“The Pareto Principle states that 80% of your results come from only 20% of your efforts. The principle is initially credited to Vilfredo Pareto, who noticed back in the early 1900s that 80% of Italy’s land was owned by 20% of Italy’s people. In business, for instance, this means 80% of your profits come from 20% of your sales.” (Source)
“Most things in life are not distributed evenly.” (Source)
- Customer Service - “80% of the complaints come from 20% of your customers.” (Source)
- Software Engineering - “80% of the program’s functionality comes from 20% of the developer’s efforts.” (Source)
- Distribution of wealth in a market economy (measured by the Gini coefficient)
- Sensitivity Analysis - Delineate how uncertainty in a system’s outputs is driven by uncertainty in its inputs.
- Power Laws - Nonlinear relationship between two quantities, where one varies with the other’s exponent.
- Leverage - With the right levers, a small amount of input can create a lot of output.
- Proximate vs Root Cause - The proximate cause is the easily blamable symptom, while the root cause is the ultimately responsible disease.
- Sturgeon’s Law - 90% of everything is crap, and it is the 10% that is not crap that is important.
- (Customer) Segmentation - People have different needs and wants, so there is probably not a single best answer for everyone.
- Occam’s Razor - Simpler explanations with fewer assumptions are more likely to be correct.
- Catalysts - Substances that begin, maintain, or accelerate a reaction.
- Ninety-Ninety Rule - “The first 90% of the code accounts for the first 90% of the development time. The remaining 10% of the code accounts for the other 90% of the development time.”
- Price's Law - “The square root of the number of all authors contribute half the publications in a given subject.”
- Signal vs. Noise - “A signal is an information carrier which is a space and time-varying quantity and is used to send the information it carries. Noise, on the other hand, is any unwanted sound or effect on signals.”
Thanks for reading! If you liked this article, pay it forward. Share it with your network.
To learn about my expertise in corporate development and strategy, see my website.
