Are Start-ups Pareto Plants?
Does Pareto Principle apply in entrepreneur’s life?
I am sure engineer entrepreneurs must know what a Pareto Principle is but for the sake of others, I will define it:
Pareto Principle states that 80% effect comes from 20% of the causes. So for example it could mean that 80% profit comes from 20% of customers.
The rule of thumb was made by economists and may not fit perfectly in every scenario but the intent of the rule is clear. When you are doing something, a lot of your efforts are going to be wasted until you figure out the right way to do it and then your efforts will start generating real value. Here by ‘right way’ I mean the way that works both for you and the markets.
So what does that tell us? It tells us to not feel too much distressed when things are not working out. Once you have completed the quota of 80% not working ways, eventually you will figure out what will work. But for that you have keep putting efforts.
Like Vinod Khosla says, “I just took too many shots at the target.” And that is what made some of the shots hit right where they should!
Here I have made a chart of growth of Pareto Plant from the day of planting the seedling against the watering of the plant. One day the plant will bore fruits and flowers. (Pardon me for messing around!)