4 ms·

Could the 80/20 principle be wrong?

8 points by danielodio 17y ago

est 17y ago
I am surprised people would even take it seriously. Rational speaking, half of the law/principle out there are stated as-is without any warranties.
diziet 17y ago
Daniel, I always thought the principle was that out of all the different various tasks you do, 80% of the benefit comes from doing 20% of the tasks -- rather than working on a task with 80% efficiency or effort. So, technically what you might be observing with improved efficiency is that the extra output comes from focusing on the most productive tasks. Also, can you please tell me why the plain text and images aren't visible on your blog without javascript enabled?
littleidea 17y ago
(just posted this to the blog before reading here... I essentially agree with diziet) Dan, I like your conclusion, but disagree with the premise. I contend that your understanding of the Pareto principle was initially incorrect and you are not alone as your link to David's post is evidence. I further contend that your new approach is actually more aligned with the Pareto principle. The Pareto principle does not say that 20% effort will give you 80% of the benefit. The principle says that 80% of the effects come from 20% of the causes. That is a very significant distinction. The key is figuring out which 20% gives you the proverbial bang for your buck and doing 100% of that. That is not always easy or obvious. If you are talking about 'time' and all the hats a founder has to wear in an early startup, the math quickly breaks if one tries to spend %20 of the time on more than 5 things. IMHO, Pareto Power Law applied to entrepreneurship is not about spending %20 time on anything, it is about getting to parity on the undifferentiated infrastructure that every company needs to run for as little time and money as possible, so you can focus on narrowing down and finding the %20 of causes that really move the needle in your space. Then go all in... Regards, Andrew
piguy314 17y ago
I think it would be a mistake to apply the Pareto principle to time distribution as the author seems to want to do here: "so putting 20% into any one thing and reaping 80% of the benefits is a very time-maximizing way to live." The Pareto principle is really about the distribution of causes and effect and factors. The goal would seem to be to isolate and identify your vital factors and focus most of your energy on those to maximize your output.
yason 17y ago
It doesn't matter if it's 80/20, 90/10, 60/40 or whatever. The point is that a task consists of a two parts: 1. a small part of effort that produces most of the results 2. a large part of effort that produces what is needed to make #1 sufficient What explains number #2 is that people simplify their tasks in their heads. If you want to do task X then theoretically you only need to do X. But, in practice, you will have to do half a dozen other possibly smaller tasks as well which you have, while leisurely focusing on X, conveniently forgotten exactly until the point you actually start doing X. This applies to a surprisingly good number of various tasks, from programming tasks to even physical ones such as gardening.
known 17y ago
Analogy is " Could Wisdom of crowds' be wrong?
ahoyhere 17y ago
Sorta fluffy article, being that it is all conjecture and nothing mentioned is even remotely quantifiable. I'm a believer in the unquantifiable, but this was an article looking for a premise… which it didn't find. How about this, the 20/225 rule: "Professors Cooper and Kaplan at the Harvard Business School have shown that once the cost of supporting customers is taken into account, only about 20 percent of customers are profitable. In fact, these 20 percent of customers account for 225 percent of the profits. Of course, this means that the other 80 percent of customers lose 125 percent of the profits." -- Pricing with Confidence (an excellent book)
erikstarck 17y ago
Yeah, but only 20% of the time. (Sorry, couldn't resist.)

8 points by danielodio 17y ago

est 17y ago

I am surprised people would even take it seriously. Rational speaking, half of the law/principle out there are stated as-is without any warranties.

diziet 17y ago

Daniel, I always thought the principle was that out of all the different various tasks you do, 80% of the benefit comes from doing 20% of the tasks -- rather than working on a task with 80% efficiency or effort. So, technically what you might be observing with improved efficiency is that the extra output comes from focusing on the most productive tasks. Also, can you please tell me why the plain text and images aren't visible on your blog without javascript enabled?

littleidea 17y ago

(just posted this to the blog before reading here... I essentially agree with diziet) Dan, I like your conclusion, but disagree with the premise. I contend that your understanding of the Pareto principle was initially incorrect and you are not alone as your link to David's post is evidence. I further contend that your new approach is actually more aligned with the Pareto principle. The Pareto principle does not say that 20% effort will give you 80% of the benefit. The principle says that 80% of the effects come from 20% of the causes. That is a very significant distinction. The key is figuring out which 20% gives you the proverbial bang for your buck and doing 100% of that. That is not always easy or obvious. If you are talking about 'time' and all the hats a founder has to wear in an early startup, the math quickly breaks if one tries to spend %20 of the time on more than 5 things. IMHO, Pareto Power Law applied to entrepreneurship is not about spending %20 time on anything, it is about getting to parity on the undifferentiated infrastructure that every company needs to run for as little time and money as possible, so you can focus on narrowing down and finding the %20 of causes that really move the needle in your space. Then go all in... Regards, Andrew

piguy314 17y ago

I think it would be a mistake to apply the Pareto principle to time distribution as the author seems to want to do here: "so putting 20% into any one thing and reaping 80% of the benefits is a very time-maximizing way to live." The Pareto principle is really about the distribution of causes and effect and factors. The goal would seem to be to isolate and identify your vital factors and focus most of your energy on those to maximize your output.

yason 17y ago

It doesn't matter if it's 80/20, 90/10, 60/40 or whatever. The point is that a task consists of a two parts: 1. a small part of effort that produces most of the results 2. a large part of effort that produces what is needed to make #1 sufficient What explains number #2 is that people simplify their tasks in their heads. If you want to do task X then theoretically you only need to do X. But, in practice, you will have to do half a dozen other possibly smaller tasks as well which you have, while leisurely focusing on X, conveniently forgotten exactly until the point you actually start doing X. This applies to a surprisingly good number of various tasks, from programming tasks to even physical ones such as gardening.

known 17y ago

Analogy is " Could Wisdom of crowds' be wrong?

ahoyhere 17y ago

Sorta fluffy article, being that it is all conjecture and nothing mentioned is even remotely quantifiable. I'm a believer in the unquantifiable, but this was an article looking for a premise… which it didn't find. How about this, the 20/225 rule: "Professors Cooper and Kaplan at the Harvard Business School have shown that once the cost of supporting customers is taken into account, only about 20 percent of customers are profitable. In fact, these 20 percent of customers account for 225 percent of the profits. Of course, this means that the other 80 percent of customers lose 125 percent of the profits." -- Pricing with Confidence (an excellent book)

erikstarck 17y ago

Yeah, but only 20% of the time. (Sorry, couldn't resist.)