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Mental Models
Featured Models

The Pareto Principle

Kill perfectionism, get more done, increase your return on investment and so much more, with this simple and incredibly powerful mental model.  The Pareto Principle suggests about 20% of your activities will account for about 80% of your results.  FINDING THE 20 THAT DELIVERS THE 80. Also known as the 80:20 Rule or 80:20 Principle, The Pareto Principle would predict that: 20% of your clients account for 80% of your income 20% of the bugs in your new app account for 80% of the crashes 20% of your pitch will make 80% of the impact on your audience  20% of your products will generate 80% of your profit NOT ABOUT THE NUMBERS. In reality, the exact numbers will not pan out exactly, they serve more as a guide than a mathematical rule. Instead, use this model to identify:  The vital few, or the small number of causal factors that account for the bulk of a problem or situation The useful many, the large number of remaining factors that collectively contribute a small amount of the problem or situation LEVERAGE IMBALANCE.  This Mental Model is a reminder that inputs and outputs are rarely balanced, and is an inherent call to action to prioritise your effort and resources to take advantage of that fact. IN YOUR LATTICEWORK. The Pareto Principle is a powerful prioritisation tool and possibly one of the most versatile models you'll find. Plus it combines well with many other models, so is an important addition to your Latticework. In fact, if you were to apply The Pareto Principle to Munger's Latticework of Models, this would be a model to make the '20' that delivers the '80' of your impact. Yes, I know, that was getting pretty meta, but the point is this model is important. You could combine The Pareto Principle with Parkinson's Law, as you identify high-value actions to Timebox; it's behind much of the advice captured in Patil's Project Principles; use it to prioritise as you communicate to high-level stakeholders using Minto's Pyramid; combine its understanding of imbalance with Probabilistic Thinking to gain a stronger understanding of complex situations.  The list could keep going because there are countless opportunities to apply and combine this model — adopt it and quickly see how it becomes one of your most-used models. 

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