Using the 80/20 rule to gauge AI disruption and future prospects

Welcome to TomTalks ??, a weekly newsletter reaching over 43,000 decision-makers focused on innovation, effective leadership, and the strategic use of AI to revolutionize society and the workplace. Want to participate in a 10-minute fireside chat with Tom? Of course you do –?super simple form here .

I am a big believer in the power of the Pareto principle. If you’ve never heard of it, it’s just the fancier way of saying 80/20 rule, which is shorthand for the idea that roughly 80% of effects come from 20% of causes. This is a great heuristic and I’ve seen the transformative impact it can have on both personal and professional lives — including mine.

The beauty of the Pareto principle lies in its versatility. It can be applied to so many things — even itself! I.e., if you use it in 20% of applicable scenarios, you’ll probably achieve 80% of the possible benefits. See what I did there? Yeah, also, it doesn’t take itself super seriously as a framework, and I find that especially appealing. It's simple, elegant, and sometimes totally useless — all of which make it a fun rule of thumb.

At its best, it can help streamline decision-making processes, optimize resource allocation, and identify areas of focus that yield the most significant results. It’s also deeply ingrained in our daily lives that we often experience it without realizing it.

Check your closet, for example: If you look closely, you might realize that you wear 20% of your clothes 80% of the time. Similarly, in your professional life, 80% of your work's value can often be traced back to just 20% of the tasks you perform.

Lately, I’ve been thinking about the 80/20s of AI. There are loads of them that I think might be important, but for today, I’ll just point out some of the low-hanging fruit and let you tell me in the comments what other applications you see.

1. Threats/Risks

Since the release of GPT-4 and Bing Chat, there’s been a latent anxiety (some of it warranted, much of it based in fear-mongering) around the emergence of a superintelligent AI — an artificial general intelligence, or AGI, which is Hollywood’s preferred take on the technology. (See: Terminator, I,Robot, The Matrix, etc.).

But the assumption that AGI is the main threat posed by artificial intelligence is flawed, and overlooks all the smaller, but still dangerous problems posed by the comparably “dumb” AI tools we’re using today.

Let’s say that an AGI like Skynet represents a “100%-level AI” with true intelligence, and that total chaos and the complete breakdown of human civilization, along with an imminent threat to its existence, represents “100% disruption.”

What the Pareto principle suggests is that we’d be wise to focus our worries on the possibility of 80% disruption, because that could feasibly be achieved by AI that’s only 20% as capable as Skynet. So on the side of optimism, an AGI probably isn’t anywhere near being developed. But realistically, that’s missing the point. We are already seeing massive disruption because of tools and systems that are arguably <1% as capable as something like Skynet — and we are categorically unprepared for the likely outcomes associated with a 20/80 disruption scenario.

2. Ethics

This take is less bleak. I wrote about ethics and AI in last week’s newsletter, but here’s something I left out: Even though AI presents an ethical minefield, we can likely avoid 80% of the bad stuff by putting just 20% of possible efforts into identifying and mitigating the most glaring ethical traps. If we focus on core issues like fairness, transparency, and accountability, I’m optimistic that we can build AI systems that are?at least?as ethically sound as their human counterparts would be.

3. Regulation

Two points here: First, the Pareto principle implies that 80% of AI disruption will occur in 20% of industries. At the moment, this aligns with what we’re seeing, with disproportionate disruption happening in the most plugged-in sectors, including finance, marketing, logistics, etc. The takeaway is that while governments won’t be able to regulate all the arms of AI, they can help ensure a smooth transition to an increasingly AI-powered economy by identifying and focusing on those 20% of industries, for example to highlight vulnerable job categories.

Second, investors and market regulators should watch out for a big bubble. Thousands of AI tools have been released this year already, and hundreds of new companies created. In the long run, 20% or less will probably corner 80% or more of their respective markets’ shares. Important note: I?strongly?disagree with anyone who says AI is?just?a bubble. What I’m saying is that only some of these tools and companies will survive, and there are plenty of implications there to consider. (Counterpoints made here. )

4. Training and Adoption

AI can do?everything?now. If you’re anything like me, you’ve probably got “AI tool fatigue,” and a growing cynicism toward the endless stream of posts in your LinkedIn feed showing you all the “best” tools in categories A-Z.

The question is, how do entrepreneurs and other business leaders know where to put their focus? Most don’t have anywhere close to the bandwidth required to test and understand every potentially helpful tool out there.

My advice? Don’t overthink it. Identify two or three hotspots for efficiency optimization in your processes, do a little testing, make an informed decision on tools to invest in, and concentrate on making that handful of tools work for you as well as possible. Ignore the rest.

Don’t focus on perfection or all-out effort. Focus on doing at least 20% of what you think is possible, and it’s likely that you’ll get 80% of the benefits.

I don’t recommend basing any giant business decision on the Pareto principle, but I do think it’s an excellent framework for cutting through the fog of data and information. I have been consistently impressed by its far-reaching implications and the potential it holds for unlocking success and efficiency in all aspects of life. If you have some interesting anecdotes or use cases relevant to an 80/20 framework, I’d love to hear about them!

Welcome to TomTalks ??, a weekly newsletter reaching over 43,000 decision-makers focused on innovation, effective leadership, and the strategic use of AI to revolutionize society and the workplace. Want to participate in a 10-minute fireside chat with Tom? Of course you do –?super simple form here .

Tom is Co-Founder & President of Innovation at Massive Alliance, a concierge thought leadership agency. Tom co-founded Massive's?Executive Leadership Branding ?program – through which hundreds of senior executives maximize their thought leadership impact via consistent, mainstream publication distribution at major media outlets like Entrepreneur Magazine, Newsweek, Fast Company, and Rolling Stone.