Billionaire Reveals The 41 Principles That Built a $125B Empire | Chase Koch

Chase Koch (0:00)

And so if you look at Koch, like macro, high level, one of the largest private companies in the country, today we touch the majority of the economy, as I mentioned, and operate in about 60 countries, 145,000 employees and growing. I would say the biggest differentiator of Koch and why we've been able to grow now over 10,000X since the early 60s is because...

Anthony Pompliano (0:29)

Ladies and gentlemen, we have a very special treat today. I'm going to sit down with Chase Koch. He's a member of the Koch family, which owns Koch Industries. They're one of the largest private companies in America.

Chase recently wrote a book with his father, Charles. It's called Becoming a Principle-Driven Leader, 41 Principles to Build an Enduring Business. In this conversation, Chase and I go through, what is it like to build Koch Industries? How do they apply these 41 principles? What exactly can you use these principles to transform your life, your business and broader society? This conversation is fascinating because it takes us behind the scenes. We understand not only the business deals that they've done, the failures that they've had, but also how they apply these principles in their business, in their investments and into technology. I think that you're going to take away a lot from this conversation. It's one of my favorite conversations I've had on the podcast in a very long time. Chase is an incredible person and it's very fun hanging out with him.

Here's my conversation with Chase Koch. Chase, I thought a great place to start is Koch Disruptive Technologies. I think it's kind of been your baby inside of the organization and really to me is a microcosm of so much of the principles that has made this business amazing. What was the original idea for creating this Disruptive Technology Group?

Chase Koch (1:38)

Well, the original idea, we had dabbled in venture capital back in the early 2000s, but we went away from it. But this was 2016, 2017, and it started with where my passion was, really.

And I've always been kind of cut out of this cloth of innovation and this principle that we actually talk about in our book called Creative Destruction, which is Joseph Schumpeter's principle of, you've got to disrupt yourself from within, otherwise the market will do it to you and you'll become a dinosaur. And since I was a little kid, I always wanted to be working on the next thing, the next curve, not like what was right in front of me. And I've been working in the operating businesses since I was 15 years old. And so, again, back 2016, 17, this is when technology really started taking off and reshaping industries. And I was in our ag business at the time, in our fertilizer business. And I saw an opportunity to, well, first of all, I saw what technology was doing to our value chain. And there were two companies and two founders that really kind of rocked me back. And I was like, something is happening to ag, and we need to be paying attention. So we need to understand the creative destruction that's happening in our industry. One was Climate Corp, which was David Friedberg, who ended up really looking at data science for the first time in agriculture and looking at weather data, looking at soil data.

And he built a company around that and sold data analytics to farmers. And I remember having a relationship with him because we were working on actually swapping data. I was working on enhanced efficiency fertilizers and the uptake of nitrogen for farmers and how to optimize that so they could do more with less. And he was all the data science behind it. So we started working on doing data exchanges to help each other. And then he calls me one day and says, actually Monsanto just bought the company. I was like, you're just getting started. You got like 10 to 20 million of revenue.

And he said, yeah, but they paid me $1.1 billion for it. And that was like the first shot across the bow, I think, in technology and agriculture. And that just woke me up.

Anthony Pompliano (4:03)

Because you were like, that's crazy. They paid so much money for our company.

Chase Koch (4:06)

I think it was that, but also just the wake up of the value that was being created with data science.

And we hadn't really been focused on that. And so that one, and then another friend of mine, Amal Deshpande, that created Farmers Business Network, which was basically a model of the Amazon of agriculture, and being able to go direct to farmer, and some of the services that he was providing, I thought was really, really interesting. And he could only do that because of the technology, where the technology was going to enable that business model. So I just basically went to the team and went to Koch Leadership and said, we have to be a part of these companies. Because that is gonna enable us to see what is gonna disrupt our core business with our nitrogen production assets and our global trading business.