Could the 80/20 Principle be Wrong?

Could the 80/20 Principle be Wrong?

When I started this blog in 2006, my first post was about my belief in the 80/20 principle, also known as the Pareto principle.

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="" href="">PointAboutegun 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.