July 4, 2024 • 3hr 8min
#752: Terry Crews and Richard Koch
The Tim Ferriss Show
Key Takeaways
- Terry Crews overcame a difficult upbringing in Flint, Michigan during the crack epidemic and auto industry decline by pursuing art and football
- An art teacher recognized Crews' talent and helped him get a scholarship to study art, which boosted his confidence
- Crews learned to "take his shot" and go for opportunities after missing a game-winning shot in high school basketball
- Crews confronted his abusive father twice - once violently which left him feeling empty, and later with forgiveness which led to healing
- Crews' favorite quote is "God will not have his work made manifest by cowards" by Ralph Waldo Emerson
- Richard Koch developed the 80/20 principle after discovering Pareto's work while studying at Oxford
- Koch was fired from Boston Consulting Group but used that experience to join Bain & Company and later start his own successful firm
- The "star principle" of investing in market-leading companies in high-growth niches has been key to Koch's success
- Koch identified 9 key traits of "unreasonably successful" people who changed the world, like self-belief, transformative experiences, and distorting reality
Introduction
This episode features segments from two previous interviews - one with actor Terry Crews and one with investor/author Richard Koch. It was released to celebrate the podcast's 10-year anniversary and reaching 1 billion downloads. The conversations cover Crews' journey from a difficult childhood to Hollywood success, and Koch's development of principles like the 80/20 rule that have guided his investing and writing career.
Topics Discussed
Terry Crews' Background in Art (06:15)
Terry Crews discusses his background in art, which provided an escape from the challenges of growing up in Flint, Michigan during the crack epidemic and auto industry decline:
- An art teacher recognized Crews' talent and helped him get a scholarship to Interlochen Arts Academy
- This experience boosted Crews' confidence when his artwork was selected as the best
- Crews later got an art scholarship to Western Michigan University and walked onto the football team
- He would paint portraits for other football players to earn money in college
"I remember just saying, okay, I'm gonna do this art thing. But I had to do the football thing, too, and these were my ways out." - Terry Crews
Learning from Failure (15:35)
Crews shares a formative experience from high school basketball that taught him an important lesson:
- In a championship game, Crews missed a potential game-winning layup at the buzzer
- He was devastated and blamed by teammates and coaches
- After reflecting, he realized the importance of taking your shot when you have the opportunity
- This lesson of going for it, even if you might fail, has guided his career since
"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." - Terry Crews
Confronting an Abusive Father (22:40)
Crews discusses two very different confrontations with his abusive father:
- As an adult, Crews violently beat his father after he hit Crews' mother, but felt empty afterwards
- Years later, Crews approached his father with forgiveness, which led to a emotional breakthrough
- The second approach of using "strength for good" was much more healing and transformative
"I said, man, I have to use my strength for good because everybody can knock somebody out. But to give a hug with muscles, there's a whole nother matter." - Terry Crews
Overcoming Imposter Syndrome (34:20)
Crews shares how he dealt with imposter syndrome on his first major film set with Arnold Schwarzenegger:
- He initially froze up, feeling like a fraud who didn't belong
- Crews gave himself a pep talk, reminding himself of his NFL experience
- He pushed through the fear and ended up impressing Schwarzenegger
- Crews learned to always feel the fear but push forward anyway
"I've 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. No, if they that good, they don't care." - Terry Crews
Richard Koch's Background (39:40)
Richard Koch provides some background on his early career experiences:
- He discovered Pareto's 80/20 principle while studying at Oxford and used it to efficiently prepare for exams
- Koch was fired from Boston Consulting Group for not being analytical enough
- He then joined Bain & Company where his skills were better appreciated
- These experiences shaped his later investing approach and writing on business principles
The Star Principle (50:17)
Koch explains his "star principle" for investing:
- Invest only in companies that are the market leader in a high-growth niche
- This allows for outsized returns even without deep industry knowledge
- Koch used this to invest successfully in Betfair despite not understanding the product
- The principle comes from the Boston Consulting Group's growth-share matrix
"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, and I think I'm the only investor of the world at my scale, but doesn't employ anyone." - Richard Koch
Business Segmentation (1:03:41)
Koch discusses the importance of business segmentation:
- Companies need to define their market in a unique way to become the leader
- Betfair created a new segment as a betting exchange, separate from traditional bookmakers
- Successful companies either have a major cost/price advantage or offer something uniquely attractive
- Apple created new segments with products like the iPod and iPhone
Unreasonable Success (1:37:00)
Koch outlines his concept of "unreasonable success" from his latest book:
- He studied 20 world-changing individuals to identify common traits
- Unreasonable success is unexpected, goes beyond skills/performance, and changes the world
- He identified 9 key "landmarks" shared by these highly successful people
- These include self-belief, transformative experiences, making your own trail, and distorting reality
"Unreasonable success is unexpected and was not predicted when the individual was young or early in their career. So it's kind of its success which comes from nowhere." - Richard Koch
Acquiring Unique Intuition (2:51:25)
Koch gives the example of Nelson Mandela to illustrate acquiring unique intuition:
- During his long imprisonment, Mandela gained insight into the apartheid government
- He intuited that some leaders actually wanted a peaceful solution
- This allowed Mandela to negotiate a transition to democracy when others thought it impossible
- His unique perspective came from years of interactions in prison
"Nelson Mandela had a different intuition. I described that in the book and it's very, very. It's very heartwarming." - Richard Koch
Conclusion
This episode provided insights from two very different but highly successful individuals. Terry Crews shared how he overcame a difficult upbringing through art and athletics, learning to push through fear and forgive. Richard Koch explained how he developed principles like the 80/20 rule and star principle to guide his investing and writing career. Both emphasized the importance of self-belief, seizing opportunities, and developing unique perspectives to achieve outsized success. Their stories demonstrate how setbacks and unconventional paths can lead to breakthrough achievements when combined with the right mindset and principles.