Small Business Development Center

Inequality Is Everywhere


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Inequality Is Everywhere


Authored by: Eric Grimstead

From 80/20 to 1% - The Power of Accumulative Advantage

Pareto's Principle

In business we often hear about Pareto's Principle, or the 80/20 rule, where you can expect things like:

  • 20% of your customers may account for 80% of your sales
  • 20% of your products/services deliver 80% of your company's profits

Have you ever wondered about where that theory came from?

Well so did I! While researching the subject, I came across this fascinating article about Vilfredo Pareto (just sort of rolls off your tongue doesn't it?) - written by James Clear who writes about habits and human potential.

It's an interesting read that explores some fascinating examples in the how even in professional sports you can see a few franchises winning the majority of championships even in times where salary caps and free agency would seem to make it a more, um...level playing field.