X Article: https://x.com/Alfred_Lin/status/2064341983720821034?s=20
20% of your inputs produce 80% of your outputs
20% of your customers generate 80% of your revenue
Interpretation: 20% of your effort yields 80% of the result
The 80/20 rule is useful if you’re doing things at a mature business and are trying to eliminate low-value work
However for entrepreneurship the Pareto Principle starts to fail
Founders are trying to create something that doesn’t exist yet
Founders are trying to build companies that redefine a category
Founders who redefined categories don’t ask how to get 80% of the result with less effort
Thoughts
I think the 80/20 rule still applies in entrepreneurship when the founder thinks about how to segment their personal time they give to the company
A lot harder to predict what’ll get you 80% of the result with 20% of the effort but often times certain things will almost always provide you with more value
I’d argue with AI 80/20 rule is more relevant now than ever before
As for market share I think you have to think about how to be the best, you have to think about how to capture 100% of it not 95 or 90
If you don’t think you can be the best then don’t do it