Pareto principle 80 20 rule

Jun 25, 2012 06:56 PM

SCALE INVARIANT!  so, eg

look at top 10 richest people:

the top 3 of those 10 (warren buffett, Carlos Slim and Bill Gates)  own as much as the other 7.

note in business:

<ul>

<li>80% of your profits come from 20% of your customers</li>

<li>80% of your complaints come from 20% of your customers</li>

<li>80% of your profits come from 20% of the time you spend</li>

<li>80% of your sales come from 20% of your products</li>

<li>80% of your sales are made by 20% of your sales staff<a href="#cite_note-8"> </a></li>

</ul>

also note:  Microsoft noted that by fixing the top 20% of the most reported bugs,

80% of the errors and crashes would be eliminated.

Jan 26, 2011 02:14 PM

This is an example of a power law (eg applying to brush fires and to earthquakes and asteroid strikes or stock mkt melt-downs) because of self-similarity across a wide range of magnitudes.

named for Vilfredo Pareto... 1906 observation that

80% of land in Italy was owned by 20% of the population.

80% of your sales come from 20% of your clients.

Microsoft noted:  if you fix the top 20% of the most reported bugs, then 80% of the errors and crashed were eliminated.

Tim Ferriss 4 hour work week recommended focusing one's attention on those 20% that contribute to 80% of the income. More notably, he also recommends firing those 20% of customers who take up the majority of one's time and cause the most trouble.

Human development:  gestation period:  embryogenesis takes 20% of the time;  fetal devel takes the rest.

Criminology:  20% of criminals commit 80% of the crimes.

Financial services:  20% or fewer of the company's customers generate positive income and

80% or more are costing the company money.

Pareto principle 80 20 rule

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