We live in an 80 / 20 world. In most major areas of economic life, it is a fact that 80 percent of the value is created by 20 percent of the participants. Most startups fail, a few make billions. Most products fail, a few become block busters. This can be applied within a business all the way down to the order and line line. A few customers, a few orders, a few products… a few opportunities create most of the value.
In fact, this trend is only accelerating as digitization advances. We’re seeing an even more intense form of the 80 / 20 allocation in the form of winner take most markets. Google’s organic search results are a great example of this. We’re going to rank every website that is possibly related to your term and show them in order. First gets 60% of the clicks, next gets about 25%, third place around 10%, bottom of the first page gets 1%. Anything after that is consigned to oblivion. That’s not an 80/20, that is closer to a 64 / 4 or a 51 / 1. A brutal second or third derivative of the 80 / 20 concept.
It’s not just Google. The same dynamic applies on Amazon. Or LinkedIn and Monster.com. Facebook. Tinder and dating sites. Any place in the economy where infinite players can compete for a finite resource. Like Highlander, there can be only 1 (top result).
This doesn’t just affect companies. It affects your career and social partnerships.