Vilfredo Pareto was born in Italy. 

He was a terribly good observer, this guy. He noticed 80% of the land in Italy is owned by 20% of the people. 

He started to observe the same pattern in a lot of other situations.

After realizing this, he came up with the 80/20 rule, also known as the Pareto principle.

In one sentence, 

80% of the effects come from 20% of the causes.

(I get it smartypants, these numbers don’t necessarily apply to everything, sometimes, these are indicators.)

How do you make this work for you?

First. 
Analyze so you know this is happening.

Tim Ferris, the author of 4 Hour work week, talks about how he analyzed this at his job.

He says some of the customers were good. And obviously, some were toxic. The good ones paid on time, spoke politely and had a good effect on his mental well-being.

The bad ones, he had to follow up asking for payments, they spoke rudely, abused on calls and made a bad impact on his mental well-being. 

When he learned about the 80/20 rule. He analyzed this. He observed 80% of revenue was coming from a set of 20% products or 20% customers.

So, first, analyze your scenario, make a list of things going on in your life. 

List of works, list of clients, list of tasks, and whatnot. You get it. 

If you’re an investor. Notice how some stocks are hitting it off and some don’t.

Second. 
Sort out the best 20%

What are the things giving you the most results and happiness?

What are the things causing stress and unhappiness?

After Tim Ferris analyzed, he realized how this all was going in his work. He made a list of the best customers he had.

So, Second, figure out the 20% of things in your list with maximum impact. 

Third. 
Understand the best 20% and make them 80% (or rather 100%?)

Tim understood the best customers he had. There were very few of them. Now, he made a clear understanding of what made them amazing. He looked at their persona, he looked at their company, location, age, and other similar stuff. 

Results? 

What did Tim realize after implementing this?

He was much happier and getting better results. 
The toxic customers were out and now, he concentrated all his efforts on getting the good ones. Within a span of a few months. It all turned around for good.

While I was researching this. I found a medium story, which gave amazing examples about the idea.
 
80/20 Rule Examples:

80% of problems originate from 20% of projects.
60% of your distractions come from 40% of sources.
70% of customers only use 30% of software features.
90% of complaints are made by 10% of users.
80% of the value is achieved with the first 20% of the effort.
85% of the important conversations are from 15% of the emails.

How am I trying to follow the 80/20 rule?

My marketing strategy.
I’ve realized in the past few months, the best clients I've had are from the Psychology and Mental Health niche. So I’m gonna put a hold on marketing towards SaaS and focus on this niche for a while. 

My investment strategy.
I’ve a diversified portfolio of stocks. And, I’m glad it is. So when one industry is failing there’s always another balancing the portfolio. Yet, I’m observing a few patterns that are working well and some are not.

My productivity strategy.
You know what kind of a productivity geek I am. So I'm not going to start about this right now. Saving it for another day.

*Inviting Tim Ferris for a quick reminder*

"Slow Down and remember this: Most things make no difference. Being busy is a form of laziness-lazy thinking and indiscriminate action.

Being overwhelmed is often as unproductive as doing nothing, and far more unpleasant. Being selective-doing less-is the path of the productive."

Till next time,
Noman Shaikh.




P.S. We've heard a lot about the morning routines, What about nights? Simple, Quick and Easy Night Routines That Will Make Your Mornings (And Life) Better


P.P.S. Here’s what a weird crime scene taught advertisers about the psychology of decision making.