That the 80/20 law is much, MUCH more complex than I had always thought.
Before I go into it though, let’s make sure we’re all on the same page. First, what is the 80/20 law (aka the Pareto Principle) ?
Gotta love that beard - it reminds me of that metallic sponge used only for really tough dishes.
Vilfredo Pareto was an Italian genius whose résumé reads like a list of acceptable jobs according to Indian mothers: he was an engineer, a sociologist, an economist, a political scientist AND a philosopher.
While he was busy doing all these jobs, Vilfredo also managed to discover something interesting: income wasn’t distributed evenly. Instead of following the normal law of distribution, with a majority of people having an average income, it was heavily skewed towards the rich.
In fact, 20% of people held an entire 80% of total wealth!
20% of people, 80% of the wealth - 80% of people, 20% of the wealth.
What is remarkable with Pareto’s principle is how widely it applies to anything. Think about it - 20% of your time at work usually accounts for 80% of your output (e.g. 20% of time actually working vs. 80% spent goofing off on Quora ;). 20% of movies account for 80% of movie tickets sold. 20% of your t-shirts are worn 80% of the time.
Just for poopies and giggles, I did a search on Google Images for Pareto Law examples, and this is what came up:
The last one is my favorite.
The 80/20 law is EVERYWHERE. The more you look, the more you’ll find examples of it staring right back at you.
Which, you know, is already pretty cool, right?
NOPE.
Turns out, I was scratching the surface before. This is where I usually stopped. For years, I never dug beyond that one 80/20 split, and simply accepted the law as it was.
But recently, I discovered the 80/20 law goes deeper. MUCH deeper.
Let’s go back to that first example, of wealth distribution in the US, and only look at that top 20% of people…. Notice anything funny?
IT’S A HIDDEN 80/20 LAW!
20% of 20% of people hold 80% of 80% of total wealth!
Which means: 4% of all individuals hold 64% of all the wealth.
But wait, let’s look at those 4%… Could… Could it be?
IT’S ANOTHER FREAKIN’ 80/20 LAW!!!!
20% of 20% of 20% of people, hold 80% of 80% of 80% of total wealth (whew!). Or, 0.8% of people hold over half of total wealth.
THIS is what’s wonderful about the 80/20 law - provided that your sample group is large enough, you can apply it over and over again.
Apply it ten times to the population of the world, and you find that 768 people hold a WHOPPING 10% of all wealth. Which makes sense because, you know, these guys:
Soon to feature Julia Kvach!
The 80/20 law isn’t a dumb 80/20 split - it functions like a power law.
Think back to all of those examples I previously discussed, but now apply the law multiple times.
- Have a hundred shoes? One of your pairs will be worn 50% of the time!
- Want to work more efficiently? 4% of your time at work generates 64% of the value!
- Want more upvotes? Join the 0.2% of Quorans who attract 41% of total upvotes!
My mind was blown.
Now, I’m working on identifying that 4% of my super productive time to make it even more productive.
Instead of improving everything (urgh, much effort), I’m now going to try to improve the tiny things that have a disproportionate impact.
What does that mean, specifically?
I now have the best excuse for taking longer lunch breaks ^^
Poka poka,