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The 80/20 Principle Library

Discussion in 'The Unscripted Entrepreneurial Mind' started by MTF, Jan 15, 2019.

  1. MTF
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    MTF Never give up Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    The 80/20 principle, also known as the Pareto principle or the 80/20 rule, states that 80% of the effects come from 20% of the causes. The rule applies to many aspects of life, including economics, business, sports, etc. For a quick overview, read Wikipedia's page on it: Pareto principle - Wikipedia

    I started this thread to share useful resources about this principle to help you accomplish your goals more easily - or just enjoy your life more - thanks to simplifying it via the 80/20 rule.

    This isn't just a little stupid rule stating the obvious fact - there are countless, sometimes weird, applications of it that can help achieve better results in less time and with less energy.

    1. Books

    By far the best author on the topic is British multimillionaire Richard Koch. He has written several books on the topic. The best ones are:

    The 80/20 Principle - the original book, with the first part going deep into how to apply it in business and then other parts addressing personal life and other things. Ignore the negative reviews - there's a lot of thought-provoking, and for some probably controversial, stuff in there.

    Living the 80/20 Way - offers additional insights on how to apply the principle to live better.

    After Richard Koch, the best books are:

    80/20 Sales and Marketing by Perry Marshall - some very powerful 80/20 concepts applied to sales and marketing. A must-read.

    Essentialism by Greg McKeown - I consider Richard's books better because they're written in a less philosophical and more practical style. Greg's book is still pretty good, but IMO it's better to start with Koch.

    The One Thing by Gary Keller - extremely solid concept of The One Thing, but with some unnecessary chapters which are related to the main topic, but not really talk about simplicity.

    2. Articles

    Richard Koch's blog is really good, though sometimes he gets too philosophical there: Blog

    Some of his best articles:
    HOW TO WORK LESS AND MAKE MORE
    ARE YOU A HAMSTER?
    HOW TO STOP BEING A HAMSTER
    TIME REVOLUTION
    http://richardkoch.net/2013/01/how-much-is-an-hour-of-your-time-worth/
    http://richardkoch.net/2014/09/how-to-do-nothing-achieve-everything/
    http://richardkoch.net/2018/11/liberate-yourself-from-the-protestant-work-ethic/

    A good interview with Richard:
    https://medium.com/learning-for-life/dont-waste-your-time-on-the-trivial-1a51c7dc3cc

    3. Quotes

    Here are some various thought-provoking quotes:

    “We should act less. Action drives out thought. It is because we have so much time that we squander it.” – Richard Koch

    “Slow down and remember this: Most things make no difference. Being busy is a form of laziness—lazy thinking and indiscriminate action.” – Tim Ferriss

    “Most people who become rich through business do so by using other people’s ideas, not their own.” – Richard Koch

    “Identify the times you are most happy, and expand them as much as possible. Identify the times you are least happy, and reduce them as much as possible.” – Richard Koch

    “Generally, the most profitable customers have been customers for a long time. Gaining new customers is very expensive.” – Richard Koch

    “Make the most of those few ‘lucky streaks’ in our life where we are at our creative peak and the stars line up to guarantee success.” – Richard Koch

    “Time is like that: cussed when we try to speed up, a dear friend when we slow down.” – Richard Koch

    4. Exercises

    Some exercises I regularly do, particularly when I find myself losing focus and no longer religiously following the 80/20 principle in my life. It's important to emphasize that 80/20 is a mindset that needs to be cultivated, just like you need to go to the gym regularly if you want to stay in shape.
    • 80/20 analysis - analyze what produces best results and what the biggest waste of resources is. How can you double down on what works best and eliminate the unessential stuff?
    • The One Thing question - ask yourself the main question from Gary Keller's book: What's the ONE Thing you can do such that by doing it everything else will be easier or unnecessary?
    • Eliminate something from your life - it sounds stupid, but even throwing away an article of clothing you no longer wear is a good way to remind yourself to focus on what's most important.
    • Fast for a full day - it's good for your health, and it gives you some additional clarity and a lot of time to think how to simplify your life.
    • Stop taking action - if possible, take a few days off and occupy your mind with something else. Sometimes we're too close to the challenges we're facing and we fail to see an obvious, simple solution. Your subconscious will still work on the problem in the background while you do something else, ideally something enjoyable so you can recharge.
    • Let go of control and ego - the number one obstacle preventing you from achieving more while doing less is yourself. If you want to control everything, you'll never be able to delegate effectively. If you think that you're the only person who can do something well, you'll never delegate at all - so you'll be stuck doing everything yourself. Even if you're a solopreneur and nobody can do your job, at least simplify other aspects of your life (for example, hire a maid).
    • Think of long-term profitability - focus on projects and business models that are repeatable and produce consistent, long-term income over projects that produce a one-off result. The latter makes you a hamster, stuck on the wheel of work and unable to slow down because you always need to seek a new source of income. Always have in mind your hourly rate and resist the temptation to think short-term. For example, you can spend 100 hours on a project that generates $10,000 once (your hourly rate is $100), or you can spend 100 hours on a project that generates $1000 a month forever (your hourly rate is just $10 the first month, but after 10 months reaches $100 and then still continues growing without any additional work).
    • Destroy and rebuild everything from the ground up (in your mind) - if you lost everything you have now, how would you rebuild it? This is an useful exercise to review the most important fundamentals as well as open yourself to new ideas or maybe even discover that what you're doing now is just no longer working anymore and you're stuck in the past. It's often hard to see these obvious things due to the status quo bias (in which any change from the baseline is considered a loss).
     
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  2. rogue synthetic
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    rogue synthetic * Not actually Rutger Hauer Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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  3. MTF
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    MTF Never give up Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    His writing style is horrible. It's anything but simple, but from what I managed to understand he does share some 80/20 ideas.
     
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  4. RazorCut
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    RazorCut Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Great post @MTF

    I can vouch for this one. It's always near to hand even though I bought it back in 1997.

    Another exercise to add in is walking (or running). The brain becomes so much more creative in a moving environment. You will be able to think clearer, make connections you wouldn't normally make and gain all sorts of insights that are not available to you in a static environment such as sitting at a desk or lying on a couch.

    This is not hocus pocus but scientifically proven fact. (Stanford University research report here)

    Personally I would say find a park or go out into the countryside for best results and also don't expect great insights within a few hundred yards. I hike about 4 miles a day 3-7 days a week and sometimes the most enlightening moments come a mile from home.

    Also listening to podcasts or music while walking/running doesn't kill the creative effect but I find it does dull it significantly.
     
    Last edited: Jan 15, 2019
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  5. MTF
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    MTF Never give up Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Great tip, @RazorCut. It's another good example of how doing seemingly "nothing" is in fact the most valuable activity you can do.
     
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  6. Martin Boeddeker
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  7. Martin Boeddeker
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    He has his own writing style for sure. I really like it.
     
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  8. GregDott
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    Great thread. Thanks.

    I'd never heard of this guy before. Purely the contention around his style made me curious so I checked him out. While I'm sure he must have a brain to back such a writing style, it does sound a tad ;) pompous.
     
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  9. ZCP
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    Be sure to 'set the table' ..... review information beforehand, or even better, the evening before and sleep on it. Let that subconscious work on it a while. Then stay in bed when you wake up and just think a little. Then keep it going while you exercise. You'll invent time travel in the shower that follows. Write it down, send yourself a note for when you get to your desk.

    I have conquered many of my toughest problems using this method.
     
  10. ZCP
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  11. Andy Black
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    Andy Black Any colour, as long as it's red. Staff Member Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I did this once studying for a morning exam. Before bed I couldn’t make head nor tail of one particular problem. When I woke it was clear as day.
     
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  12. Andy Black
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    I agree with this. One of my most productive years was when I went for a walk every evening. If I had a two hour window to work that evening, I’d spend 45 minutes of it going for a stroll, and then do the right thing when I got home.


    I don’t know what it’s like in other countries, but when someone asks how things are going here in Ireland and the UK then most people say “Busy!” .... as if that’s the metric to measure against.


    Two quotes I love from Blaise Brosnan are:

    “The market doesn’t pay for activity.”

    “You can’t invoice for input.”

    No point being a busy fool, doing he wrong side of the 80/20, and doing the same thing all the time expecting a different result.


    I love Perry Marshall’s book, and James Schramko’s book “Work Less. Earn More.”

    In Jame’s book he encourages people to “spend an hour a day staring at the sea” (he’s a surfer, so choose your poison).


    And the principle behind The ONE Thing is so helpful too: What ONE Thing can you do that will make everything else unnecessary or easier? If you don’t know it, then finding it IS your ONE Thing.


    It also comes back to “Your desk is for executing, not thinking.” (Justin Jackson)

    And that “Thinking is the hardest thing to do, which is why so few people do it”. (Henry Ford)
     
  13. Andy Black
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    Andy Black Any colour, as long as it's red. Staff Member Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    100%. If you're always listening to “informative” podcasts then you can't hear yourself think. Often the answer is already within you.
     
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  14. Martin Boeddeker
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    He is one actually my favorite authors. I've never seen someone thinging as clearly and seeing the world so accurate as Taleb does. He was able to articulate the things that I knew intuitively were right but was never able to express on my own.

    Mainly:

    - The world is far too complex and we will never the full picture that's why we should look at what survived.
    - A lot of things that scientists discover in a lab DO NOT translate into the real world. Often times is far more useful to look ancient wisdom
     
  15. LuckyPup
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    Was that a finding of the study, too, or was that in your experience only? (Yes, I'm too lazy to read the study right now.)
     
  16. MTF
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    MTF Never give up Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    That's also why studying a little every day is better than studying a lot one day prior to the exam. The brain memorizes information (and I assume that processes it better for problem solving, too) when we're asleep. I guess that's where the phrase "let me sleep on it" comes from.

    When people brag how busy they are, I can't help but think that they've lost their priorities in life (if they had them in the first place). There are soooooo many things we don't have to do at all. And that's what's controversial about the 80/20 principle: many people think that those who do little are lazy, even if during one hour they generate much more output than a person working 12 hours.

    I considered mentioning his book, too, but in the spirit of the 80/20 decided against it because while it's good, it's not a must-read like the other books I mentioned.

    It's uncomfortable, too, because it feels like you're wasting your time while you should be taking action. Which made me remember this post by Richard Koch: TOP 10 – 9 OF 10 : THE PLOTINUS PRINCIPLE

    And particularly the most practical implications for everyone posted at the end of this article:
    1. Act less, think more.
    2. Allow plenty of time for quiet reflection every day. Make this a habit, in a particular place, at a particular time.
    3. Await insight.
    4. Hone your powers of intuition – by trying less, and opening yourself up to the universe more. Intuition comes in when you let it.
    5. Try to become the best possible version of yourself (the exact words I owe to Matthew Kelly – thanks, Matthew). This is not just a matter of opening your soul. It is also – more importantly – a matter of opening your mind, and seeking the most simple, unifying answer.
     
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  17. MTF
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    Regarding the 80/20 analysis, one of the exercises I like the most that Richard Koch shares in one of his books is identifying your happiness and unhappiness islands and achievement and desert islands.

    He explains it well here: WHAT ARE YOUR HAPPINESS & ACHIEVEMENT ISLANDS?

    In short:

    And as for achievement islands:

    It's a very useful exercise to begin simplifying your life for more happiness and productivity.
     
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  18. Andy Black
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    Some rules of thumb from the 80/20 principle are that:
    • 20% will pay 4x as much (from Perry's book)
    • 10% will pay 10x as much (James Schramko mentions this a lot. Whether it's derived from 80/20 or not is irrelevant... 80/20 is a rule of thumb anyway.)
     

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