In 1941, a Romanian-born American engineer named Joseph Juran came across the work of Vilfredo Pareto, an Italian professor of political economy. In 1896, Pareto noticed that 80% of the land in Italy was owned by 20% of the population. Earlier, Pareto discovered that 20% of the pea pods in his garden contained 80% of the peas. Juran attributed this unequal distribution to Pareto and called it “Pareto’s Principle.”
Understanding the Pareto principle
The Pareto principle, also known as the 80/20 rule, states that 80% of the results come from 20% of the effort. This rule shows up in a surprising number of domains:
- In marketing, 80% of your sales comes from 20% of your marketing efforts.
- In venture capital, 80% of your returns comes from 20% of your investments.
- In time management, 80% of your productivity comes from 20% of your time.
- On social media, 80% of your likes comes from 20% of your posts.
Introducing the Pareto Cubed principle, or the 50/1 rule
The Pareto principle even applies to itself. This self-similarity allows us to reapply the 80/20 rule to the remaining 20%.
If 80% of the value is created through 20% of the effort, then 64% of the value is created through 4% of the effort (Pareto Squared).
If we apply the 80/20 rule one more time, then approximately 50% of the value is created through just 1% of the effort (Pareto Cubed).
How the 50/1 rule can change your life
If you apply the 50/1 rule to your typical day, you’ll find that ten minutes of effort are responsible for the majority of your productivity.
This insight will completely change your approach to life.
Practical limits to the 50/1 rule
Of course, you can’t work on a hundred different endeavors for ten minutes a day and expect to be successful. There’s a natural limit to the 50/1 rule. Identify just a few moments in your daily life which had a massive impact. Maybe it was an email you decided to send. Maybe it was a phone call or brief introduction. Maybe it was a last minute decision to be somewhere or meet someone.
Focus on the few activities that are responsible for the majority of your success.