Startups - who by definition are starved for resources - would do well to apply the Pareto principle to everything they do.From Wikipedia:
- It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients."
- It also applies to a variety of more mundane matters: we wear our 20% most favoured clothes about 80% of the time, we spend 80% of the time with 20% of our acquaintances etc.
- In business, dramatic improvements can often be achieved by identifying the 20% of customers, activities, products or processes that account for the 80% of contribution to profit and maximising the attention applied to them.
- The idea has rule-of-thumb application in many places, but it is commonly misused. For example, it is a misuse to state that a solution to a problem "fits the 80-20 rule" just because it fits 80% of the cases; it must be implied that this solution requires only 20% of the resources needed to solve all cases.