The Pareto Principle has been well established in 1896 by economist Vilfredo Pareto. He undertook a lot of tests and proved that the principle existed in reality. In one notable test he observed that about 20% of the peapods in his garden contained 80% of the peas ( source: https://en.wikipedia.org/wiki/Pareto_principle) It has been expanded to help with business decision largely by Rich Koch in 1997 where he did a lot of research and demonstrated that there was a 80/20 rule at work in business. He demonstrated that the following could hold true
Does the Pareto principle still hold in the new digital age? You don’t have to go too far to find that the principle is still alive and well. For example:
The concentration is becoming more extreme and is moving towards a 95/5 or even more concentrated! So what are the implications of these changes?
Everthing is changing quickly – Become more responsive
Concentrate your ideas and effort where you will get the best return!
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