The Pareto Principle

The Pareto principle, also known as the 80/20 rule, states that almost in any aspect of life, roughly 80% of results come from 20% of effort. This principle is often applied in business and economics to describe the distribution of wealth and income, where a small percentage of people or organizations control a large percentage of resources. It is also used to describe other phenomena, such as the distribution of customers or the distribution of defects in manufacturing.

Here are a few examples of how the Pareto principle can be observed in various fields:

1. Business: 80% of a company’s sales often come from 20% of its customers.
2. Economics: 80% of a country’s wealth is often held by 20% of its population.
3. Quality control: 80% of defects in a manufacturing process often come from 20% of the production process or a specific step in it.
4. Software development: 80% of a software’s usage often comes from 20% of its features.
5. Project management: 80% of the project’s results often come from 20% of the work.
6. Time management: 80% of an individual’s productivity often comes from 20% of their time.
7. Marketing: 80% of a website’s traffic often comes from 20% of its pages.
8. Sports: 80% of a team’s points often come from 20% of its players.

It’s worth to note that the Pareto principle is not always applicable and the ratios might not be always 80/20. The principle is a general rule of thumb, and the ratio can be different in different scenarios.

You can use this law to figure out which 20% of your efforts drive the maximum results for you and use that knowledge to double down on similar efforts.