The 80/20 Principle: The Secret to Achieving More with Less

Why You Should Read It: The principles in this book can literally add hours to your days and compound your happiness. It's worth a look. What's more important than having time? Average Read Time: 4.5 Minutes We've all surely heard of the 80/20 Principle, or Pareto's Law as it's more formally known. It goes something like this: 80% of the results come from 20% of the effort. It's often thrown around in business as nothing more than a buzzword. Few actually do a full 80/20 analysis of their business and almost no one I've come across has applied the same to their life as a whole. Other than two people that is: Richard Kock and Tim Ferriss-and the people who have since followed in their footsteps (me included). The 80/20 Principle is the source material for what Tim wrote in The 4-Hour Work Week. It took me reading it a couple times to grasp the simplicity and life-altering implications of the principle. The time saved and gained will blow your mind. The amazing thing is that the studies in this book show the principle working in just about every possible scenario. Of course it's not always 80/20. Sometimes 90/10 or 95/5 or even 70/30. But the point is it works-without fail. Richard's purpose was to explain this ancient principle in a way that would inspire action and application to every part of life. When applied to work, productivity will go through the roof, but when applied to your life outside of work, happiness and fulfillment do just the same. All it takes is a shift in thinking. Try the following for a few weeks and the time in your life will never be the same. 5 ways to apply the 80/20 Principle to enhance your life: 1. Do the 20% of your work that leads to 80% of your results: Track all the time you spend on projects each hour of each day for a week. How many of these things were necessary? How many got you closer to your goals? How many were a waste of time? How many could someone else have done? Pick the 20% of your tasks that yield 80% of the results and outsource or simply discontinue the rest. Wondering what to do with your remaining time? Enjoy life. I outsourced a significant portion of my work to two very reliable virtual assistants in India starting in 2006. Ravi and Vikash now do that 70 or 80% for me. At $3-5/hour it is very hard to beat. Check out [...] if you're looking to out source. Search "Virtual Assistant". Once you start outsourcing, you'll never go back. 2. Locate the 20% of your customers who drive 80% of your profits: Find your top 20% customers (by profit, not revenue) and fire the rest. Yes, fire them. The goal is not to work your life away. It is to make a good living to enjoy your life. If you must work more, then list out the characteristics of your 20% customers and go out and find more of them. You will not believe how liberating it can be to fire a customer who's been a real pain in the ass. 3. Prioritize the 20% of your friends who provide 80% of your support and enjoyment: If you apply 80/20 to your relationships you will surely find that a few people in your life provide the majority of your support, excitement, laughter and feelings of connection. On the other side, there is likely another 20% group of people who account for most your sleepless nights, tears, anger and frustration. If you don't want to feel this way, stop spending time around your bottom 20. Fire them and work on duplicating your top 20. This may sound a little calous, but it's not. It's practical. The quality of our life comes down to the quality of the people and experiences that fill it. 4. Fill your life with the 20% of your experiences that provide 80% of your happiness: As humans, our two biggest priorities are to move towards pleasure and away from pain. As mentioned above, find the few people, things, places and experiences that provide 80% of your happiness, fulfillment, pleasure and excitement. Also find the things that cause you to feel the majority of your negative emotions. Focus your time on the top 20% and avoid the bottom 20% like the plague. 5. Do the 20% of your workouts that lead to 80% of your physical gains: The majority of fitness results come from a small portion of most workouts. 80% of the muscle is built in the last 20% of the reps. Crossfit is a great example. The workouts are 7-14 minutes long on average but they provide more physical benefit than most hour-long workouts. Spending more time on something is not always a good thing. If you believe your workouts must take an hour then you'll likely miss a lot more of them. What if they only took 7 minutes, but that seven minutes really tested your limits? You're likely to show up a lot more often. I know this sounds simple. But few people stop to actually do it. It is truly possible to spend the majority of your time doing the things that you love. The only way to get there is taking Pareto's 80/20 principle seriously. It will make all the difference. Do not let more than 3 months go by without performing a full 80/20 breakdown of all areas of your life (especially your personal life). It will only take a couple hours and those hours will likely save days before you know it... 80/20 in action yet again. Somewhere along the path of life, most of us were taught to associate fulfillment and worth with the number of hours spent-thinking the more the better. This has lead many of us to working aimlessly just to say we filled the day. This IS NOT the goal. The goal is be fulfilled, happy, efficient, effective and more than anything else, to enjoy life. Happiness is a daily right. It is not something we need to work our ass off for years to finally achieve. That is what Pareto stumbled on all these years ago. I encourage you to do the same.

This is the essential “go–to” book for our time–scarce, success–driven world. The 80/20 principle of Vilfredo Pareto is actually an old idea that is has become much in vogue recently with books published like “The Four Hour Workweek”. The idea is that efficiency—and success—in all areas of life can be boiled down to that essential 20% of “inputs” that makes the remaining 80% of “inputs” (people we associate with; stuff we sell; projects we do; anything that takes our time, effort or money) obsolete. Koch makes the case (rather exhaustively!) that the 80/20 principle can be applied to any area of one’s life or endeavors and that it inevitably improves things—often dramatically. The structure of the book is not ideal and can lead to cumbersome reading. The first half is an absolutely thorough (maybe too thorough?) analysis of every conceivable manifestation of 80/20 possible in one’s life. It’s a little too driven and one-dimensional, though I accept that the author believes it to be essential information to fully comprehending the subject matter. At the 50% juncture of the book, he kind of runs out of gas having exhausted every avenue of analysis and has to lard the rest of the book with other ideas, which, though interesting, are not enough to justify that much more copy. So, why still the 5-star review? In the second part of the book are several gems of knowledge so valuable that it justifies slogging through to the end. One such idea that blew my mind: the 40-Hour Workweek, 5 days a week, 40 year “typical” job that most people have nowadays has only existed for less than 200 years—a drop in the bucket in human history! (It is a byproduct of the factory schedule originating from the industrial revolution.) So, there is no reason people should assume that is the only option for employment or that such jobs will even continue to exist beyond the 200-year mark! We had all better be finding ways to succeed more with less… Buy this book, read it ALL, and start following its principles.

Richard Koch points out that he's apparently the first author to write a full-length book on the 80/20 principle. That's an astonishing gap in management education, and I've seen the consequences many times over in companies that are unable to define high-impact priorities at virtually all levels. Koch does a superb job of explaining 80/20 management, and I'd recommend--or rather *strongly* recommend--that everyone who wants their organization to prosper should buy and distribute a few caseloads of this book. Koch is somewhat less successful at extending the 80/20 principle beyond the business world. He's absolutely correct that it's a useful tool for setting personal priorities... but Koch really needs to be more helpful about how to make this happen. His present approach, even with the updating in this new edition, arguably takes away from the strong focus in the first half of the book.

Some people have cynically commented that you only need to read 20% of this book, and the rest is all repetition. Those people do not actually understand the fractal nature of the 80/20 principle - how pervasive it is, or the extent to which you really need to immerse yourself in these concepts. Their opinions are worthless. I first read this book in 2003. I got to page 14 and Richard was explaining how 80/20 is closely related to chaos theory. I suddenly had an epiphany - making realizations that weren't even explicitly stated - and realized that inside every 80/20 is another 80/20, and another and another. 80/20 is fractal! Suddenly I looked out the window and saw 80/20 EVERYWHERE - in the trees, in the street, in the carpet in my house, in nearly every column of every spreadsheet in my business. Before I'd barely seen it at all, and even then only in the rear view mirror. After, I saw it everywhere all around me. At the time I was just starting to crack the code on Google AdWords, and I realized 80/20 is the key to pretty much everything in AdWords. And in marketing itself. 80/20 became my secret weapon. It was the backbone of AdWords and I included an 80/20 chapter in my very first ebook, "Definitive Guide to Google AdWords" which eventually became Entrepreneur Press's "Ultimate Guide to Google AdWords" which is the world's #1 book on internet advertising. It also inspired my book "80/20 Sales and Marketing." Richard makes a key observation, which is the difference between 80/20 ANALYSIS and 80/20 THINKING. Analysis is backward-looking. 80/20 Thinking is forward looking. When you know, in advance, that whatever you do is going to be 80/20 and nothing you do can change that, you artificially stack the deck to favor early successes. You kill your runts faster. You search for patterns that most people miss, and shortcut months or years of failure. Richard also delves into many subtleties of how 80/20 manifests in business, and how most businesses are losing money every time they sell 20% of their product line. This is a very big deal. I'm now reading this book, 13 years later, AGAIN (not sure how many times I've cracked it) and it's still producing new jewels. Yes, you can read 20% of this book and it could still potentially change your life. But if you understand 80/20, you should read that kind of book 5 times and you can be nearly certain that you'll get 10X your time investment back every single time. When Richard starts getting philosophical near the end about this applying to relationships and whatnot, don't give in to the temptation to think he's over-reaching. He's not. 80/20 is a fundamental axiom of cause and effect, one of the great secret laws of the universe. I've read a LOT of great books but this one tops the list. It's been worth many millions of dollars to me in my career.

This book appears to be written by a smart person, but that doesn’t automatically make it a good read. The first half is repetitive, especially when applying the principle to business, while the other half, when applied to life, is overly simplistic, focusing solely on efficiency and thus lacking wisdom. The chapter on network effects is worth reading, but it would have been more impactful as a standalone article. The same can be said for the first half of the book, which might have resonated more as a long article. The final chapter, where the author addresses feedback and reviews from earlier editions -which were the same I had while reading- tries to salvage the book. However, from my point of view, it’s too little, too late. I’m giving it a three out of five, acknowledging the effort to fill the gaps and redeem himself and for the valuable insights on network effects.

An excellent book that clearly describes, not only the Pareto Rule, but how to implement it to maximize profitability with minimal effort, both in the company as well as in your personal life. While the Pareto Rule (80/20 principle) is widely know, many companies do not fully exploit its potential to grow profitability. The author, Richard Koch, describes how 80% of clients' perceived value comes from 20% of the company's activities. Also, 80% of the firm's activities yield only 20% of the profits. This brings the opportunity to optimize by reducing resources given to low profit activities and deploying them to replicate the success of the top performers. In a business that is large enough to be statistically significant, its sales, cost and profit data usually respond to a non-linear distribution that contains the 80/20 rule. For example, the top 20% of customers generate 80% of profit while the bottom 80% of customers generates only 20% of the profit. Deeper analysis of the data usually shows that about 5% of the causes (customers, business units, market segments or products) generate 50% of the profits, while the bottom 50% of causes generate only 5% of profit or revenue. Even worse, the bottom 40% usually generates no profit at all. I've successfully used the 80/20 Analysis and Strategy for years to reduce operating cost without losing any business or irritating any customers: a) Product portfolio (reduced from 1,400 SKUs to 400 SKUs) b) Customer portfolio, c) Market segment strategy d) Sales force, and distributor productivity e) New product innovation metrics."

The 80/20 principle describes a motivating theory that can be applied to virtually anything that has to do with the efficient allocation of resources. Whether the resource is money, management, time, labor, mind-share or especially happiness, the 80/20 principle provides a universal focus. The book is broken up into 4 parts. The first part is somewhat analytical but interesting. It suggests that with all things being equal, they aren't even close. It is an eye opener. The next parts, which make up the bulk of the book, apply the theory in a number of ways. Right when you think you "get it", another application or perspective of the principle is revealed. It doesn't attempt list all the applications, but it will put you on the path. The last part explains the success and failure of various approaches in social, government and economic issues with the 80/20 principle as an ever present thread. The author seems to defend the theory as neither a right-wing or left-wing ideal, rather as a natural law that should be acknowledged and exploited by everyone. The book was educational and easy to read. It is not one of those little bulleted brochure style books with large type and lots of white space that make the new executives comfortable. It is also not the 12 steps to success. As the cover suggests, it is a single but useful principle.

I thoroughly enjoyed reading this book. It definitely challenged some long held beliefs. I am personally applying the 80/20 thinking to everything I am doing. Looking for things that are wasteful and sowing into areas of strength. Definitely a must read book.

Das Buch gibt viele Denkanstösse für unkonventionelles Denken. Grossartige Beispiele und Anwendungsbeispiele. Für Unternehmer ein muss! Viele Beispiele im eigenen Geschäft anwendbar.

Received in good condition but haven't time to start.

QUESTO PRINCIPO TI CAMBIA LA VITA A LIVELLO QUOTIDIANO, PERSONALE, PROFESSIONALE LA POTETE VEDERE COME LA VOLETE : 2 NUMERI, UNA FRAZIONE, UNA FORMULA, MA DIETRO QUESTO PRINCIPO SI CELA,,, IL COME ARRIVARE AL MASSIMO TRAGUARDO, USANDO IL MINIMO/ESSENZIALE SFORZO

This book has the potential to be life-changing on everyone that is willing to pay the price of living 80/20. It is simply the best book about personal development that I have every read

Un libro que descubre un principio que todos deberiamos seguir. Ya conocía la ley de pareto pero es bueno rescatar las buenas ideas...