The Italian economist Vilfredo Pareto showed that 80% of the land in Italy was owned by 20% of the Italian population. He then developed his principle by observing that 20% of the peapods in his garden contained 80% of the peas. This is what is called Pareto’s principle: roughly 80% of the effects come from 20% of the causes.

All kinds of people and authors started to use this and applied it to almost any activity you can imagine. To give a couple of examples:

  • 80% of the bugs in a given product can be attributed to 20% of the features or code
  • 80% of a company’s sales come from 20% of its product
  • 80% of your income is generated by 20% of your effort or clients

This list is endless, google your topic in combination with “pareto” and you’ll probably find a post about it. However, you shouldn’t treat the principle as an exact formula. There is a valuable lesson in this principle about optimization though: you need to know where most of your revenue, problems, happiness, complaints come from. This allows you to figure out how to make adjustments with the biggest impact.