The Pareto Principle in a digital age

22-05-17
Pareto 80/20 Google YouTube Mobile Search Richard Koch Vilifredo Pareto

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

  • 80% of a business’s profits come from 20% of its customers
  • 80% of results are from 20% of employees

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:

  • Google accounts for 80% of desktop search ( Source)
  • Google accounts for 94% of the mobile search market ( Source – Forbes)
  • On YouTube 95% of views come from 5% of its content ( Source)

 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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Paul Comyn

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I am the COO of Your Business Live.

Your Business Live provides exclusive promotional networking platforms which deliver leading edge automatic tools proven to promote and viralise user generated content to the world via search engines and a large number of social networks- ( see detailed description under 'Business Info' below). 


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