Vilfredo Pareto and the 80/20 Rule Pareto was an Italian economist who noticed that 80% of the land in Italy was owned by 20% of the population.
Hence the Pareto Principle, commonly known as the 80 /20 rule, was born.
It turns out, the 80 /20 rule holds true for more than just land ownership in Italy.
It holds true for almost anything you care to think of.
Some examples:
- 80% of a company’s profits come from 20% of its customers.
- 80% of road traffic accidents are caused by 20% of drivers.
- 80% of software usage is by 20% of users.
- 80% of a company’s complaints come from 20% of its customers.
- 80% of wealth is owned by 20% of people.
- Woody Allen even noted that 80% of success is showing up.
In other words, the Pareto Principle predicts that 80% of effects come from 20% of causes.