The 80-20 Principle

The 80/20 Principle describes the tendency for inputs to be disproportionate to the resulting outputs. For example, 80% of the revenue made by a company often comes from only 20% of their products. The opposite is also then true. 80% of the products made by a company often only generates 20% of the revenue. To apply the principle, we should then strive to invest our resources only on the 20% that provides the greatest value, and avoid investing resources in the 80% that provides little value.