I've lived my entire entrepreneurial career with the 80/20 rule as a guiding principle, and it's served me very well. As an entrepreneur, you simply can't put all of your time into everything, so putting 20% into any one thing and reaping 80% of the benefits is a very time-maximizing way to live.
But over the past 2 years at a title="http://www.PointAbout.com" href="http://www.PointAbout.com/">PointAbout, I've begun to feel like it's also limiting, but I haven't been able to put my finger on exactly how. Part of what I've been feeling I expressed in my Nov 2009 post on ABBA, which, as my co-founder Sean Shadmand puts it, is really just the thought that you have to be focused on what you're unfocused on (read the whole post if that doesn't make sense).
What's been gnawing on me is more than just a focus on preventing ABBA, though. I've been wondering what's truly possible with extreme focus.
This very insightful post on "Why the 80-20 Rule is Wrong" by David Wurtz just put me over the edge. I'm becoming a believer.
The way I read David's post, his argument isn't quite as forceful as the title. David writes, "I think the 80/20 rule is wrong...well not wrong, but not entirely correct." And I think I just might agree with him.
What really convinced me is the graph David drew, which I've embedded at left (to see it full-size, visit his blog). In this graph, David argues that with 100% focus on just a few things, one can achieve amazing results. Better than 100%. Truly transcendent results. I had never considered this possibility. Ignoring for a moment the obvious conniption fit a mathematician would have with a graph that shows an achievement level above 100%, there are examples of extreme focus producing extraordinary results. David shares a funny SNL skit video in his blog as an example.
Another example is by way of a huge shout out to my brother Sam, who focused on making photo sharing really, really great. His intense focus on Divvyshot caught the attention of Facebook, which recently acquired Divvyshot. Sam really hit the ball out of the park, and he did it by hitting the nail on the head. He did that by only having one nail to focus on.
Sean and Isaac, two of the PointAbout co-founders, have been beating this drum relentlessly. With a narrow enough focus, what's possible? Can the result be truly transformative? They would argue that the result of just focusing on one thing is many times higher than doubling the sum of focusing on two things. Or, to put it another way, why give two things 50% of your attention when you can give one thing 100% of your attention and get a 1,000% return on it? Moving forward I'm going to call this the 1,000/100 rule. That by focusing 100% of your attention on one thing, you can achieve 1,000% the return on it. Another way to view the 1,000% is as 10x the standard 100% total achievement level you could reach if you focused on two or more things.
So I'm going to keep my 80/20 approach for most things in life, but this year I've been carving out a special 1,000/100 category for a very focused part of my life. It's too early to delve into details, but I'll provide a full accounting on this experiment in early 2011. And David's blog posting has really pushed me fully into this camp, so thanks.
Comments and discussion are welcome, as always. I would urge anyone thinking through these points to not forget about the issue of time. It's easy to say "of course you should focus 100% of your attention on whatever you're doing" but that line of thinking doesn't take into account the fact that time is a very, very limited resource, especially for entrepreneurs. If we were to spend all our time on accounting, and logistics, sales, HR, and customer support, etc., we wouldn't have any time left over to innovate. This, full circle, is how I got enamored with the 80/20 approach. So switching to 1,000/100 is a huge mental shift that will mean I have even less time for anything else I choose to (or have to) spend time on.
Here's Seth Godin's take on it:
Hardly worth the effort
In most fields, there's an awful lot of work put into the last ten percent of quality.
Getting your golf score from 77 to 70 is far more difficult than getting it from 120 to 113 or even from 84 to 77.
Answering the phone on the first ring costs twice as much as letting it go into the queue.
Making pastries the way they do at a fancy restaurant is a lot more work than making brownies at home.
Laying out the design of a page or a flyer so it looks like a pro did it takes about ten times as much work as merely using the template Microsoft builds in for free, and the message is almost the same...
Except it's not. Of course not. The message is not the same.
The last ten percent is the signal we look for, the way we communicate care and expertise and professionalism. If all you're doing is the standard amount, all you're going to get is the standard compensation. The hard part is the last ten percent, sure, or even the last one percent, but it's the hard part because everyone is busy doing the easy part already.
The secret is to seek out the work that most people believe isn't worth the effort. That's what you get paid for.
I read your post and the one referenced from David Wurtz and I believe there are a few assumptions that may not be correct. First off, David poses the question if you gave 100% effort, what would the result be? He also mentions the idea that 20% effort would give you a B but 80% effort would give you an A. No where in the principle does it say 80% effort would in fact give you an A (or 100% result). It merely states you can put in 20% effort to achieve 80% result. This may be working at 20% capacity on a single task or picking out 20% of your tasks rather than worrying about them all.
It is really a guide or perhaps a mindset but it is a very effective way of thinking. In fact the concept is used all the time without specifically thinking of its name or even the ratio. When you chose what tasks you do for a day, hopefully you pick the most important tasks rather than focus on all the little ones, although you didn't think 80/20 when you did this, that is generally what you are doing.
Both you and David mentioned something that was considered an alternative to the 80/20 rule but is in fact really the 80/20 rule ultimately.
David mentioned as a student if you did B work for most of your projects and really put 100% effort into a few projects to get an A/A+ your results would be amazing. Isn't this really the 80/20 rule? Your focusing effort on a few (hence 20%) of your classes/projects and doing average work on the 80% that are not important.
In your post you mentioned "So I'm going to keep my 80/20 approach for most things in life, but this year I've been carving out a special 1,000/100 category for a very focused part of my life. "
This is really the same thing, focusing on a small handful of part of your focus that you will put intense effort into.
Philosophical or Time Management could be the exact same things. Just a different viewpoint in semantics. All the most recent arguments have been about launching the "business" and correcting in flight by using customer feedback to guide the "manifestation" in progress. So then it is perfecting,
as that poor little abused word finds some rest. And not Perfection as a static sense of being.
The first experience I had with this 80/20 rule was more in line with the Long Tail approach to collaboration than to it's use as an "AVERAGE" principle. In dealing with volunteers in a non-profit organization the expression "Herding Cats" explains this Long Tail and thats why any business requires voluntary captivity during certain hours of the day. The Law of the Vital Few is why founders and co-founders can co-create something that has'nt existed before and therefor create value which if quantified can yield money in the bank. Organization from chaos can create weal. Weal is the precursor to wealth. www.ted.com/talks/clay_shirky_on_institutions_ver...
This is an excellent presentation in my view of why Social Media as a guiding template gives "value creation" the opportunity to flourish. Knowing when your personal peak performance time is,is the gold you refer to in the 1000/100. Quality versus quantity. Hire out certain tasks which can be
done by anybody trustworthy like an Intern. Meditation quiets the mind .
Quality knows where to push. A noisy mind pushes back when not necessary, it wastes energy . Aristotle pondered the same question
with his word...Entelecheia.
Jason, to dig into your point a bit about perfection, the thing that I feel perfectionists often forget is that perfectionists are *imperfect* with their time.
I've always said that "perfect is the enemy of good enough" because of the time drain. And I've always thought the "good enough" should be defined by the receiver of the action, not the provider. So to use a simplistic example, let's say you're at an ice cream stand. There are 10 people waiting in line ahead of you. I don't think any of the people waiting would want the ice cream vendor to make the ice cream while they wait, and bake a hot waffle cone while they wait, etc. Yes, that cone would be unbelievably good, but the time it would take to make it perfect means you'd never be able to wait long enough to actually receive the ice cream cone. It's "good enough" for you to receive a pre-made cone and pre-made ice cream.
I guess my shift in attitude this year (to continue with this example) is that the ice cream stand owner might spend an inordinate amount of time making a unique flavor of ice cream. A flavor that everyone talks about. A flavor that causes people to come from miles around to try. The rest of the process is "good enough" - pre-made cones, pre-made ice cream, but just one aspect of it - the flavor- has been obsessed over. And that 1,000/100 obsession creates something truly unique and transcendent.
As with all principles it can be wrong! Think as your brother showed with Divvyshot you have to pick the right thing to spend your time on.
I tend to put about 70-90% concentration onto one project at a given time, the other time is spent maintaining my other bits and knowing which project will be the next to get blitzed. Through as with all principles this one works for me atm however it's down to you which ones work =]
Awesome post Daniel. You and I have spoken for years about "its good enough" and you and I have disagreed, where I thought a pixel popped to prefection app or design etc goes a much longer way. I am very excited to see how successful you will be with a 100% focus on the "whatever". Proof is in the action, not the words. And you are one of the most energetic entrepeneurs I have ever known. Gonna be a challenge to focus 100%
There is a recently-published book (last couple years) that talks about how athletes operating at high levels of performance improve their skills and achieve even greater abilities. It was along the lines of "The Talent Code" or "Talent is Overrated", but had a different overall focus. I'd give the book's name if I could remember or find it again.
Anyway, the main point this book makes is that a person will only improve at something when they operate at or near the top of their ability and push themselves hard enough to where they make mistakes and/or outright fail. By learning from these failures, they grow and improve.
Now contrast such a training mode with an athlete who trains with Pareto principle in mind. This person will get very good at operating at their current level of ability and will soon be able to do whatever their 20% effort allows effortlessly and without failure. However, their skills will remain stuck there with the possibility that by not challenging themselves for long enough they may actually be harming their ability to adapt well to future situations. Even though this discussion involves sports performance, it seems reasonable to generalize to other aspects to living.
Even with that aside, I've always been a bit suspicious of using things like the Pareto Principle to guide actions because a business or any other interesting thing life is not a simple, deterministic system. That other neglected 80% can negatively influence your business or life in ways that are hard to anticipate.
Just make sure you put that 100% behind a known winner. There's so much risk in life and business it can make sense to diversify.
I like your conclusion, but disagree with the premise.
I contend that your understanding of the Pareto principle was initially incorrect and you are not alone as your link to David's post is evidence.
I further contend that your new approach is actually more aligned with the Pareto principle.
The Pareto principle does not say that %20 effort will give you 80% of the benefit. The principle says that 80% of the effects come from %20 of the causes. That is a very significant distinction.
The key is figuring out which %20 gives you the proverbial bang for your buck and doing %100 of that. That is not always easy or obvious.
If you are talking about 'time' and all the hats a founder has to wear in an early startup, the math quickly breaks if one tries to spend %20 of the time on more than 5 things. IMHO, Pareto Power Law applied to entrepreneurship is not about spending %20 time on anything, it is about getting to parity on the undifferentiated infrastructure that every company needs to run for as little time and money as possible, so you can focus on narrowing down and finding the %20 of causes that really move the needle in your space.
Then go all in...
I don't know who first came up with the 80/20 rule, but I feel it should be a guiding principle of business.
Whether we know it or not, the 80/20 rule applies: You get 80% of the value of anything from 20% of the work. Then you do the other 80% of the work to get the last 20% of value.
In fact, here's a picture of how the rule works. I call it the "80/20 Value Curve".
You get tremendous value from the first 20% of effort, and greatly diminishing returns from the rest of it.
(Coincidentally, you'll note that I didn't make my own graph, but just went to the Google Image search and looked for an appropriate graph, which I copied & pasted. Why? Because it's good enough, of course!)
I don't know who first came up with the 80/20 rule, but I feel it should be a guiding principle of business. Whether we know it or not, the 80/20 rule applies: You get 80% of the value of anything from 20% of the work. Then you do the other 80% of the work to get the last 20% of value. In fact, here's a picture of how the rule works. I call it the "80/20 Value Curve". You get tremendous value from the first 20% of effort, and greatly diminishing returns from the rest of it. (Coincidentally, you'll note that I didn't make my own graph, but just went to the Google Image search and looked for an appropriate graph, which I copied & pasted. Why? Because it's good enough, of course!) Of course, the rule is something perfectionists have a VERY hard time understanding. They want something to be perfect and will compulsively spend time getting to that upper right part of the value chart. But what a perfectionist doesn't realize is that when they do that, their TIME is not perfect. They have expended (I would say, have thrown away) vast sums of time, and that time can never be returned to them. In fact, I always say "Perfect is the enemy of good-enough", to which a perfectionist replied to me, "You just used incorrect grammar, the correct way to say this would be, "Perfection is the antithesis to good enough." And I said "That's exactly my point! The way I said it was good enough!" Don't spend time trying to make something perfect unless the market demands it. Just make it good enough until a customer demands better, and then make it good enough again. I've seen so many people trying to make a product, item or service perfect before they even know if there's demand for it. That's just downright stupid in my eyes. Guard your time jealously and dole it out based on what your customer asks for, not based on what you think they're going to ask for. A great quote from the magazine FastCompany: "The most-forgotten rules in business: [1.] Listen to the customer. [2.] You are not the customer. Lastly, a case study on why the 80/20 rule is present even when you don't know it. Take the airlines, for instance. They have progressed up this value curve to the point where any further prevention of fatalities would be prohibitively expensive. Sure, everyone could be equipped with a parachute, or planes could be made out of titanium instead of aluminum, but the benefit vs. cost of these steps (and countless others) does not compute. Society has, invisibly, pushed the airlines & airplace manufacturers to a point on the value chart where there are few enough accidents that we don't demand further improvements.
I've been wondering if the 80/20 rule applied to how often my Facebook friends posted on the site. It turns out to be pretty close. I used 160 total news feed posts which included 90 friends and I needed 23 instead of the hypothetical 18 to reach the 80% threshold.
Facebook wouldn't let me refresh back anymore but I would like to continue with this because my guess - and I know these top 18-23 are heavy users - is that over time this will even out.