Introduction
If you've taken business classes, you probably know Pareto's law. It says that 80% of effects come from 20% of causes, and in practice that 20% of efforts often generate 80% of results.
Intuitively, this pushes you to focus on what's essential: the few actions that actually matter. But what we'll see here is that this law is even more powerful than it seems, and it can transform much more than just how you work.
A reminder on Pareto's law
Pareto's law is named after Vilfredo Pareto, an Italian economist from the late 19th century. He observed that in England, around 20% of owners held 80% of the wealth. What struck him is that this distribution appeared in many countries, with surprisingly similar proportions.
A few decades later, the engineer Joseph Juran showed that this principle also applies well to certain areas of business management. For example:
- 20% of products generate 80% of revenue,
- 20% of the effort completes 80% of a project,
- 20% of customers generate 80% of profit.
Mediocristan and Extremistan
To understand when and how to apply Pareto's law, we need a detour through Nassim Nicholas Taleb's work. He distinguishes two very different statistical worlds: Mediocristan and Extremistan.
Mediocristan
Mediocristan is the physical world. Extremes stay close to the average. Human weight, tree height in a forest, animal size... these are relatively bounded. A few outliers do not meaningfully influence the whole.
In that world, Pareto's law applies very poorly. There isn't 20% of trees that represent 80% of the wood in a forest.
Extremistan
Extremistan is a world where extremes dominate. A few elements can have a massive impact compared to the average. This applies to:
- wealth distribution,
- book sales,
- city size,
- online audiences,
- value creation in tech companies.
In Extremistan, Pareto's law becomes extremely relevant. And our modern world, increasingly digital and globalized, looks more and more like Extremistan.
Apply Pareto at work
The more a domain moves away from physical constraints, the more it shifts into Extremistan.
In B2B, for example, it's very common for 20% of customers to represent 80% of revenue. So it makes sense to focus most of your effort there.
In B2C, on the other hand, physical human limits make this logic much less relevant. One person can't buy an infinite number of clothes or phones.
In intellectual work, Pareto's law is often very strong. In a technical team, it's common for 20% of people to produce 80% of the value. In writing, 20% of a report often creates 80% of its impact.
That implies one essential thing: prioritize better.
This logic connects directly to other levers of effectiveness like reducing decision fatigue or explicit communication.
Self-discipline in Extremistan
The problem is that our brains are wired to understand Mediocristan's linear world. We struggle to reason in exponential effects.
As a result, we tend to spend as much time on low-impact actions as on the ones that are truly decisive.
To counter that, one effective solution is to set artificial constraints:
- short deadlines,
- limited work blocks,
- accepted social pressure.
Those constraints force you to focus on what's essential and concentrate effort on what matters most.
The barbell strategy
Living in Extremistan also means living in uncertainty. Rare, unpredictable events can have huge consequences. That's what Taleb calls black swans.
The barbell strategy is about structuring your life to:
- protect yourself from negative black swans,
- expose yourself to positive black swans.
The principle
The idea is simple:
- spend around 80% of your time, energy, or resources on very low-risk activities,
- spend around 20% on very high-risk activities, with high upside.
You want to avoid the middle zone at all costs: moderately risky activities that expose you to big losses without real exceptional upside.
Concrete examples
Investments
A classic approach is to put most of your savings into very safe assets, and a small part into much riskier investments with high potential. The goal is not to avoid risk, but to concentrate it where the risk/upside ratio is asymmetric.
Career
Sometimes you can secure a stable base, for example a part-time job, while dedicating a riskier portion of your time to a personal project, a training program, or an entrepreneurial activity.
Marketing and business strategy
A company can secure most of its growth with reliable, proven levers, while dedicating a small part of its efforts to testing new, original, or experimental channels.
Personal life
The barbell strategy can also apply to your social life. Spend most of your time with trusted people, while occasionally allowing yourself new, unpredictable, even uncomfortable situations that can lead to major encounters or opportunities.
Use uncertainty to your advantage
The goal is not to eliminate uncertainty, but to make it an ally. By structuring your life with this logic, you limit potential losses while keeping the possibility of outsized gains.
This approach naturally complements the other principles in this training, especially automating repetitive tasks or the two-minute rule.
Less scattering, more impact, and above all a better ability to take advantage of rare but decisive opportunities.
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