Perhaps one of the most elementary and hindering mistakes we make in life is to assume a linear relationship between events and causes in life. The reality is that linearity is not the norm. The 80/20 rule is simply a byproduct of the power laws, logarithmic and exponential tendencies of many of life's happenings. In this post, I will explain 80/20 and how to leverage it in all areas of your life, because life is too short to be a chump.
What is 80/20?
The 80/20 rule also known as the Pareto principle or the law of the vital few, is a principle that states that roughly 80% of results are generated from 20% of efforts.
It’s a distribution that was uncovered by an Italian economist named Vilfredo Pareto. Pareto noticed that 80% of the land in Italy at the time was owned by 20% of the population. He also noticed the principle at work in his own garden! 20% of the pea pods contained 80% of the peas. This distribution has been proven multiple times in different sectors since its discovery.
The ratio is not always 80/20, it can be skewed all the way to 99/1 or even bigger ratios.The main idea is that a small number of critical causes tend to produce the biggest effects in almost all area in life. What is important is being able to identify these causes and leverage them to your benefit.
Examples of 80/20
In the video linked above, I go through 3 examples in real time, clearly showing the consistency of 80/20. The examples I use are The worlds GDP, the population of cities in Australia ( where I am from), and analytics on my own YouTube channel. ( make sure to check that out )
Some common examples often mentioned in the 80/20 discussion are how:
• 20% of criminals commit 80% of crimes ( Think of convicts that keep returning to prison )
• 20% of employees account for 80% of the companies success ( Just look at any sales team to see this in action)
• You wear 20% of your clothes 80% of the time (you dirty fucker, change your shirt)
• You walk on 20% of your carpet 80% of the time ( the walk from your bed to the fridge )
• You spend 80% of your time with only 20% of your friends
I must stress that the ratio isn’t always 80/20, but it’s almost always something skewed.
Why does 80/20 happen?
The 80/20 distribution happens because of the magic of feedback loops. Many people who have owned goldfish can attest to the following observation. You go to the pet store and buy 3 equal sized goldfish; a couple months roll by and the 3 goldfish are drastically different in size. Why is that? Well, naturally when you first fed the goldfish one might have been lucky enough to eat a bit more food than the others. This extra food allows the goldfish to grow slightly larger than the other goldfish giving it a slight advantage when it came to eating food. Over time this advantage gets larger and more obvious until the other goldfish can barely compete, and you are left with one big fat goldfish that just eats all the food the same way that your cousin David does at every family gathering the fat fucker.
Now replace the goldfish with Google or Microsoft and you can see how monopolies are formed. Other factors are involved of course, but this seems to be one of the primary reasons for the ratio.
How to leverage 80/20 Examples for the real world
Now that you know about the magic of 80/20, let’s go over ways that you can optimise your life using this simple principle. 80/20 is a mindset, being able to see through everything through this mindset will drastically improve your results in all avenues.
Two best friends decide to join the gym to build some juicy muscles and make the king of Iron Arnold proud. One of the boy’s trains 6 times a week and focuses on isolating each muscle with specialised movements. He does an hour of cardio after each workout in hopes of getting ripped. He works out for an average of 12 hours per week. He doesn’t worry too much about his diet, and has never counted his calories. The second boy takes a more minimalistic approach, he does full body workouts 3 times a week focusing on heavy compound exercises that stimulate his whole body. He does cardio only once a week and prefers to focus on high-intensity interval training such as hill sprints. He focuses on the diet keeping track of his daily macronutrient requirements. He only works out 4 hours per week. Who will achieve their goals faster? The second boy will. He will make more gains because he puts all his effort in the 20% of things that will result in 80% of the results. Instead of spending 12 hours in the gym like his friend, he stimulates his body effectively and gives it plenty of rest resulting in insane gains.
Jim works in a sales department. He spends most of his days performing small tasks that are delegated to him. he replies to every email and is quick to give anyone his time. Unfortunately, due to the workload, Jim only spends one hour of his day performing cold calls. He has been working hard for a couple of years doing everything his boss command, however, has been unable to create the results needed to be eligible for a promotion.
Ray works in the same sales department as Jim. He spends most of his time at work cold calling clients. He doesn’t reply to most of his email. When he uses email it’s only to deal with potential clients or critical tasks. Ray does not have time to chit-chat with co-workers. To him, if something is a non-critical task it can be delegated to someone else. Through his time spent on client acquisition, he has managed to secure 6 figure deals, making his boss very happy. Ray doesn’t complete half of the tasks in his job description but gets promotions regardless.
Ray is successful because of his understanding of the 80/20 rule. Jim is not successful because he treats all tasks with equal weighting.
You are divorced from your wife and can only spend one day out of the week with you Son, what do you do? Is it better to watch TV with him for a couple of hours or to go outside and do something? Think about this, we forget probably around 99% of our lives. The day to day shenanigans quickly disappears into the ether. Don’t believe me? Can you remember what you did throughout one whole day a month ago? No, we only remember things of significance such going away on that trip, or your sister’s wedding. Now back to your son, if your goal is to optimize your relationship with him, you are probably better off going fishing with him or shooting a few hops at the park. These things are will be the 20% that equals 80% of the memories he remembers with you.
I remember having a project management class for my engineering degree. Our assignment was to do a presentation in front of the whole class. A couple of my friends spent weeks and hours researching for the assignment. Come due day, all they presented was a dense and boring death by powerpoint slide.
I was to present the week after, I decided to take a different approach and look at the criteria of the assignment. I noticed that presentation skills such as eye contact, and vocal tonality scored high. I also remembered the professor telling us that our slides should be simple. So, my team and I decided to focus on simple and entertaining slides that got to the point quicker. We didn’t use palm cards and remembered our speeches making them far more engaging. A total of 8 hours was spent on the presentation and we received the highest mark in the class.
To maximize your efficiency in life you must always be looking for the 20% that will give you 80% of the results. When you find these double down on them, make them your primary focus. As Tim Ferriss suggests, always ask yourself
‘what is the one thing that I can do that will make everything else irrelevant’, It might be cold calling new customers It might be eliminating soda drinks from your diet. Make it your mission in life to always look for these 20%, those motherfuckers are the true game changers.