Pareto distribution: your key to success
Remember this like a mantra: success breeds more success.
Let’s talk about Pareto distribution in this post. An understanding of Pareto distribution can be a key to unlocking your potential for success. It is such powerful knowledge!
When I realized the implications of Pareto distribution after watching the following video clip, it blew my mind. So get ready to have your mind blown!
Pareto distribution – meaning
If you work in a corporation, you have likely heard the term Pareto distribution. The term is often used to explain how 80% of the work is done by 20% of the people in a company or department.
Yes, in any group activity where the output depends on human effort, it is observed that in a large enough group, about 80% of the work is produced by about 20% of the people. That’s Pareto distribution. It’s also known as the 80/20 rule. The rule is that roughly 80% of the effects are from 20% of the causes.
The principle
Now let’s zoom in on the principle at work that produces this kind of distribution. The Pareto principle states that in any productive endeavor, half of the work is produced by the square root of the number of people involved in the activity. That means, in a group of 10 people, half the work is done by 3 (30%) people. But in a group of 100 people, half the work is done by only 10 (10%) people. In a group of 1000 people, half the work is done by only 30 (3%) people. For 10,000, it is 100 (1%). You get the idea.
Pareto distribution is not limited to corporations. It is widespread across all domains of human creativity and talent. And even beyond human endeavors, it is observed on the scale of nature and the universe as well.
Most wealth is owned by a tiny number of rich people. In the game of football, out of the total number of goals scored, most are scored by a tiny number of star players. A vast number of musical hits come from a tiny number of musicians. The highest-grossing films are concentrated among a tiny number of filmmakers. The most expansive paintings are by a tiny number of artists.
Not only that, but in the universe, out of the total mass of all planets and stars, a tiny number of giant bodies comprise most of the total mass. That's the Pareto distribution in the universe.
It’s like an underlying law, as though we were living inside some kind of a computer simulation, and the Pareto principle is embedded in the code of the simulation!
The cause of inequality
The Pareto principle is the cause of inequality. And since it’s a law that is so prevalent, inequality is inevitable. It creates inequality by propelling a tiny minority of people to the top while thrashing the majority towards the bottom. That is why the world’s eight richest people have wealth equivalent to the combined wealth of the bottom 50% of the human population.
Is that kind of inequality bad? It seems so, but it’s not the fault of capitalism, or because those people are evil exploiters. That kind of inequality emerges because of the Pareto distribution.
No matter what political and moral system is followed, the distribution of wealth will end up in accordance with the Pareto principle. As said earlier, not only in the distribution of wealth, the Pareto principle plays out across all domains and beyond human endeavors.
The guarantee of success
According to the Pareto distribution, about 20% of people will achieve 80% of total human success. Are these 20% selected randomly? No, and therein lies the powerful insight. You’ve just understood the design of the universe. You learned the pattern. This knowledge is powerful because it’s the assurance that if you make the right moves, then owing to the underlying law, you are bound to get to the right side of the Pareto distribution, i.e., the 20%!
Think about it carefully. For a small group of people to achieve enormous success, their effort-to-reward ratio must improve dramatically over time. For example, with the same amount of effort that Bill Gates expended to earn his first dollar, he must have earned tens of thousands of dollars at his peak. What that means is as you grow rich, you attract more riches.
Over multiple iterations of the same process, the required effort goes down and the probability of success goes up. The success rate increases. The point I am trying to drive home is that once you hit success in one thing, another success just gets more likely.
We often hear that the rich grow richer and the poor grow poorer. That’s due to the Pareto principle. Success breeds more success. And failure breeds more failure. This phenomenon is also described as the Matthew principle.
Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them. —Matthew 13:12
Here’s the crux of it for your success: in order for you to achieve massive success, you have to start to succeed. Don’t look at the mountain and think you can’t climb it. Start with tiny goals that you can achieve. Get the taste of success, if only by achieving relatively easily achieved goals.
Start with small success and continue the series of successes until it becomes a snowball that keeps getting bigger with its own momentum and with less and less effort from you. Because it’s a law that success breeds more success.
Remember this like a mantra: success breeds more success.
Start small and start today. Combine this knowledge with Scott Adams’ systems approach and you will have the cheat codes for success that only a tiny minority of people have.
You have the key to success now.