80/20 Fractal Report!

Perry Marshall, Bryan Todd,!& Sunny Hills!

I: The 80/20 Rule!Recommended

reading:!The 80/20 Principle by

Richard Koch!

The 80/20 Rule: Fractals!Sierpinski Triangle!

The 80/20 Rule: Fractals!•  You find the same behavior patterns again

& again, just at bigger or smaller levels of your business!

The 80/20 Rule!•  The Bell Curve vs. the “Skew Curve”!

The 80/20 Rule!

•  Line people up in order according to how they spend & you’ll always get the “Skew Curve”!

The 80/20 Rule!•  The numbers “80” and “20” are not gospel!– Some relationships are 60/40, 95/5, etc.!– Some proportions are odd: 50/10, 90/40, etc.!– People mistakenly argue that it’s “always

80/20” … or that 80/20 is false because you don’t always see those exact numbers!

•  Nevertheless, your numbers always reflect some kind of “Skew Curve” or “Power Curve”!

The 80/20 Rule!•  Raw nature is unequal & unfair!•  Most civilizations exist to “fight” 80/20 &

create some measure of equality!– Reversing parts of that is a key to success!

•  The effective stuff is 16x as productive as the ineffective stuff … Why?!

Later: Malcolm Gladwell & Tipping Points!

The 80/20 Rule!•  80/20 operates in layers!– 80% of sales come from 20% of your

customers!– 64% of sales come from 4% of your customers!– 51% of sales come from 0.8% of your

customers!– 41% of sales come from 0.16% of your

customers!!

The 80/20 Rule!•  80/20 shows up everywhere in Google!

The 80/20 Rule!•  80/20 operates in multiple dimensions: !– Customer behavior in a month!– Customer behavior over time!– Product sales!– Product profitability!– Product development cycles!– Vendors!– Referral sources!– Etc.!

The 80/20 Rule!•  80/20 also applies to problems:!– Problem customers!– Problem employees!– Problem products!– Problem keywords!

•  Who – or what – is the single biggest frustration or irritation you constantly deal with? !

The 80/20 Rule!•  Nancy’s coin boxes:!–  A simple way to use

80/20 to solve expensive systemic problems!

The 80/20 Rule!•  “Good enough is good enough”!•  80/20 defines an ascension process for

customers!•  80/20 is the #1 source of enormous

leverage in everything you do – learn to recognize 80/20 leverage in all situations and all spheres of life!!