Notes
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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.
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Also called the 80/20 rule or law of the vital few.
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It's a system mental model because it explains the proportion between causes and effects.
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Vilfredo Pareto saw the 80/20 connection in 1896 when noted that 20% of the population owned approximately 80% of the land in Italy.
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In business, about 80% of sales come from 20% of clients.
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In economics, approximately 20% of the population owns 80% of Italy's lands.
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In computer science, Microsoft noted that 80% fixing the top 20% of the most-reported bugs, 80% of the erros would be eliminated.