Understanding of Pareto distribution can be a key to unlocking your potential for success. It is such powerful knowledge!
If you work in a corporation then you have likely heard the term Pareto distribution or Pareto principle. The term is often used to explain how 80% of the work is done by 20% of the people in the company or a department.
Yes, in any group activity where the output is dependent on human effort, it is observed that about 80% of the work is produced by about 20% of the people.
That’s Pareto distribution. It’s also known as 80/20 rule.
It is called Pareto principle because this phenomenon was first observed by a man named Pareto, Vilfredo.
Another variant of Pareto distribution that is more nuanced states that in any productive endeavor, half of the work is produced by 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 people. But in a group of 100 people, half the work is done by only 10 people!
As you increase the group’s population the ratio becomes worse. In a group of 1000 people, half the work is done by only 30 people! For 10,000, it is 100!
You get the idea.
It is to be understood that the larger the span, the more accurately Pareto distribution ratio plays out. Smaller groups are relatively easy to control, and as such large disparity of output becomes quickly evident and corrections can be applied. But for a very large group where controls are difficult to apply, the ratio plays out better.
And in the nature where there is no human intervention, it must play out perfectly.
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 at 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. Vast number of musical hits come from a tiny number of musicians. Highest grossing films are concentrated among a tiny number of film-makers. Most expansive paintings are form a tiny number of artists.
Not only that… In the universe, out of the total mass of all planets and stars, the tiny number of giant bodies comprise most of the mass. That’s Pareto distribution in the universe!
It’s like an underlying law. Like, we are living inside some kind of a computer simulation and Pareto principle is embedded in the coding of the simulation that is the universe.
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 world’s 8 richest people have the wealth equivalent to combined wealth of the bottom 50% of the human population.
Is that kind of inequality bad? It seems so, yes! But it’s not the fault of capitalism, or because those people are evil exploiters. That kind of inequality emerges because of Pareto distribution.
No matter what political and moral system is followed, the distribution of wealth will end up in accordance with Pareto principle. As said earlier, not only in distribution of wealth, Pareto principle plays out across all domains, and beyond human endeavors.
What does Pareto distribution mean for your success?
If you think about it carefully, for a tiny number of people so shoot to huge success their effort-reward ratio must improve gigantically over time. For example, with the same amount of effort that Bill Gates expended to earn his first dollar he must be earning tens of thousands of dollars at his peak. What that means is, as you grow rich, you attract more riches.
If you’re into pick-up artistry… The effort it takes to pick up every additional woman will go down. Your first approach will demand huge effort. But your fiftieth approach will be a lot easier and with higher probability of success with the women.
Over multiple iterations of the same process, the requirement of efforts goes down and the probability of success goes up. Success rate increases.
The point I am trying to drive home is: Once you to hit success in one thing, another success just gets more likely.
We often hear that rich grow richer, and poor grow poorer. That’s due to Pareto principle. Success breeds more success. And failure breeds more failure.
This phenomenon is also described as Matthew principle. Because Matthew 13:12, the Bible: 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.
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. Because you can’t. Start with tiny goals that you can achieve. Get the taste of success, if by achieving relatively easily achieved goals.
Because it’s a law that success breeds more success.
You don’t get women. You are fat. You are a laughing stock in your social circle. You are addicted to smoking. You are a massive failure. You need to fix your life in a big way. But you can’t. You are at the bottom rung of life. You are the victim of Pareto distribution.
But it’s a law that success breeds more success.
You can’t fix everything. It seems impossible. But you can fix 1% of one of the things. And if you set that as your goal, you can succeed at it.
Once you taste that success, you would feel motivated to take the next tiny step and succeed again.
With patience and consistency, you can lose fat and start looking good. It would fuel your motivation further and before you know it you will be able to take bigger steps.
You will start working out in the gym. Working out is a keystone habit; meaning it forces other good habits. You will feel compelled to reduce smoking for it hinders your workouts. You will start eating better because it will help gains from your workout. That’s the power of keystone habit.
You will start looking good. That will develop your interest in style. Earlier with ugly looks there was no point taking interest in style. But now you can improve your style to further enhance your looks. It will get women interested in you. Being good with women will earn respect from your peers…
Do you get the drift?
Your problems may be different. But that is essentially how it works. Success breeds more success. It’s a law.
Pareto principle is a guarantee that once you start putting in work, remain consistent, and achieve small bits of success, over time your success will snowball into bigger success… and there is no limit to how far you can go. Because it is built into the code of the universe!
The key is to remain consistent in your endeavors and self-improvement.
Most people lack motivation and consistency because they aim too high and get disappointed too soon. They haven’t understood the mechanism of 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 cheatcodes that only a tiny minority of people have.
You have a key to success now.