80 20 PRINCIPLE EXAMPLES HOW TO

80 20 PRINCIPLE EXAMPLES HOW TO

Being intelligent and hard working did not.Īnd here’s angel investor Naval Ravikant echoing this sentiment on his podcast, How To Get Rich: Every Episode : Acting on a few key insights produced the goods. It was best to be cunning and focus on results rather than inputs. It was better to be in the right place than to be smart and work hard. The Pareto Principle makes it clear that *what you work on* matters far more than how *hard you work.* To Koch, it’s simple: Do more of the stuff that works and less of the stuff that doesn’t. Thus for all practical purposes, four-fifths of the effort-a dominant part of it-is largely irrelevant… Every person I have known who has taken the 80/20 Principle seriously has emerged with useful, and in some cases life-changing, insights. Taken literally, this means that, for example, 80 percent of what you achieve in your job comes from 20 percent of the time spent. The 80/20 Principle asserts that a minority of causes, inputs, or effort usually lead to a majority of the results, outputs, or rewards. Here’s an excerpt from Koch’s book, The 80/20 Principle: If you can put more energy into the 20% that gives you 80% of the outcomes, you’ll get much more accomplished in less time. In the same way, Koch explains that the best results in life come from only a handful of causes. He only needed to study the 20% that was bound to show up based on history. Remember, Koch didn’t have to study 100% of the material for his exams. For this reason, it’s also known as the 80/20 rule. The Pareto Principle states that 80% of outcomes come from 20% of all causes or possible factors in any given event. He aced his tests and graduated with top honors from Oxford, all thanks to the Pareto Principle. So, he studied those six for each test and assumed that those topics would appear on his exam if history were to repeat itself.Īnd they did. He went through the old papers from 20 years of exams and found that there were about six topics per exam common among all the papers. He could use the Pareto Principle to learn only a handful of topics and still ace his tests. He realized that he was looking at his exam prep all wrong. He didn’t have enough time to study 50 questions times 11 exams - or 550 topics!īut, as luck would have it, he stumbled across a book called The Course of Economic Theory, written by Vilfredo Pareto. During each exam, he had to answer 3-4 of those questions with detailed long-form essays over three hours. Koch had 11 exams in total, all of which had 50 questions. He recounts this story in an interview on The Tim Ferriss Show. He just didn’t have enough time to study for them. The most important exams of his life - the ones that would determine whether or not he would graduate from the prestigious University of Oxford - were fast approaching.

80 20 principle examples