Out of more than 120 wholesale customers, a mere 5 were bringing in 95% of the revenue. I was spending 98% of my time chasing the remainder. – Tim Ferriss, Four Hour Work Week
What it is:
Most of us are familiar with the Pareto Principle. 80% of your sales come from 20% of your clients. 20% of people produce 80% of your enjoyment and propel you forward. But 20% produce 80% of your anger too.
A few factors have disproportionate influence.
Some of us are also familiar with Pareto’s more extreme cousin – the power law.
But fewer of us make the jump to its immediate corollary – the Minimum Effective Dose (MED).
I first came across this in Tim Ferriss’ books. He defines it as “the smallest dose that will produce the desired outcome”.
The logic goes – if 20% of tasks produce 80% of the results, then you need to focus only on this 20%. In most avenues of life, where perfection is not the goal, this 20% is all you need to be effective.
This was one of the big ideas of 2015 for me. It transformed how I think. See more here.
- MED in business: Whether your customers, your vendors, or your advertising – choose the few that give you the most value, and forget about the rest.
- MED in writing: Don’t use the passive voice. Use simple words and sentences. Scott Adams shows the way.
- MED in marketing: See Neil Patel’s guide to apply the 80/20 principle to your marketing. Or instead, just follow Andrew Chen’s guide – There’s only a few ways to scale user growth, and here’s the list.
- MED in daily productivity: What’s the no. 1 most important task of your day. Do that first. (“Minimum Viable Day”, anyone?).
- MED in health: Stop eating white carbs. See Tim Ferriss’ slow carb diet, or Gary Taubes’ Why we get fat. (But maybe I’m oversimplifying – I’m not a health expert).
Rules to follow:
- Identify which tasks have the most impact on your objective.
- Focus on them. Forget about the rest.
This suddenly reminded me of Warren Buffett’s Two List strategy.
- What I Learned from Reading 6,000+ Articles in the Last 52 Weeks: Where I attempted to arrive at an MED of whatever I’d learnt in 50 issues of the newsletter. Be warned – it’s a rabbit hole of rabbit holes.
Linked to: Power Law, Parkinson’s Law
Filed Under: Economics, Business & Investing, Productivity