Pedro Arantesrose
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Pareto Principle

The Pareto Principle states that roughly 80% of the consequences come from 20% of the causes for many outcomes.
#80-20-rule
Zettelkasten, July 02, 2021 (changes)

Notes

  • The Pareto Principle states that roughly 80% of the consequences come from 20% of the causes for many outcomes.

    • For instance, 80% of funds raised come from 20% of donors.
  • Also called the 80/20 rule or law of the vital few.

  • It's a system mental model because it explains the proportion between causes and effects.

  • Vilfredo Pareto saw the 80/20 connection in 1896 when noted that 20% of the population owned approximately 80% of the land in Italy.

  • In business, about 80% of sales come from 20% of clients.

  • In economics, approximately 20% of the population owns 80% of Italy's lands.

  • In computer science, Microsoft noted that 80% fixing the top 20% of the most-reported bugs, 80% of the erros would be eliminated.

References

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Hyperbolic Discounting
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Natural Planning Model
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