The Star Principle

I bought this book with a baseline knowledge about business. The book is engaging, interesting and filled with easy to access knowledge. There’s a reason it is such a popular book. Highly recommend!

When I visited Richard Koch at this home in Portugal, I told him he should take this book off the market, buy up all the used copies and re-package it for $20,000. Why? Because it explains the essence of the strategy that grew his wealth from $2 million to $200 million in less than 20 years.Essentially, this book says “Why do I bat 50% when most Venture Capitalists bat 5%? The secret is the Star Principle.” Only bet on #1 players, and only play in markets that are growing at 10% per year or more. Disqualify everything else. And if you’re not the #1 player, redefine the market so you ARE the #1 player.Now of course Richard goes into much greater detail than that, but that’s the gist of it. I realized when I read it, that all the major home runs I've hit in my career did in fact follow that formula. I’d just never articulated it as well or as clearly as Richard had.As a marketer, this has added a tremendous context and focus to my approach to Unique Selling Proposition, or USP. I think we do a very good job with USP but this added another level of specificity. What space should you choose to be unique in? Is that space growing? How is it defined? What language has the market chosen to describe it and how should you alter that language? How can you adjust your USP by 10% to fit Richard’s formula, so you have a First Mover Advantage wherever you go?This is to say, you don’t have to necessarily be an equity investor or even “have money” to benefit from this. This book is about ANY business situation where you decide where to drive your stake in the ground. It’s just as applicable to a bootstrap entrepreneur as it is to an investor with a few million dollars in his pocket.You might read this book and conclude you're in the wrong industry, niche or profession. Better to figure that out now, not later.I was kicking myself for not having read this book five years ago - a friend of mine had sent it to me quite some time ago. But now that I have it under my belt, it has transformed my understanding of where to focus my finite energy. Some of us marketers are so good we can move ourselves or a client from #5 to #1. Yes, it can be done. But the odds are against you. There are easier ways.What happens if you take the same amount of energy and you focus it on transforming a “#1 by small margin” to “#1 by HUGE margin”? That’s where fortunes are made.I love the elegance and simplicity. I also appreciate the fact that Richard is willing to even write books like this in the first place. Most players at his level are not in the book writing business and it might arguably be in their interest to keep that wisdom to themselves. Thanks Richard for a truly and genuinely game-changing book.

What if you could be a fly on the wall of a successful business consultant who had consistently out-batted other consultants. What is it about how they think that meant that they could *know* with a strong sense of confidence whether a project would work or not? That is what this book gives you.This book is simple enough for anyone to understand, but has all the elements required to make it useful for the serious student looking to make their venture successful.It is put together like a template to help you first learn how to spot star ventures and then know which of your alternatives are most likely to work. If you realise your plan is shaky, it helps you detect if you can tweak your plan to make it more likely to succeed.The chapters are thoughtfully ordered in the steps you go through to compile your strategy, and peppered with real life examples to help round out your understanding.Another thing I like about this approach, is the fact that it does not just apply to big scale investing in companies (where the author made his money), but also can be applied in many other areas of your life beyond investing (i.e. it is Fractal): Are you looking to start your own company? - Are you developing new products or services for an existing operation? Are you looking for a department or company to work for? In all cases this book can help you. For example, Richard underlines many benefits of just finding and working in a Star company that had not occurred to me.My only criticism is the choice of title; With so many get rich quick fads/products, the use of the phrase "How it Can Make You Rich" in the title may put some people off. It may lead you mistakenly to believe that you need some kind of special skills to make the information inside work. It does not, but it does require you to look at situations differently.This book is almost certainly going to become required reading on business school reading lists, as it gives you the 20% of strategy you need to know without filling your head with a bunch of other needless analysis tools.I do not understand why more people are not raving about it already.P.S. when reading the kindle version on a laptop computer (using http://read.amazon.com), some of the bulleted lists the text is a bit small, however this is a small formatting issue which may have been corrected by the time you read this. The same issue is *not* present when using a kindle on a tablet or phone.

I've read dozens and dozens of business book and have a masters degree in management. This is by far the best business book I've read.If I were to list the top 5 books, the other 4 would be2nd 7 Habits of Highly Effective People by Stephen R. Covey.3rd equal Unlimited Power by Tony Robbins and Maximum Achievement by Brian Tracy5th Billionaire in Training by Brad SugarsThis book led me to a stock that grew 15x in less than two and a half years.Are you tired of the grind and believing that the way to double your results is to double your working hours? In this book Richard Koch teaches a different path, an easier but much more fruitful path. For the self employed after reading the Star Principle I also strongly recommend reading 80/20 Sales and Marketing: The definitive guide to working less and making more by Perry Marshall.I see some reviewers try to list the Star Principle by outlying two key points from the book. If you think knowing those two points negates the need to read this book then you will be shortchanging yourself, your spouse and your children. For a primer about "The Star Principle" see this interview with the author in youtube https://www.youtube.com/watch?v=wCPH045f9-I.This book is gold, don't dally around, add this book to your cart right now and change your career, business and/or investment results. And therefore have more time and better quality time with your family as a result, which are life's true riches, aren't they?

In 1970, the Boston Consulting Group publicised a two-by-two matrix that became very famous in the business world and is known as the Growth-Share matrix.Based on ratings on high and low across two dimensions, market growth rate and market share of a particular firm, it creates four categorisations:1) High-high = Star2) High share - low growth = Cash Cow3) Low share - high growth = Question mark or problem child4) Low - low = DogThis book takes a detailed look at what it takes to find a star business to work in, to invest in or to own and how it can lead to exciting times and LOTS of money.The Growth Share Matrix was originally developed to guide top down centralised planning of business units within groups. As such, it quickly became discredited because it glossed over too many issues. However I agree with the author, as a tool for looking at individual businesses, especially before you get involved, it's very useful.The issues lie in how confident you can be about:1) Looking into the future to correctly determine long term growth prospects. The compounding effects over say 10 years make a huge difference if growth is 30% per annum compared to 10%. (A million turnover business that grows at 10% reaches £2.59 million at the end, but if it grows at 30%, it reaches £13.8 million in the 10 years).2) Whether market share leadership can be maintained many years into the future. One problem is that the faster the market niche grows and the bigger it gets, the more likely it is to gain the attention of big firms with deep pockets.There aren't many star businesses like Google and Amazon that go from strength to strength. Often high early growth can tail off as the market matures and the business drifts into the Cash Cow category. There can still be a very good business but, if you're investing late in the process, it won't justify sky-high price-earnings (P/E) ratios over the long term and while profits continue to increase, the share price may reduce as the P/E multiple reduces.As an investment philosophy therefore, great care needs to be taken to avoid being sucked into a value trap.I find myself in two minds about the approach depending on which of my two main hats I wear.As a business coach to small businesses, I think it's a terrific book for helping you to think about starting in a particular niche or whether you should continue with a struggling business.As an investor, I have a personal bias towards value investing in profitable, cash positive businesses that are under-valued by the market. These will normally be cash cows and even dogs rather than stars. Question marks are even more speculative and risky. Big money can be made moving one into the Star category by gaining market leadership but it's a big gamble, especially looking in from the outside where you can be manipulated by hype. I therefore worry that this book can tempt you into making investment decisions that are based more on hope than reality.Paul Simister, a business coach who helps business owners who are stuck, get unstuck.

Richard Koch was worth over a quarter of a billion dollars a few years ago, and is undoubtedly worth more now - so obviously he didn't write this "How to get rich" book to get rich. This shares his simple formula for deciding where to invest his own time and money - and shows how it has worked to make him (and several other people too) very rich. At about 10 times the success rate of other venture capitalists, Koch is giving the formula for his success away for a few dollars and a few hours of your time. Koch believes that you or I can use his formula to get rich too. Or at the very least to make our own success much more likely, and require a lot less effort - even as an employee.If your business is not in a market that is growing at more than 10% per year, and if you are not the market leader, then you are probably in the wrong business and are working much harder than your leading competitor(s) to get smaller returns. Read this book to find out how to swim with the tide instead of against it, and how to fix your business if you cannot leave it.Whether you are an investor, entrepreneur, or employee, this book will open your eyes. Once you read it you cannot go back to fooling yourself that "great idea" will succeed, unless it fits Koch's criteria for a star business.

I like Richard Koch. He writes books that tell you what's possible without going into too much detail about what you should actually do.He's an enjoyable read though

This is not your ordinary business book. It dispels a lot of myths about how to create a successful star business

What a refreshing read. I wish I had read this book years ago. It's all in the stars. Please excuse as I go create my star!