The Star Principle: How it can make you rich Paperback – 4 Mar 2010
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Since Koch has been about equally successful as an entrepreneur and investor and as a business author, he is someone worth listening to (Roger Trapp, INDEPENDENT)
WARNING: This book can make you seriously rich!See all Product Description
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Top Customer Reviews
It's written more as a biography with a wealth of business and investment experience, insights and advice rather than a step by step 'how to' styled or overly formula laden, dry business book. Although this format from successful entrepreneur types can get a little tiresome, this one keeps its head above water by not being too indulgent in his ego, in fact it's probably the opposite. He discusses his mistakes with as much insight as his successes, and the lessons he learnt from both.
Through the different chapters he enlightens the reader more and more through his case studies in his own career, brands such as Betfair, Belgo's, FiloFax, Plymouth Gin and others, so you get a clear idea that all of his statements aren't just abstract philosophies or impressions but a principle he's tested and seen succeed.
So what is the Star Principle? It's really the 80/20 of investing. The 80/20 in it's essence states that 80% of outputs come from only 20% of inputs. Here Richard Koch believes he's isolated the small number of inputs and factors necessary to produce a star business; a business which is top performer in a rapidly growing niche. It's quite simple, but it is insightful.Read more ›
Most Helpful Customer Reviews on Amazon.com (beta)
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.
I was skeptical about buying this as I don't (yet) have $1m to invest in buying businesses, which is what I though this book was mainly about.
In fact it's a VERY practical guide to help you examine the strategy of your current small (very small) business & re-work it to give you a much much greater chance of creating a 'star' business
A star has 2 attributes:
- it's leader in it's niche
- the nichee is growing fast
But for the 99% of us who don't already own that business, Koch gives an excellent & detailed guide how to go about repositioning an existing business to meet these criteria
If you're writing a strategic plan - you need to read this
If you're running a small business with lots of competitors - read this
& if you've got the cash to invest in a small business, this is an excellent guide to help with the big picture due dilligence (not the detailed stuff)
and the icing on the cake is the detailed descriptions that Koch gives about his own experiences (good & bad), investments, disasters.
He walks his talk. Anyone worth $100m isn't writing a book to make money on the sale - it's because they want to help. And that's a good enough reason for me to read it!
In The Star Principle Richard blows the lid on what can only be called a phenomenon - that of a Star business. What is a Star business? An example will illustrate:
A woman called Sara Blakely owns a Star business called Spankx (this is my own example and not from the book.) Quoted from Entrepreneur Magazine: "Blakely founded Spanx in 2000 to solve a simple problem: She wanted the body-slimming effect of a pair of control-top pantyhose but without the feet. Her clever invention quickly became a global phenomenon. Today the Spanx brand houses over 200 products sold in more than 50 countries, according to the company, and she remains the sole owner."
How clever was her invention? She is a billionaire (yes, with a "b") http://www.forbes.com/profile/sara-blakely/
A star business is a) in a fast growing niche (and the Star often invents the niche) and b) is the market leader in the niche. A star business grows at amazing speed, and creates untold wealth for it's owners and share-holders. Apple Computers, Google, Coca Cola, and more recently Facebook, Groupon, Spankx, and virtually all big, well known companies you can think of, are, or were once, Stars.
The reason I say Richard "blew the lid" on a wealth creation secret is because I have never seen this approach before. But the more time I spend on it, and look at Star businesses, the more this approach makes total sense.
While I have just read the book and haven't yet had the opportunity to implement the ideas to my own life, I have 100% confidence that it will help me significantly improve my wealth, and I will have a boat load of fun in the process. Richard also helps one understand how to benefit from this idea as an entrepreneur who wants to start a business, an investor or venture capitalist who wants to back a winning horse, or even as an employee who is looking for an exciting workplace where earning equity shares in a company that will be very valuable one day is a real possibility. So the book caters for anyone really.
How relevant is all this to you? I guess that depends if you want to get rich or not.