Peter Macke

10-20% will have 80-90%…

The rule is not absolute, but it does show up more often than not. It has puzzled and intrigued social scientists for decades because the underlying mechanisms for its widespread applicability and cause are not understood.

Examples:

In Nature: A small percentage of rivers (like the Nile, Mississippi) and lakes (like the Great Lakes, Lake Victoria) contain most of the water. 20% of the trees in a forest often contain 80% of the biomass. A minority of natural disasters (2004 Tsunami, Katrina) cause the majority of the devastation.

Social Media Influence: 20% of accounts will get 80% of the likes. On twitter, approximately 1% of users are responsible for 90% of the tweets.

In Sales: 10-20% of accounts do 80-90% of the sales.

Athletics: One key player makes or breaks the team’s success (Messi, Tom Brady, Steph Curry)

Music Streaming: A small number of artists and songs will accrue the vast majority of streams. Even for wildly successful artists, only 20% of their songs will get most of the listens.

Health and Wellness: A single unhealthy habit (poor diet, tobacco use, neglecting sleep) can cause a majority of health problems.

Crime and Law Enforcement: A small number of repeat offenders will be responsible for the majority of crimes in any given city.

Trading and Investing: Warren Buffet has said that all his wealth came from maybe 10 really good decisions. Most of his time was actually spent trying to avoid the bad decisions that end up causing most of the damage. In the world of finance, where takes just one poor decision to totally destroy your wealth (Gabe Plotkin), it is best to focus on preventing bad decisions than making good ones. As Warren’s partner Charlie Munger said: “Avoiding stupidity is easier than seeking brilliance”

Why Does This Matter to YOU?

You can use this principle to simply and improve your quality of life.

Focus on maximizing the 10-20% of your actions that yield 80-90% of the results.

This can also be applied the other direction. If a small number of bad habits or behaviors are holding you back, focus on reducing or eliminating them to improve. A huge one that many people neglect is sleep.

Time is our greatest asset. Focused efforts on actions that yield the highest results and ignoring the less important tasks free up time for other important parts of our life.

One popular decision making heuristic is Covey’s Matrix:

My favorite concept I’ve been thinking about lately is Naval’s concept of leverage. It is a powerful tool for amplifying your output through smart choices. A personal example: I am getting involved in the family tea business, and in doing so I’m thinking what 1-2 things can I put most of my effort into that will create the best return on my time.

The TLDR of this Naval concept is: work smarter not harder. Focus on pressing the buttons that compound and multiply your efforts the most.

P.S. – Looking through my notes today, I found something I saved that James Clear, author of Atomic Habits wrote about the Pareto Pineapple (from his 3-2-1 weekly newsletter):

“Relationships. Who are the few people that have the most positive impact on my life? Spend more time with them.

Priorities. What are the few actions that have the most positive impact on my day? Prioritize them.

Learning. What are the few information sources I learn the most from? Focus on them.

Stress. What are the few sources that cause most of the stress and friction in my life? Eliminate them.” -James Clear