Forget the 80/20 rule. Focus on the .001%.
Why? We live in a world of Hyper Paretoism, where Walmart is 12.4M times larger than the average US business and the richest 1% control 40% of the world's wealth.
The Pareto Principle is dead. 😢
Long Live Hyper Paretoism! 😱
What the hell is Hyper Paretoism?
This 👇🏼
Bernard Arnault is:
- 61M X richer than the average Indian.
- 7.4M X richer than the average Chinese.
- 1.73M X richer than the median US household
Walmart has 2.3M employees.
The average US business has none.
Walmart is:
- 12.4M times larger than average US businesses
- 271 times larger than smallest Fortune 1,000
- 89 times larger than smallest Fortune 500
- Twice as large as the Fifth largest US company
Forget the 80/20 rule.
Focus on the .001%.
It turns out that Hyper-Paretoism is actually just a feature of a Pareto distribution, which is similar but different than the Pareto Principle. See the video for details
We live in an era of hyper-Paretoism where the impacts from the extreme .001% edge cases overwhelm the averages.
I discovered the importance of edge cases when working on a 9-figure modernization project at FedEx.
We'd migrated all but 300 of our 5M+ customers to the new system. Everyone was ready to declare victory. Three years later they were still working to address all the crazy but critical edge cases required to deal with the largest .0001% of their customers that represented >30% of the company's revenue.
Everywhere you look, incredibly small numbers of people, countries, regions, universities, etc. drive massive impacts compared to everything else.
- Census tracts containing just 1.5% of the US population saw 26% of America’s total gun homicides.
- 1% of patients drive 27% of healthcare costs in US.
Whether you are involved in sales, sustainability, software development, public policy or product management, ignore the edge cases at your peril - as solving these <1% scenarios can drive massive:
- Upsides
- Downsides
- 80/90% of your complexity and costs
In fact, I developed I the Minimum Viable Replacement framework to address the challenges companies face when attempting to modernize systems and migrate their largest customers. ( See link in comments to article.
Since, then I've come to realize the role hyper-Paretoism plays across everything from replacing people with AI and robotics to decarbonizing the electrical grid.
If you are interested in innovation and driving change, it's imperative that you understand the how to design with the 1% in mind, so follow me if you want to learn how.