The Pareto Lifestyle

The Pareto Principle or “law of the vital few” is about the unequal relationship between inputs and outputs where “80 percent of consequences come from 20 percent of the causes.”

You’ve probably heard about this in some economics class.

The 80/20 rule is also known to follow a power law, the term that VCs love to use to describe the fact that it’s ONE company that returns their whole fund (at least that’s what happens to the very good VCs.. average ones only strikeout or hit singles and doubles).

This suggests that almost nothing is worth it, even though it looks like a lot of things are pretty interesting.

In fact, I actually think that it’s not even 80–20 but more like 95–5. 95% of the good things that have happened in my life have come from 5% of what I do.

That’s an insane thought!

And what’s crazier is that so few people integrate it into their strategy even though it’s applicable across the board, from business to personal life.

When you begin to look at the world from a Pareto point of you, you find it’s actually both very reassuring and terrifying.

Reassuring because almost everything isn’t worth it, so you might as well forget about it.

Terrifying because how do you find out what’s actually that powerful 5%?

Is it really obvious at first?

No. I am often surprised by what ends up being important.

Should I take a new meeting or focus on my existing projects?

Most new meetings may not lead to anything but once in a while one leads to a lot. So should I just take new meetings all day?

Hence the dilemma.

I think the solution is to make room for serendipity in your week but to focus the lion’s share of your efforts on what your intuition tells you is the most important thing you already have going on.

A balanced strategy. Also to ruthlessly cut new initiatives as soon as you realize they aren’t going to produce important results.

And to be aware of which (presently) small part of your life seems to be gaining importance and momentum. Maybe that’s going to be your new 5%.

Maniacal focus, pressing hard on what is most important, but taking the blinders off once in a while, looking around and keeping an open mind about changing strategies.

A delicate balance.