60 seconds, because there wasn't much to say as far as I was concerned. And he said, the hairs on the back of my head are rising. And I said,

01:48:46 Speaker_04
What do you mean? I thought he'd lost the clock or something like that. And he said, that can be a big successful book. And I said, no. I mean, well, maybe, but how do I pad it out to a book's length? He said, go and do some research.

01:49:03 Speaker_04
You know, you've mentioned Vilfredo Pareto, you know, read the book again, read all the other stuff, read all the stuff on the web, you know, and the truth was that there was a hell of a lot of stuff on the internet.

01:49:12 Speaker_04
And this was back in 1996, but was eventually published in 1997. You know, this was a golden, the beginning of the golden period of the internet.

01:49:21 Speaker_04
And I hired a researcher and said, find out everything that's going on on the internet, on the 80-20 principle. At that stage, I didn't know how to use the internet.

01:49:29 Speaker_04
So she came back and gave me this whole file and I said, Diane, is that all about the 80 trends principle? And she said, yes. And I said, well, maybe I could write a book. So anyway, I went through it all.

01:49:45 Speaker_04
And the more I went into it, the deeper it actually, and the more interesting it was. And so that's how I ended up writing books. So I went back to my original guy, Mark Allen, said, do you want to publish this book? He said, no, we can't.

01:49:57 Speaker_04
We've left Pearson at the time. And we haven't started our firm yet. So I went back to Nicholas Brearley, and he was very pleased. You know, the first draft I produced, he said, very politely, he said, I think you need to go and do some more research.

01:50:13 Speaker_04
And it was pretty hopeless, actually. But the second draft, I took back and he more or less published it as it was, because by that stage, I've worked it through. And it was a it was a great thinking exercise for me. And it

01:50:26 Speaker_04
The whole point about making a book out of it was that i extended the reach of the principal the basic principals i'm showing your listeners no is that if you look at any particular relationship between sales and another variable or you look at time and another variable you might be interested in

01:50:50 Speaker_04
It's usually true that there are very few events or data which account for a large majority of the total.

01:51:00 Speaker_04
And so if you look at the profits of any company by customer, usually there are a very small number of customers, a very small proportion of the total who account for 80% of the sales and maybe more than 100% of the profits of a company.

01:51:17 Speaker_04
And likewise if you do the same thing for products you like you to find the same thing this was a well-known economic concept anyone been to business school and heard it was generally called the parade so rule at that time but i wanted to call it the eighty twenty principle because it was more descriptive

01:51:35 Speaker_04
A rule, to me, sounded too deterministic. Principle sounded, to me, exactly right. So I actually invented, I think, the 80-20 principle. I don't think anyone ever called it that beforehand. They would call it the 80-20 rule or the Pareto rule.

01:51:50 Speaker_04
So the idea seemed to me to be applicable well beyond the sphere that had been used before, which was for really

01:51:59 Speaker_04
Analyzing sales and profits and i said well why can't we use the twenty principle in other areas in people's personal life for example and so i become quite fascinated by the connection between time, and results.

01:52:17 Speaker_04
And then it was a short hop from that to extend that. So basically, I would say to people, well, the hypothesis, and the whole thing about the 80-20 principle is not that it's a rule, but it's an observation.

01:52:30 Speaker_04
So you come up with a hypothesis, and then you test whether it's true with data, if you possibly can, but with, you know, seeing if you think it really is true, if it's something much more subjective and squishy,

01:52:42 Speaker_04
So you actually could then say well it's probably true it may be true that twenty percent of your time generates eighty percent of your useful output so tell me what the most valuable things are that you do.

01:52:57 Speaker_04
And I would say that to people at work, and they would have no difficulty at all in saying, well, it was inventing this new product, or it was selling a large job to this particular customer, or it was writing some copy, which is very, very effective, or it was making a website, or whatever it was.

01:53:14 Speaker_04
And I would say to them, well, you've got to do more of that and less of the other stuff.

01:53:19 Speaker_04
And I'd also say to people that if you manage to do something which is hugely more valuable than the other stuff and you do that in half a day, take the rest of the day off. And if you do that for two days, take the rest of the week off.

01:53:31 Speaker_04
If you want to, if you want to carry on working and do even more, that's right.

01:53:35 Speaker_04
But, as Parkinson said, work expands to fill the time available, spending expands to fill the budget which you've got to spend it, whether it's inside a firm or it's your own money.

01:53:46 Speaker_04
I was quite interested, incidentally, in hearing an observation which one of your other interviewees said about the Wall Street of the, well I don't know, was it 1980s or whatever,

01:54:00 Speaker_04
And basically people got very very used to the money which they don't do it hugely overpaid but never less they found ways to use that and that was a big trap for them not for him but for the others because what they did was that they got locked into working for salomon brothers or goldman sachs or whatever and after a time they couldn't really leave

01:54:22 Speaker_04
Because their wives or their own personal tastes had developed to such an extent, or their husbands, they needed the money. They had to have half a million dollars a year. They couldn't live on less.

01:54:34 Speaker_04
So I was saying to people, well, let's extend this to your personal life as well.

01:54:40 Speaker_04
So if time is important at work then maybe time is important elsewhere and maybe you get most of your happiness from a relatively small proportion of your time what are the periods of time where you actually feel that you are being fulfilled that you feel you don't notice time escaping when you feel

01:55:00 Speaker_04
So this is great and you wake up and you find that you know the night's gone it might be playing poker it might be talking to friends it might be reading something that's very exciting might be going to see a movie or whatever but what are the times that you are happiest.

01:55:17 Speaker_04
and then just try and multiply those times. And then I said, well, you could apply that to friends. Let's take the 80-20 hypothesis that you get 80% of your relationship satisfaction from 20% of people.

01:55:28 Speaker_04
I mean, it's a bit gross in a way, but it's very true. I found when talking to people that very often they spent time with people they didn't really like very much. I mean, obviously, sometimes it was their boss. So, you know, that was a disaster.

01:55:44 Speaker_04
And they

01:55:45 Speaker_04
bloody well better get a different boss or different phone but sometimes it was so simple as things like your spouse actually like these people but you didn't say you ended up spending a lot of time with neighbors with other people members of his or her family that you didn't really want to spend and what you really want to spend your time with something different.

01:56:06 Speaker_04
And so I said to people, well, you know, you might want to be a bit more ruthless about that. And so there's a chapter on happiness in the book, which I was rereading recently. And I think it's actually rather good.

01:56:19 Speaker_04
I mean, it's taking the sort of rather arcane, dusty economic principle, and then seeing whether it could apply to other areas of life, and I invented the concept of happiness islands.

01:56:31 Speaker_04
Well, a happiness island is part of your life, which is sort of not the main part of the life, but when you get a huge amount of satisfaction from that.

01:56:39 Speaker_04
And I said, well, live on those happiness islands and try, if possible, to make them happiness continents.

01:56:43 Speaker_04
So if there's a particular type of work which you like doing at work, then try and get yourself in a position where you're spending all your time doing that sort of work, and so on and so forth.

01:56:52 Speaker_04
And I see it in many ways as a kind of amateur version of the flow idea, which is that these times, according to the guy with the unpronounceable name, Mihaly Csikszentmihalyi, something like that. Yeah, he's written a couple of books about this.

01:57:12 Speaker_04
It all boils down. I mean, I think that they say 80-20 principle could be written on one page. I think that could all be written on one page. But it's a fantastic idea. It's a slightly more sophisticated way of saying what I was trying to say.

01:57:24 Speaker_04
And there's stuff on there in money and all the rest of it. So it was a reinterpretation

01:57:30 Speaker_04
of the principle to apply it to not just to business, but to people's personal lives and to try and say a few things which were really useful and which people could take away, which is what you do, isn't it?

01:57:42 Speaker_02
That's what I try to do. That's what I certainly try to do. And for all the reasons you just mentioned and many more, this is why the 20 Principle, your book, faces cover out on my bookshelf and has for a very, very long time as a constant reminder.

01:57:59 Speaker_02
Could you share, just as examples, because it may help people listening, some examples of your own happiness islands or achievement islands?

01:58:08 Speaker_04
Yes, I can do that. The things that I really like doing are writing books and making money, and making money through investments, not through gambling or anything like that. and talking to people. I really used to like

01:58:23 Speaker_04
going to dinner parties in the days when we had dinner parties. I really like to go for long walks with people that, not many people, but a few people that I know, we will discover something that we didn't know we knew beforehand.

01:58:39 Speaker_04
Those are the things that really are interesting. Doing something like this podcast is a flow activity as far as I'm concerned, an 80-20 activity. So it's that sort of stuff. It's books,

01:58:51 Speaker_04
It's writing books, and it's also reading books, and it's talking to people, and it's also making money through investments.

01:58:59 Speaker_02
Do you have any regular or scheduled check-ins or calendared reviews where you assess your life to ensure that you're allocating your time and energy to match what you know to be happiness islands or achievement islands? In other words, how do you use

01:59:20 Speaker_02
if you do in any systematic way the 80-20 principle in your life?

01:59:25 Speaker_04
No is the short answer, but let me qualify that a little bit. I do something which is very unsophisticated. Other people have therapists, and other people have personal trainers, and other people have quite elaborate systems for

01:59:40 Speaker_04
for keeping track of their objectives or their concerns or worries and so on and so forth. I have bike rides. Every day I go for a two hour bike ride in the countryside. It is every day unless I'm away or unless I'm in Cape Town.

01:59:56 Speaker_04
I've got a home in Cape Town and it's too dangerous to ride a bicycle there. But everywhere else I will ride a bicycle. And I take pretty much the same route every day. Very unadventurous. I've got two alternative routes in Portugal, for example.

02:00:12 Speaker_04
And during those bike rides, something will come up sometimes. Not very often, but something will always come up.

02:00:20 Speaker_04
At the very least, I will work out what I'm going to do that day, because that's one output from a bike ride, and it just happens automatically. I don't even have to think about it. When do you do the bike rides? I presume in the morning?

02:00:31 Speaker_04
In the morning, yeah. I don't answer emails. I don't look at my phone. I do have a cup of tea. And sometimes I take the dog for a walk. But apart from that, it's the bike ride. It's wonderful. I mean, you know, I couldn't do without it.

02:00:44 Speaker_04
And in fact, when I'm away, and I can't ride a bicycle, I'm talking to you from Gibraltar, for example, and I do spend a fair bit of time in Gibraltar where I have an apartment.

02:00:54 Speaker_04
But here, it's also too dangerous to ride because the streets are too narrow, and there I have to substitute going for a walk or going to the gym.

02:01:03 Speaker_04
But basically, a form of exercise which is mindless, which is not too difficult, but enjoyable, where I can just relax and let my unconscious mind do whatever it does, That's how I do those sort of things.

02:01:16 Speaker_04
And occasionally, I go and sit on my fish pond with a notebook and say, it's time to think about some reflections. I make a point of only doing that when I'm in a good mood. I never do it when I'm actually feeling slightly down.

02:01:31 Speaker_04
I'm usually in a good mood. But it's something to do when you're being expansive rather than you're doubting yourself.

02:01:38 Speaker_04
and i keep those notebooks and very occasionally also i wake up in the middle of the night and i have thought of something that i had not thought of before and then i have a notebook by the bed if it's not by the bed it's in my office which is very close to my bedroom and so i will make a cup of tea put the light on write my thoughts put the book down put the light out

02:02:02 Speaker_04
to sleep. And those thoughts are usually quite seminal. They're very, very helpful. But it all happens sort of automatically. I don't have any systems or anything like that. Do you?

02:02:13 Speaker_02
Well, I would say I have acute hypergraphia and take copious notes, most of which end up never being read, and certainly most of which end up being completely unimportant. But amongst all the garbage, there are occasionally useful things.

02:02:31 Speaker_02
I find journaling very helpful for me, different forms.

02:02:35 Speaker_04
It's the writing which is important, isn't it? It's the writing. The writing somehow ingrains it on your mind. Do you find that? I do find that. It's not, as you say, one may never review the notes. I do actually review my notebooks.

02:02:49 Speaker_04
When I'm on a plane and got nothing better to do and no book to read, But it isn't that. It's actually the process of, I think the process of writing journaling is very, very, very useful. But I don't do it every day and I don't do it systematically.

02:03:04 Speaker_04
I just do it when I feel the need to do it.

02:03:06 Speaker_02
I would say I have two different types of journaling and then I'd like to ask you about your time at the pond in a moment and just what that actually looks like and maybe some examples from what you've written down.

02:03:15 Speaker_02
I would say I have two types of journaling. The first is almost entirely like emptying the garbage bin on a Mac to purge the system.

02:03:26 Speaker_02
It is simply to trap my monkey mind and all of the bullets ricocheting around inside my mind on paper so that I can get on with my day in a better fashion. The second type is more deliberate and

02:03:41 Speaker_02
objective driven, where I might sit down and very explicitly do an 80-20 analysis of the types that you've been describing, looking at how my time is being used, look at my calendar to see if it actually matches what I say is important to me, etc.

02:03:58 Speaker_02
So there are, I'd say there's two main categories. Morning pages from Julia Cameron's template would be in the former as an example.

02:04:07 Speaker_02
But when you go to the pond and you sit down and you're in an expansive mood and you journal, what does that look like? Is it stream of consciousness? Are there certain prompts that you might use?

02:04:18 Speaker_02
Could you give us any real world examples of what has come from those types of sessions?

02:04:23 Speaker_04
Yes. I mean, what I do is I write reflections, and I put the date, and then I put numbers, and then I just start writing. And one of the things that comes out from that, which came out from that recently, was thinking about my investments.

02:04:39 Speaker_04
And I was struck by the fact that I was average, to say I was average timing, each investment would not be fair. But I was spending a lot of time on stuff that actually wasn't at all important.

02:04:54 Speaker_04
And I was doing it partly through interest, partly because I perhaps felt some residual sense of obligation to the people who were managing the firm and other shareholders.

02:05:03 Speaker_04
So, you know, one of the things which I decided was I was not going to worry about any companies which were outside the first, you know, half dozen in terms of the value of those companies, unless the value was increasing very fast, or had the potential to increase very fast.

02:05:19 Speaker_04
And the other thing which I realized, because I'm always almost completely invested, was that that was not actually a terribly sensible thing to do. And the next time I have a major realization,

02:05:30 Speaker_04
I should be prepared and I should have two or three companies which are new companies.

02:05:36 Speaker_04
In other words, investments I have not yet made where they do have the potential to be star businesses or they already are star businesses where I like the people involved.

02:05:47 Speaker_04
And that's a sine qua non for me that I don't invest in things unless I actually like the people and where a relatively small amount of money might conceivably be another betfair or whatever.

02:05:58 Speaker_04
So it's quite easy for me, because I've got a couple of companies that are increasing in value quite fast, and I'm reasonably confident that they will continue to do so the next few years, to be sort of, you know, rather complacent about that.

02:06:11 Speaker_04
But in order to maintain the sort of rate of return that I've had historically and that I want, I probably need to find a new Betfair or two or three new Betfairs over the next five years. And I should give a bit more attention

02:06:25 Speaker_04
to trawling for that and talking to my contacts that might conceivably know of such companies. And actually, you know, I do get some leads. I don't always follow them up very well. So yes, so it can be useful from that point of view.

02:06:39 Speaker_04
And the other thing which I've realized as a result of journaling in the last few months is that I am too socially isolated. I mean, I've got some very good friends. I don't see them as often as I would like.

02:06:53 Speaker_04
And because I have such a really nice life, living in very pretty places and living in sunny places generally, which is very important for me to be outdoors, so that I can play tennis or ride the bicycle or sit on the fish pond or whatever.

02:07:09 Speaker_04
I want to pay more attention to social interaction and to spending more time with the people that i spend enjoy spending time but they're not close to where i am so those are the conclusions which have come up in the last six months and then there are the more philosophical conclusions which you sometimes come to which sometimes you write down for example.

02:07:33 Speaker_04
One of the things which i learned in the last few years is i have been. far too much of what I call a controller, and far too little of what I call an adventurer.

02:07:45 Speaker_04
And my life has always run upon lines of saying, I must do this, I must achieve this, I must make this sort of amount of money, I must have this type of job, I must do this kind of thing, I must start a company, and so on and so forth.

02:07:59 Speaker_04
But recently, I have realized that the people who have most fun in life

02:08:04 Speaker_04
I'm more the adventure type than the controllers in fact to come back something i hope we can spend a little bit of time on later on which is my new book unreasonable success and how to achieve it there are twenty people who change the world in my opinion in that book and.

02:08:22 Speaker_04
It is not in the book at all, but it's something which I did after the event. I divided those very successful people into controllers and adventurers. And I was quite surprised to find the 14 of them were actually adventurers in one form or another.

02:08:38 Speaker_04
And only six of them were controllers. There were some who were both, but that was the count taking halves into account. And for example, one of the people who was a controller in the book,

02:08:52 Speaker_04
was sort of my evil, evil successful person, which was Vladimir Lenin. And, you know, his life was pretty unpleasant, because he was always trying to control other people. And it was a very uphill struggle.

02:09:06 Speaker_04
And he achieved a great deal in his terms, I mean, not things I would approve of, but he was the founder of practical communism.

02:09:14 Speaker_04
And he basically made communism a success in very large parts of the world, a success in the sense that they remained communist. And they did develop the countries were perhaps not as fast as they would have developed under a free market system.

02:09:27 Speaker_04
But, you know, from that point of view, he was very, very successful, but he didn't have much of a great time.

02:09:33 Speaker_04
Whereas some of the people who were much more freewheeling, for example, the freewheeling Bob Dylan, or even Otto von Bismarck, they had much more fun because they, although they were determined to achieve things, they relied upon events flowing their way and they just bided their time until

02:09:52 Speaker_04
the right moment came along and then they worked, then they basically made a huge effort to control, or not control events, but to actually steer them.

02:10:03 Speaker_04
One of the great quotes which I like is from Bismarck who said, man cannot control the flow of events, all he can do is ride with them and steer.

02:10:12 Speaker_04
So I, you know, sometimes you get those sort of kind of philosophical reflections coming up more often, though, probably on a bike ride, and then I might write it down afterwards. But I actually find it quite difficult to be as radical as that.

02:10:27 Speaker_04
just sitting down and writing. I tend to write, you know, things which are, they're much less important in a way. They're less distant.

02:10:36 Speaker_02
This was on my next note to segue into, that is the new books. Let's talk about the Genesis story. And this is always interesting to me as someone who occasionally tries to wordsmith things.

02:10:52 Speaker_02
And that is the sort of embarrassment of riches that you no doubt have in terms of possible subjects you could explore. So unreasonable success and how to achieve it. You've written many books. Why this book?

02:11:04 Speaker_04
I've always been fascinated by success and I've always been fascinated by the discrepancy really between as I see it.

02:11:13 Speaker_04
The arbitrary nature of success in many ways, which is that the people who are successful are not necessarily the people who are most intelligent or most expected to succeed or who deserve it.

02:11:25 Speaker_04
Many of the 20 people that I highlight in the book weren't even competent. Winston Churchill was a prime example of someone who was a complete failure through most of his career.

02:11:35 Speaker_04
Got one thing right, which was that Hitler was a threat to the world and that he knew how to deal with Hitler. But basically, the man was a disaster and he thought that oratory would propel him to become prime minister.

02:11:48 Speaker_04
But, you know, as Herbert Asquith said, it does not matter if you speak with the tongues of men and angels if nobody trusts you. It was directed exactly at Churchill.

02:11:59 Speaker_04
so i've always been fascinated by success but the actual genesis of the book as you said came on a train journey i was traveling from paris with a friend of mine to leon and i always take a book with me and i didn't have a book a new book that i wanted to read so i took an old book

02:12:17 Speaker_04
which was malcolm gladwell's outliers and you probably remember that in outliers the whole thesis is that success derives from deep experience and long exposure to doing something in a very narrow field and he came up with the idea of the ten thousand hours which is now a trope something which everyone talks about

02:12:39 Speaker_04
And he gave a couple of examples very early on in the book, which resonate very nicely, which is the Beatles, for example, in 1960, they were just a rather poor high street band.

02:12:51 Speaker_04
And then something happened to them, which was that they went off to the strip clubs of Hamburg, and they had to play seven days a week, eight hours a day.

02:13:02 Speaker_04
And as John Lennon's quoted in the book is saying, we couldn't help improve with all of that extra experience.

02:13:08 Speaker_04
And then he quotes the example of Bill Gates, who because he went to a private school, which unlike the vast majority of schools at the time, in America or anywhere else, had got computers, you know, he was able to acquire expertise in coding and how to use computers.

02:13:26 Speaker_04
And that was his sort of, you know, he got his 10,000 hours in very, very quickly. So the problem with that thesis is that it's not universally true.

02:13:36 Speaker_04
It certainly applies to Bill Gates, it certainly applies to the Beatles and it applies to some other people as well. But of the people that I looked at,

02:13:45 Speaker_04
That couldn't explain it and what i did was i took twenty people whose life stories i knew well some in some cases i'm even personally such as bruce henderson bill bane who i talked about before who were very important to me and hugely underrated in terms of the impact which they had on american and world business in my in my opinion but i took those people and then i said

02:14:07 Speaker_04
Would it be possible to do what malcolm gladwell set out to do and in my opinion did not succeed in doing would it be possible to look at the causes of success for those people and identify things which were common to all twenty people.

02:14:23 Speaker_04
which they all had or did, it might be an experience that they had, or it might be an attitude which they had, or it might be a way that they exploited particular opportunities.

02:14:33 Speaker_04
Would it be possible to look at that and say that there are things which are so universally present that if you want to be what I call unreasonably successful, which is more than you deserve, if you like, terrifically successful in changing the world the way you want to change it, it might be a small corner of the world or it might be a big corner of the world,

02:14:53 Speaker_04
Would it be possible to isolate the reasons for that? And I looked at 50 possible reasons. For example, I looked at, would you need to be a high-risk taker? And the answer was, of those 20 people, only 9 of them actually took very high risk.

02:15:06 Speaker_04
Of the 20 people in my book, only 9 of them actually took very high risk. So that went away. And then I narrowed it down to 9 reasons.

02:15:15 Speaker_04
which were universally present in all of the cases and I did not throw people out if they didn't meet the nine requirements I was quite rigorous with myself I said no and the people like the players that I took were besides Bill Byrne and Bruce Henderson there was Jeff Bezos, Otto van Bismarck, Winston Churchill, Marie Curie, Leonardo, Leonardo da Vinci,

02:15:36 Speaker_04
Walt Disney, Bob Dylan, Albert Einstein, Viktor Frankl, the guy who was shoved into a concentration camp by Hitler but came up with the third wave of psychology after Freud and Adler and was probably the first real existential philosopher.

02:15:49 Speaker_04
Bruce Henderson mentioned Steve Jobs, John Maynard Keynes who saved the world from fascism and communism perhaps as a result of saying that you didn't have to have very high unemployment

02:16:00 Speaker_04
and the state could step in and that would be fine under a liberal capitalist regime. Lenin, I mentioned, Madonna, Nelson Mandela.

02:16:09 Speaker_04
totally obscure guy who was imprisoned on Robben Island 17 years, but somehow managed to negotiate a democracy in South Africa. J.K. Rowling, Helena Rubinstein formed the eponymous cosmetics company before anybody else had a cosmetics company.

02:16:27 Speaker_04
The person who I think was most successful of all of my 20 people, Paul of Tarsus, I don't like calling him Saint Paul because it makes him sound like an establishment figure. He was never an establishment figure.

02:16:39 Speaker_04
He had this vision of the living Christ, and he preached that throughout the Roman world.

02:16:45 Speaker_04
But he did something that none of the other followers of Jesus did, which is, as you said, following a Jewish customer base, if you like, is not the way to make a new religion take off. We don't want to be a very small sect within Judaism.

02:17:00 Speaker_04
I actually want to convert people in the whole world.

02:17:04 Speaker_04
And therefore, what we need to do is to turn, you know, that sort of Jewish religion that Jesus had been enveloped within, and take away from that the things which actually were universally applicable.

02:17:19 Speaker_04
So, you know, without Paul, what eventually emerged as Christianity would never have either achieved liftoff, nor transcended its Jewish roots.

02:17:28 Speaker_04
So fantastically successful, you know, I mean, who would have thought that Christianity could actually succeed? It was just a miracle. Margaret Thatcher was the other one of the 20 people.

02:17:39 Speaker_04
So I came up with these nine things, which were common to all of them.

02:17:44 Speaker_02
I'll rattle through those if you like. Definitely. Feel free to list the nine, but before we do that, if you could just take a moment to define success, since many people define success differently.

02:17:57 Speaker_02
Could you speak to what that means in the context of unreasonable success? Is it achieving what they set out to do, or is it something else? And then I would love to know what the nine characteristics are.

02:18:10 Speaker_04
Yes, it is. I think success is very subjective and can only be the person's objectives. And I mean, people said to me, how on earth can you put Lenin in the book?

02:18:19 Speaker_04
And in fact, at one stage, I had Hitler in the book and the publishers insisted on it being thrown out because they said the booksellers would never sell it. If he was in the book, I said, well, we don't like Hitler. I'm in favor of Hitler.

02:18:29 Speaker_04
He said, no, Hitler's got to go. So it's value-free in the sense that it is what they achieved, which changed the world the way they wanted to change it, whether that was a good thing or a bad thing or an indifferent thing.

02:18:42 Speaker_04
That's unreasonable success in one definition.

02:18:45 Speaker_04
Success is a whole continuum as far as I'm concerned, and I'm not against minor successes at all, that's absolutely great, but what I was really interested in, in order to establish the most important causes of major success, is what I call unreasonable success, and I had four criteria for that.

02:19:03 Speaker_04
You could say that in a word it's undeserved success, but that's a little bit unfair. Firstly, it's such success in changing the world, it seems unreasonable for one individual to do that.

02:19:15 Speaker_04
I mean, we live in a world which is quite collective and which is governed by culture and constraints, which are quite immovable. We think the world's changing very fast, but in many ways the world doesn't change very fast. And then suddenly it does.

02:19:29 Speaker_04
And what usually is behind that is not a huge number of people doing something, it's an individual deciding to do something and managing to persuade other people to do that. So it's unreasonable in the sense that one person has all of that impact.

02:19:44 Speaker_04
Secondly is success that is unexpected and was not predicted when the individual was young or early in their career.

02:19:51 Speaker_04
So it's kind of you know it's success which comes from nowhere thirdly it's success it goes well beyond what the individual skills and performance seem to warrant. Winston Churchill is a jolly good example of that.

02:20:03 Speaker_04
Some would say that the British Prime Minister Boris Johnson is an example of that.

02:20:08 Speaker_04
Completely disastrous foreign secretary, probably completely incompetent in his dealing with the coronavirus, but nevertheless I think may well go down in history as a great Prime Minister because he has certain objectives that he wants to achieve like making sure Britain did leave the European Union and maybe doing something about

02:20:27 Speaker_04
the excessive price of housing in Britain, the fact that it's almost impossible for young people to actually buy a house these days.

02:20:35 Speaker_04
And also, you know, Britain's a hugely over-centralized country, London-centric country, and there are left-behind areas of Britain, which basically is most of the rest that's not in the southeast of Britain.

02:20:49 Speaker_04
And I think Boris Johnson wants to do something about that, and if he's able to do that, that would be a fantastic achievement.

02:20:56 Speaker_04
I know that you're interested in very practical things, so in the book I discuss what do you do if you don't have self-belief. And for example, one of the things that you can do is to realize it has to be in a specific domain or context.

02:21:09 Speaker_04
And so you've got to identify that context where you could really change things. Secondly, find a fantasy mentor. Now this is, I think it's quite an interesting and perhaps original concept.

02:21:20 Speaker_04
I was driven to it by studying Bob Dylan, because here this guy arrived in New York, completely unknown, 19 years old. but with a fantastically high ambition.

02:21:35 Speaker_04
And one of the things which he did was to seek out Woody Guthrie, who was probably the template that he wanted, which was Woody Guthrie had been not only a folk singer, but also a protester really, and also someone who wrote his own songs.

02:21:50 Speaker_04
And in fact, that was very unusual at the time and folk songs were meant to be sort of arose from the folk, not from individuals. And Guthrie actually changed that. He wrote a lot of original songs. And Dylan did too.

02:22:04 Speaker_04
He started writing his own songs, one of which was called The Ode to Woody. And he went to the hospital in New Jersey where Woody Guthrie was suffering from a terrible, terrible disease called Huntington's syndrome. And whether or not

02:22:20 Speaker_04
Guthrie was really aware that Dylan was there. Whether he actually thought Dylan was going to be the new Woody Guthrie is really unclear, but it's curiously irrelevant as well, because Bob Dylan took from that template. That's what he had to do.

02:22:35 Speaker_04
He had to write his own original songs. He had to claim the heritage of Guthrie as something which would perhaps get him some publicity and attention.

02:22:44 Speaker_04
And somehow he managed to get a contract with the, all of the folk labels rejected him, but Columbia Records, which was a blue chip firm, obviously, signed him.

02:22:54 Speaker_04
And then, you know, that gave him confidence and it gave him contacts and it gave him gigs and goodness knows what else. And he was able to produce albums and then he was made. And also, of course, he hijacked, in a sense, the protest movement.

02:23:09 Speaker_04
with songs like Blowing in the Wind, etc, which made him, according to certain people, the voice of the generation. So it's another way to find a fantasy mentor.

02:23:20 Speaker_04
Thirdly, to search for transforming experiences, and I'll say something about that in a minute. And fourthly, to attract well-deserved praise. And I'll say something about one breakthrough achievement also in a moment.

02:23:33 Speaker_04
And then narrow your focus until your work is unique. Some of those are landmarks as well. So the first one being self-belief. The second one is Olympian expectations, that you expect a huge amount from yourself and then from other people.

02:23:50 Speaker_04
And the high priest of high expectations is probably Jeff Bezos, who's always banging on about this. And, you know, really believes everyone in the senior management team has to be an absolute A player, class A player.

02:24:03 Speaker_04
And he says, you know, if you put someone who's not used to high expectations on a high expectations team, they will adapt. But the reverse is also true. If you have people who are not high expectation people, then people's standards will slip.

02:24:19 Speaker_04
And one thing that Bezos has been incredibly good at doing is having the highest possible standards. His mantra is customer service and unbeatable prices, and he's totally inflexible on all that. So the second thing is Olympian expectations.

02:24:34 Speaker_04
The third one, which is particularly interesting because it's really original, I think, and I was thrilled to discover this in my research, is transforming experiences.

02:24:44 Speaker_04
Every single one of these people had actually an experience which transformed them in the sense that they went into the experience as one sort of person, and they came out as another sort of person, or as someone who is a hundred times more powerful or more effective.

02:25:01 Speaker_04
Every single one of them had that experience. And again, to take Bezos as an example of that, before he founded Amazon,

02:25:08 Speaker_04
He was a failed investment banker, age 26, and a headhunter decided to send him as a last resort to see a guy called David Shaw, who had founded a counter-cultural, quantitative investment hedge fund.

02:25:26 Speaker_04
And Shaw realized, before anyone else did by about 1992, that the Internet was going to be huge, and that it could be huge, not just for information and all other things, but for selling things, for retailing.

02:25:42 Speaker_04
So his idea was that his firm, which was called DESCO, D.E. Shaw and Company, should develop a program for selling over the Internet, and then it should start a company to do that. And he put Bezos as the project leader on that, and he and

02:26:01 Speaker_04
Bezos got on very well like a house on fire. They were the same extremely quantitative, extremely nerdy, extremely ambitious sort of people. And between the two of them, they developed the format for Amazon.

02:26:16 Speaker_04
And they decided that the first category that they would go into was books. And they decided that they would allow people to write reviews on the sites, et cetera, et cetera, et cetera. It was Amazon Blueprint as it happened.

02:26:31 Speaker_04
And of course, David Shaw wanted that to happen within Desco. But one day, Bezos went to David and said, I really want to do it myself. And David Shaw took him for a two-hour walk around Central Park, in which he tried to dissuade him.

02:26:47 Speaker_04
But incredibly generously, David Shaw allowed Bezos to go off and found out. He didn't even ask for a share in the company.

02:26:55 Speaker_04
But then that was david shaw he was a very very self confident guy and his phone has been amazingly successful anyway so that was a transforming experience for.

02:27:07 Speaker_04
We talked earlier about bill by transforming experience for him was getting hired by bcg by bruce henderson when he was the completely unqualified.

02:27:17 Speaker_04
who'd never done any business, never done a business degree, didn't understand economics or whatever, a history researcher who managed to get a job as a development officer at Vanderbilt University, where he met Bruce Henderson.

02:27:31 Speaker_04
And Bruce Henderson, who had a tremendous nose for talent, then decided to hire Bill Bain, and Bill Bain took to Boston Consolidated Group, BCG, like a duck to water.

02:27:43 Speaker_04
because he was a very very smart guy and because the power of the concepts the concepts were so great and bill and bruce development together essentially and then bill decided to do the dirty on bruce and leave and form his own.

02:27:58 Speaker_04
We would never have heard of bill byron if it had not been for bruce henderson meeting him and deciding to hire him in the formative experience of working within. BCG.

02:28:08 Speaker_02
Let me ask you a question if I could, Richard, and I imagine you might get to this.

02:28:13 Speaker_02
I'm sure you have an answer for it, but before we move ahead, if someone has not had a transforming experience, one might wonder, if they're listening to this, is it possible to engineer a transforming experience, or do I sit on my hands and wait for Lady Luck to smile upon me?

02:28:32 Speaker_04
Absolutely, that's the whole point. One of the things I say in the book is that the whole point of trying to identify these

02:28:38 Speaker_04
nine landmarks is that the people who actually visited them didn't intend to they didn't actually say i need a transforming experience let's have what happened to them i mean for example the transforming experience of margaret thatcher was having the forkland islands invaded by general gartier of

02:28:58 Speaker_04
Argentina and she said that was the worst moment of her life but it was absolutely the making as it happened of her and the experience of living through that and commanding the armed forces and doing what everyone said was impossible which was recovering the the islands made it possible for her then to do what she really wanted to do which was in her opinion reverse national decline of Britain

02:29:22 Speaker_04
So, yes, the people who had these transforming experiences did not engineer them, but having seen how important it is, understanding that you cannot, in my opinion, admittedly from a relatively small sample, but it's amazing that every single one of these people had a transforming experience, which is described in the book, and I did not fake it.

02:29:45 Speaker_04
I just, you know, I didn't throw anyone out because they hadn't had a transforming experience, and I stuck to the rules. You can then say, well, I better have a transforming experience, haven't I?

02:29:55 Speaker_04
And then you come to the question, well, what is the most likely type of transforming experience which will put me in luck's path in order to then become much more powerful?

02:30:06 Speaker_04
So it could be going to a particular university and studying something which is very arcane and unusual. It could be finding a very high-growth firm like BCG or Boston Consulting Group or D.E. Shaw and Company.

02:30:21 Speaker_04
And then joining that firm when it's still very young, because you won't be on the forefront of developing. You see, the thing about companies in their early days is that they don't know what they're doing.

02:30:34 Speaker_04
And so if you don't know what you're doing, you can be very creative about it. And if you're involved in that process, you discover things that you never knew that you had.

02:30:43 Speaker_04
And not only that, you become identified with them and you become powerful and you become perhaps a large shareholder.

02:30:49 Speaker_04
in the company and it's completely different from joining a company which is on tram lines where basic is not going to do anything radical and anything new it's so exciting to actually be part of the company is growing very fast doesn't really know what it's doing but it's got something.

02:31:06 Speaker_04
Summary knowledge.

02:31:08 Speaker_04
Which actually means that it can be very very successful and it doesn't have to be company could be a social organization it could be a way of thinking it could be anything that's growing very fast and where is unformed and where you think you've got some affinity with it and the ability to contribute and be creative is not easy.

02:31:26 Speaker_04
to specify what someone's transforming experience should be. But I've tried it on a few friends and good acquaintances, and it's amazing that actually we do in the end come up with something which might actually work, in some cases has.

02:31:41 Speaker_02
Before we get to the fourth, I just want to say a few things. The first is that my experience maps very well to a few of the things that you just described in the sense that when I was graduating from college and was suffering from all sorts of

02:31:56 Speaker_02
quarter life crisis existential angst about what to do with my life and I asked a mentor at the time what I should do what type of sector I should go into and his answer was it doesn't matter as long as it's growing very quickly you want to be in something that is

02:32:12 Speaker_02
Growing quickly not in a sector that is in decline or stagnant and that ended up being exceptional advice and i found that it also applies to.

02:32:21 Speaker_02
Where you place yourself that is to say one of the reasons by example that i left san francisco after effectively decade was that i felt like it was a. place experiencing some degree of stagnation or even in decline.

02:32:35 Speaker_02
I moved to Austin, Texas, which was very much a startup of a city. It was rapidly growing, expanding, where it was still taking shape and still could be shaped. I just wanted to reinforce what you said.

02:32:48 Speaker_02
On that point, or I should say, moving on from that point, what is the fourth of the nine landmarks?

02:32:55 Speaker_04
Yes, I mean, growth is everything. I mean, it ties in with the historical principle. The fourth one is one breakthrough achievement. Now, this is different, Tim, from the other eight landmarks in that it is not a how to do it, it's a what to do.

02:33:11 Speaker_04
And in some ways, it's a bit odd of me to put it fourth because it's the culmination of everything else and all the others really lead to this. But I wanted to put it in the book fairly early

02:33:22 Speaker_04
because I wanted people to be thinking about this as they go through, which is what on earth are you going to do to change the world?

02:33:31 Speaker_04
And you're not going to succeed unless it's something really dramatic, or he's not going to succeed in being unreasonably successful. So you need to start thinking about that. It might take you a decade.

02:33:45 Speaker_04
It might take you several decades to actually work out what it is. But it has to be something that you believe needs to be done. It's not a way of making you successful. is a way of changing the world.

02:33:58 Speaker_04
And if you define it in those terms, again, it's surprising you can actually come to some kind of resolution, some kind of opinion.

02:34:06 Speaker_04
And for example, once Lenin had had his transforming experience, which was the hanging of his beloved elder brother that he idolized and adored, because he was implicated in an assassination attempt at the Tsar.

02:34:23 Speaker_04
When he was 16 years old, Lenin heard that his brother had been hanged. Instantly, he decided that his whole purpose in life was to smash the bourgeoisie and to cause revolution in Russia.

02:34:36 Speaker_04
And it was a ridiculous, you know, 16-year-old schoolboy, ridiculous idea. And he wasn't political at all before. He wasn't. He was a very nice sort of, you know, everyone liked him. but he became very bitter and twisted, but also very effective.

02:34:49 Speaker_04
So it's one breakthrough achievement. And it's not two, it's not three, and it's not one every five years. It's something that you do, which it actually is going to in some way change the world.

02:35:02 Speaker_04
I mean, my breakthrough achievement was starting or co-starting LEK.

02:35:07 Speaker_04
It's not on the comparable scale with people in the book but nevertheless it was a very successful firm which gave huge opportunity to hundreds or thousands of young people really who were trained and developed in that way.

02:35:23 Speaker_04
And it also made an impact on the corporate world as well. We invented the idea of mergers and acquisitions strategy consulting, which is completely different from anything that anyone else had done. So one breakthrough achievement is the fourth one.

02:35:36 Speaker_04
The fifth one is make your own trial, which is, you know, basically become bloody minded and work out a way of doing something that goes off path from everyone else. And I describe how to do that.

02:35:50 Speaker_04
The sixth one is to find and drive your personal vehicle again one of the discoveries in the book is everyone of these twenty people had some kind of vehicle which is some ways sometimes it was a concept.

02:36:04 Speaker_04
More often it was an organization of some sort of company if it's in the business there. or an organization more broadly defined if it isn't.

02:36:12 Speaker_04
The British state, for example, was a vehicle for Margaret Thatcher and for Winston Churchill together with a particularly eclectic sense of, you know, what they were trying to do.

02:36:25 Speaker_04
The whole point about a personal vehicle is that the paradox of the individual who actually does manage to change the world is that they can't do it on their own. But on the other hand, it doesn't get averaged.

02:36:38 Speaker_04
It's not sort of a committee deciding what to do. So someone like Jeff Bezos decides to make internet retailing the thing which he does, and the thing that the Everything Store was the name that they gave it originally.

02:36:53 Speaker_04
And not just to be a successful internet retailer within books, but to be a successful retailer on the internet everywhere, and to be totally dominant in doing it. you know, an incredibly ambitious thing.

02:37:06 Speaker_04
But in order to do that, he needed to have an organization which was totally under his control, just the same way that Lenin needed to have the Bolsheviks, you know, a group of people who were totally dedicated to Lenin, not very many of them, but a couple of thousand.

02:37:23 Speaker_04
And that is necessary so that you overcome the inertia that society and culture has So an individual can change things by being very determined about it, but they don't have to do it all themselves. And the choice of the vehicle is terribly important.

02:37:43 Speaker_02
May I ask, just before we move on, are there any particular unusual or unorthodox examples that come to mind for both make your own trail and find and drive your personal vehicle? If you could give perhaps one for each.

02:37:58 Speaker_04
Yes. I mean, your, your own trail is, is very much, I think, Walt Disneyland. I don't mean, I do actually mean Disneyland. The thing about Walt Disney is that he couldn't decide what he wanted to do initially.

02:38:13 Speaker_04
He was a very good actor when he was in high school, and he used to do double acts with a friend of his, which were, you know, garnered a huge amount of praise. And then he decided that he actually wanted to be an artist, but then

02:38:27 Speaker_04
he narrowed that down to being a cartoonist. But his firm, which he started, his studio, which he started in, I think 1923 in Los Angeles, was not very successful for the first few years. The big breakthrough that they came up with was Mickey Mouse.

02:38:44 Speaker_04
Mickey Mouse made all the difference because they gave a ridiculous story about a mouse who wanted to woo a lady mouse by flying a plane. It was a really silly story.

02:38:56 Speaker_04
But what Disney did was not only sort of this film called Plane Crazy, which he turned into a very expensive film, which almost bankrupted him and his brother and various other people.

02:39:07 Speaker_04
But he decided to give voices to the characters from the screen, which people had done before, but never with cartoons. So that was a sort of, you know, his personal trail. In the 1940s, he became disillusioned with

02:39:25 Speaker_04
Disney as a corporation it was a very successful corporation by that stage but nevertheless he was disillusioned with the fact that they were trying to take him away from the studio he didn't have the sort of excitement of doing it he didn't really feel that he was creating something new.

02:39:42 Speaker_04
And so he went in to find his own personal trail. He actually spent quite a bit of time with Salvador Dali, and they created a very surrealist movie, which then the board of Disney turned down, and Walt Disney was outraged by that.

02:40:03 Speaker_04
And he had to tell Salvador that, you know, they did not think that having the board approve it was anything other than a formality.

02:40:12 Speaker_04
But the board said, no, you lost your marbles, you know, as Peters and Waterman would say later, stick to the knitting, etc. They didn't use those words. But that was the That was what they said. That's what they meant.

02:40:24 Speaker_04
And so Walt Disney decided to go off and do something completely and utterly different, which was invent Disneyland. Until then, amusement parks had been the provinces, Disney called them, of hard-faced men who basically were thugs.

02:40:42 Speaker_04
But what he wanted to do was create something which would be a monument to the past, the present, and the future of America. And all that was best in America. Now, you know, the first time I ever went to Disneyland, which was in 1969, I hated it.

02:40:57 Speaker_04
I thought it was too American and too plastic and all the rest of it. But it was a fantastic achievement in the early 1950s and hugely successful commercially. Again, he was making his own trail. The board again refused to invest in this.

02:41:13 Speaker_04
They refused to put up the capital for all the exploratory work, for all the imagination that had to go into it, for building Main Street and the fire station. Abraham Lincoln and all the rest of it.

02:41:27 Speaker_04
They said, no, we're not going to approve this, Walt. And Walt said, well, screw you. In effect, I will fund it myself. And so he sold his houses, he sort of, you know, took second mortgages rather on his houses.

02:41:42 Speaker_04
He sold one of them, took a second mortgage on the first house.

02:41:45 Speaker_04
He found investors who would do this, and eventually, at the last minute, the Disney Corporation decided that they would come on board as well, when they saw it was inevitable and it was going to happen.

02:41:57 Speaker_04
They initially refused to let him use the characters, Snow White and Donald Duck and all the rest of it. They said, no, if you do that, we'll sue you. So, if Disneyland had failed, which was eminently possible, Disney would have been ruined,

02:42:14 Speaker_04
And indeed, the parent corporation might have been in some trouble one way or the other. But that was finding his own trail because he had this vision and he wanted to pursue it. And it was nuts, basically. So that's an example of

02:42:29 Speaker_04
making your own trail, finding and driving your own personal vehicle. Well, I think actually Lenin is a jolly good example of that. It was the Bolsheviks, you know, initially the dissident revolutionaries in exile around about 1900, etc.

02:42:46 Speaker_04
were dominated by people he later called the Mensheviks, by social revolutionists who were not as extreme and uncompromising as Lenin.

02:42:57 Speaker_04
And there was a conference, I think in 1903 or something like that, at which Lenin deliberately antagonized the other people. and said, I want to have my own party. I'm going to split the revolutionaries. And they said, don't do that.

02:43:13 Speaker_04
There aren't very many of us. Please don't do that. But he said, no, I can demonstrate that if I have 1,000 people who are dedicated to me and to my way of doing things, we can have revolution in Russia.

02:43:28 Speaker_04
Now, absurd, because there are hundreds of millions of people in the Russian empire. And how could it be that a thousand people could actually change that and make successful revolution?

02:43:40 Speaker_04
But Lenin had an answer to that, and it was a very good answer, which was, he said, look, Russia's a very backward country. It's an autocracy.

02:43:49 Speaker_04
It's not like Germany or France or Britain, where, you know, there are lots and lots of different centers of power. All of the power is concentrated in the czarist army,

02:43:59 Speaker_04
and the bureaucracy, and there are only about 2,000 people in Russia who actually control things. There are no independent centers of social pluralism. I'm sure he didn't use that word, but, you know, basically it's a very top-down state.

02:44:16 Speaker_04
And if 2,000 people can rule Russia,

02:44:22 Speaker_04
why not us and that was his theory and actually proved to be absolutely correct so his vehicle was splitting the revolutionary movement but having a group of people who are absolutely dedicated to him and got shot if they didn't if they weren't so the vehicle is very very important the vehicle doesn't necessarily have to be very large but it hugely augments

02:44:42 Speaker_04
the power of the individual, but it's not a compromise. The vehicle must be totally the vehicle, in the same way that Bain & Company was Bill Bain's vehicle.

02:44:51 Speaker_04
You know, you stepped out of line with Bill Bain, you didn't get shot, but you certainly got fired, and so on and so forth. Boston Consulting Group was Bruce Henderson's vehicle. He did it a different way.

02:45:01 Speaker_04
It was more, let a thousand flowers bloom, but nevertheless, unless you were interested in developing the concepts, which was Bruce's thing, then you weren't going to succeed. And he got people who were very good at doing it.

02:45:14 Speaker_04
Can I move on to the next three? I'm sorry, I'm probably taking too much time.

02:45:18 Speaker_02
Oh, no, that's totally fine. That's why this conversation is long form. So let's move on to the next one.

02:45:24 Speaker_04
Okay, the seventh one is thrive on setbacks. And this doesn't sound terribly original, but it is terribly important. You remember that Nicholas Nassim Taleb wrote a book called Anti-Fragile, which I think is probably his best book.

02:45:36 Speaker_04
And the thesis behind that, as you know, is that resilience is not the point. You actually have to like setbacks. And the reason that setbacks can be very helpful is two reasons. One is they give you feedback.

02:45:50 Speaker_04
I might tell you that you're on the wrong path and the other thing is that either you're on the wrong path or you've got the wrong tactics and it's quite important to distinguish between those two or that in fact the fact that you've been unsuccessful in a big way

02:46:08 Speaker_04
means that you're going to be very successful in a big way. It's quite difficult to describe. I also think about Winston Churchill and his wonderful failures. He went away from those failures, obviously a bit depressed at times.

02:46:20 Speaker_04
He went and did something completely different for a time.

02:46:24 Speaker_04
getting out of politics after he'd ruined the Gallipoli campaign, the Dardanelles campaign in 1915 and sent, you know, several thousand people to their deaths from a harebrained scheme that he'd invented. And he got out of politics for a time.

02:46:39 Speaker_04
He joined the regular army and he went to the Western Front. In 1929, he was on the verge of bankruptcy as a result of having invested heavily in stops in 1928. And when the crash came along, Wall Street crash, He was almost bankrupt.

02:46:54 Speaker_04
He decided to, and also he was very unpopular with his fellow conservative leaders at that time because he'd made a number of mistakes in 1925 in going on to the gold standard for Britain and in antagonizing the miners leading to the general strike of 1926 and alienating the whole of the organized labor movement.

02:47:15 Speaker_04
So he was unpopular with his party. He was on the verge of bankruptcy. He went off and did a huge lecture tour of America, which was very successful.

02:47:21 Speaker_04
And then he got run over on 5th Avenue by a car and suffered some quite serious injuries, but battered and bruised, he got up and did it again. And you can see from what he writes that he thinks what's happening to him is terribly important.

02:47:35 Speaker_04
And most people would say, no, this is a semi-comical drunk who's basically had a series of failures. You know, Winston Churchill didn't see it that way. Very, very interesting.

02:47:46 Speaker_04
The psychology of not being resilient, but actually really liking failures because they make you seem important in some ways. And then the last two are acquiring unique intuition, which requires deep knowledge.

02:47:58 Speaker_04
And here I think that I overlap a little bit with Malcolm Gladwell. You know, you really do. The quality of intuition is a function of the degree of experience that you've had in a very narrow field, but also your willingness to

02:48:12 Speaker_04
take notice of intuition, which some people do and some people don't. And the last of them is distort reality, which is Steve Jobs's phrase, of course, based on Star Trek.

02:48:22 Speaker_04
But what distort reality means is refusing to accept current reality and redefining a way of making that different.

02:48:31 Speaker_04
And convincing your followers in particular that you know how to get around or distort reality, convincing them that you have a reality distortion field, it works. It's just amazing. And Bruce Henderson did that, Bill Bain did that.

02:48:47 Speaker_04
All the other people in the book had got a way of overcoming what was the incredulity of other people that they could actually really change the world in a major way.

02:48:57 Speaker_02
I would love to make a few observations based on a number of things that you shared. And also, I'm going to follow that by asking you for an example of acquiring unique intuition, because this is of great interest to me.

02:49:10 Speaker_02
But I want to mention, one, a piece of trivia for people that ties into a name that came up several times, Jeff Bezos. thriving on setbacks, although he didn't come up in that particular landmark description.

02:49:24 Speaker_02
If you go to relentless.com, it will forward to where? To amazon.com. So relentless.com is one of the first domain names.

02:49:34 Speaker_02
pointed to that website and what strikes me is that many of these landmarks are reinforcing for one another right so you have let's just say self-belief Olympian expectations and I'm going to group them in a very deliberate way self-belief Olympian expectations

02:49:53 Speaker_02
One breakthrough achievement, make your own trail, find and drive a personal vehicle, thrive on setbacks, and let's take distort reality because I'm not yet familiar enough with the acquire unique intuition, but all of those to some degree seem to be enormously enabled when you have

02:50:10 Speaker_02
a longer term vision and horizon in mind than your possible competition. So if you look at Jeff Bezos, right, he is one of the few examples of chief executive officers who have been given a pass by Wall Street.

02:50:26 Speaker_02
I mean, he's convinced his investors, if you go back and read his annual letters, which I encourage everyone to do, you can find a PDF of all past Amazon annual letters, there was always an emphasis on long,

02:50:37 Speaker_02
term time horizon longer term than a quarter longer term than a year always longer term bob eiger disney is another great example of this toby let's give shopify is another incredible example of this and it just strikes me that this longer term vision and time horizon enables a lot of these and without that

02:50:57 Speaker_02
if you are in any sense feeling compelled to rush that you disable some of these landmarks. That's just something that came to mind as you were describing.

02:51:07 Speaker_04
I couldn't agree more. I mean, that's absolutely true. You need a long time horizon. You need to expect that you're going to have massive impact, but it might take a very long time.

02:51:15 Speaker_04
But you need to be sure about what you're trying to do, and you need to be sure that you'll get there. But, you know, time is kind of, you know, there's lots of time.

02:51:25 Speaker_02
Yeah. So acquiring unique intuition. Could you perhaps give us an example of that that you like? And if there's one outside of Steve Jobs, that'd be great, but you could use Steve Jobs if you like.

02:51:35 Speaker_04
I think Jobs is a great illustration of that, but I'll take Nelson Mandela as my example on this. Nelson Mandela was a leading member of the ANC who got caught and convicted and sent off to prison.

02:51:51 Speaker_04
Total of, I think, 19 years in prison, a life sentence, actually. He was quite lucky to escape the noose, and we were very lucky that he did. He was on this island called Robin Island, which I visited off Cape Town.

02:52:07 Speaker_04
It's a short boat ride away from Cape Town, maybe half an hour at most, but it's a world away. And it's a nasty, horrible, stark, it's basically, it's a scrapyard, essentially. I mean, it's got rocks, a lot of rocks, and that's it.

02:52:22 Speaker_04
I visited the cell in which he'd been incarcerated. And it's so small, you wonder how he could possibly have kept his self-respect. But during that period of time, something very interesting happened. The leaders of South Africa, including P.W.

02:52:40 Speaker_04
Botha, who was reckoned to be the great crocodile, sort of, you know, very, very hostile to change, actually realized that they'd painted themselves into a corner and that they didn't want to have

02:52:55 Speaker_04
the possibility of bloody revolution and being driven into the sea, as they saw it, by the population of South Africa. And the whites were, you know, maybe 5 million people against 50 million plus who were blacks, broadly defined.

02:53:12 Speaker_04
And the ANC were ratcheting up violence and the ANC were controlled by Oliver Tambo in Lusaka, some distance away. And here was this Nelson Mandela guy, and he was When he was in prison on Robben Island, some interesting things happened.

02:53:32 Speaker_04
One is that he acquired the charisma of the sort of, you know, prison hero, so that within the ANC he was viewed as the natural leader.

02:53:41 Speaker_04
Another interesting thing which has happened was that there were various outside forces, including the British Commonwealth, that in the 1980s sent people

02:53:51 Speaker_04
to robin island to talk to mandela and try and see whether you know there was any route forward there because they couldn't speak to the guys in exile in lusaka or wherever they were and those guys were totally uncompromising and we're trying to cause civil war.

02:54:10 Speaker_04
and they wouldn't have got anywhere.

02:54:12 Speaker_04
And so there were a group of people who went, there was a group from the Commonwealth called the Eminent Persons Group, very self-deprecating, and these eminent people went and of course they talked to Nelson Mandela because he was recognised to be almost the shop steward of the prisoners.

02:54:30 Speaker_04
and he formed a sort of university there where they, you know, basically developed knowledge of this, that and the other. And somehow, Nelson got the intuition that these people actually wanted a deal.

02:54:43 Speaker_04
They didn't want this to be continued forever, and they were willing to compromise in some way. The hardline nationalists who were nasty, horrible racists

02:54:52 Speaker_04
do apartheid and they shot people and they were extremely unpleasant there's no doubt about it these people actually wanted a solution and he was the first person to realize that, the ANC had always said and Nelson Mandela had always said we will not compromise but when he met some of these people from the commonwealth and when he met later some of the senior ministers from the government of the nationalist party ruling party,

02:55:17 Speaker_04
he suddenly realized that a deal was possible. And he said to them, you know, if you really want to deal, you're going to have to have one person, one vote. And they said, we couldn't possibly have that democracy. No, we don't want democracy.

02:55:32 Speaker_04
There are more blacks than whites. We can't possibly do that. But you know, Nelson stuck to that. And eventually, he formed personal relationships

02:55:42 Speaker_04
with the head of the secret service, the secret police as it were, with the minister who was responsible for justice, with the minister who was responsible for state security, including the prisons, and eventually with P. W. Botha himself.

02:55:59 Speaker_04
And it was all based on this intuition that perhaps they could reach a deal. And nobody else had that intuition. Nobody but Nelson Mandela actually thought it was worthwhile pursuing talks with those people. And it took five years.

02:56:14 Speaker_04
But in the end, his intuition won out.

02:56:16 Speaker_04
And the result was that instead of having a war and bloodshed going on, and possible revolution, and the only question for people really was whether that would be five years or 50 years before the whites would be thrown out and massacred.

02:56:34 Speaker_04
Instead of that, you might have a transition to black majority rule, And that could be done in a controlled way where F.W. de Klerk, who succeeded Boater, would be the vice president and effectively the mentor of Nelson Mandela.

02:56:50 Speaker_04
I've talked personally to F.W. de Klerk about these days. For some reason I had an opportunity to do that. And, you know, he was quite clear about it. If it had not have been for Mandela, and of course he said himself,

02:57:04 Speaker_04
the odds against this would be a thousand. It was just based on this intuition that there might be a solution where everyone else thought there wouldn't be a solution.

02:57:11 Speaker_04
And he would not have known that, but for being in prison on Robben Island for 17 years and meeting all these people and gradually being able to size them up, including the heads of the prison who varied in quality from unpleasant to brutal.

02:57:28 Speaker_04
but nevertheless he worked out the way the wind was going and nobody else did as i was working in south africa at the time and we never thought that there was a possibility of any solution nobody but i talked to did.

02:57:41 Speaker_04
Nelson mandela had a different intuition i described that in the book and it's very very. It's very heartwarming. There's some horrible stories in the book, but it's very heartwarming. Intuition is hugely important.

02:57:52 Speaker_02
Thank you for sharing that example. I think it's a wonderful place to start to wrap up this round one. We may have to do a round two on the podcast if you have the endurance sometime.

02:58:03 Speaker_04
I would love to do that. I would love to do that.

02:58:05 Speaker_02
But Richard, I want to ensure that people know where they can find you. Of course, on Twitter, they can find you at richardkosch8020, 8020, richardkosch.net. You've written many books, including many books that have influenced me, like the 8020

02:58:24 Speaker_02
You have the star principle which we've mentioned a number of times in your newest book is unreasonable success and how to achieve it.

02:58:31 Speaker_02
I have just one more question for you and then certainly I'm open to any closing comments or anything else that you would like to share if I've omitted anything certainly or if there's just anything in addition that you'd like to

02:58:44 Speaker_02
I'll start this question with a quote as prelude, and this is from an interview that I found with you, and it relates to New Year's resolutions. This is a quote, which you can of course feel free to correct, but this is attributed to you.

02:58:59 Speaker_02
Once a year, rather than doing New Year's resolutions, I ask the same question. What did I do that meant the most to me and my family and friends and sometimes strangers too? And what could I do in the next year?

02:59:11 Speaker_02
More of the same is not a bad answer, but something fresh too. So this really struck me as an impactful question. good questions are impactful. So A, is this something that you do and might recommend?

02:59:28 Speaker_02
And number two, are there any other questions you might suggest listeners consider or ponder, let gestate on their minds?

02:59:39 Speaker_04
Yes, it is true. And I think it's right. The question I would ask is one, again, from the book, which is, in your whole life, what is your breakthrough achievement going to be? If you want to change the world, how do you want to change the world?

02:59:54 Speaker_04
And ponder that maybe on New Year's Eve, maybe any other time. There's plenty of time to work it out. But do you really want to have a major impact on the world if you do? What? That's really my question. It's a question I ask myself as well.

03:00:10 Speaker_04
I mean, my own ambition is to have many more creative, completely unreasonably successful people. And the thing I'm toying with

03:00:21 Speaker_04
which I don't know if you think it's a good idea or not, is offering to work with a number of people who have already been reasonably successful, but have not been unreasonably successful, and take them through the process and see whether we can generate some unreasonable success from a lot of people, and to cascade that down and train other people to do that, because I think this methodology is

03:00:46 Speaker_02
robust and i think it could make a huge difference to the world and i'd like to see whether i can demonstrate that in practice through a few pilot studies so that's my personal ambition i love that i think you should definitely test it and it could be a spectacular failure or spectacular success but nothing ventured nothing gained and you do like to bet so i figure this is

03:01:08 Speaker_02
is one good opportunity to do that. And having some experience with vetting, I'm not volunteering myself, but I would say run a competition or have applications that are vetted and can be vetted in some very simple ways that you're not overwhelmed.

03:01:22 Speaker_02
And pick a handful of finalists to take through that process. And what I'll suggest just as a placeholder is that people follow you on Twitter, Richard Koch

03:01:33 Speaker_02
8020 8020 and if you decide to do this you can share that on Twitter and that can be at least a possible starting point so that people are alert that this is a possibility. What a pleasure it's been, Richard.

03:01:47 Speaker_02
I feel like I know you in the same way that perhaps some people I meet who listen to the podcast feel like they know me, but it's been through your written words that I have come to admire and use, quite frankly, with great effect, much of your thinking.

03:02:05 Speaker_02
So I thank you very much for taking the time today. This has been an incredible, incredible pleasure, and I hope it's not the last.

03:02:13 Speaker_04
Indeed. Tim, thank you very much indeed. I reciprocate. Much more pleasure for me, I'm sure. It really is great. Anyway, thank you very much indeed, and I look forward to talking to you again at some stage. Maybe a bit more frequently.

03:02:28 Speaker_04
That would be wonderful.

03:02:31 Speaker_02
The feeling is definitely mutual.

03:02:33 Speaker_02
And to those listening, I will have show notes for everything we've discussed, including all of the books, all of the resources, including the most recent work from Richard, which is Unreasonable Success and How to Achieve It at tim.blog.com forward slash podcast.

03:02:50 Speaker_02
We'll have links to all the names, everything you can imagine. So please do Check that out if you'd like to indulge in more exploration. And until next time, as always, thank you for tuning in. Hey guys, this is Tim again.

03:03:03 Speaker_02
Just one more thing before you take off, and that is Five Bullet Friday. Would you enjoy getting a short email from me every Friday that provides a little fun before the weekend?

03:03:13 Speaker_02
Between one and a half and two million people subscribe to my free newsletter, my super short newsletter called Five Bullet Friday. Easy to sign up, easy to cancel.

03:03:22 Speaker_02
It is basically a half page that I send out every Friday to share the coolest things I've found or discovered. or have started exploring over that week. It's kind of like my diary of cool things.

03:03:33 Speaker_02
It often includes articles I'm reading, books I'm reading, albums perhaps, gadgets, gizmos, all sorts of tech tricks and so on that get sent to me by my friends, including a lot of podcast guests.

03:03:45 Speaker_02
And these strange esoteric things end up in my field, and then I test them, and then I share them with you. So, if that sounds fun, again, it's very short, a little tiny bite of goodness before you head off for the weekend, something to think about.

03:03:59 Speaker_02
If you'd like to try it out, just go to tim.blog slash friday, type that into your browser, tim.blog slash friday, drop in your email and you'll get the very next one. Thanks for listening. This episode is brought to you by 8Sleep.

03:04:14 Speaker_02
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