The 80/20 rule (aka Pareto principle) traces its origins back to Vilfredo Pareto, an Italian economist, who observed that 20% of pea pods in his garden produced 80% of the peas. He then applied the same logic to land distribution in Italy and found that 80% of the land was owned by 20% of the population. This mental model has been leveraged by many people over time to make better decisions and to work smarter not harder.
This particular rule is one of my favorite mental models. This rule basically states that 20% of the causes, inputs, or efforts lead to 80% of the results, outputs, or rewards. You can leverage the 80/20 rule in your life by breaking down activities in your life and understanding which 20% activities bring you 80% of the value. Understanding this mental model can really help when it comes to simplifying complexity and working smarter. Here are a few examples of the rule:
80% of sales are from 20% of clients.
80% of project value is achieved with the first 20% of effort.
80% of your knowledge is used 20% of the time.
80% of sales are produce by 20% of a company's products or services.
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