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The 80/20 Principle – Richard Koch

Prior to reading this book, I was aware of the 80/20 principle applied to business although this book took the principle to a different level relating it to achievement and happiness in life.

I highly recommend skipping to sections of the book that relate to your personal situations, as the title suggests you will most likely receive 80% of the value from 20% of the book.

  1. The 80/20 Principle Defined
  2. Be Unconventional
  3. Finding Enjoyment in Work
  4. The Subconscious Mind
  5. We Lack Joy Not Time
  6. Network Companies

The 80/20 Principle Defined:

  • About 20% of inputs result in 80% of the results in any area (business, happiness, achievement)
  • Identify the small amounts of time that have attributed to a large amount of happiness and achievement.
  • Identify the areas that do not attribute much to happiness or achievement.
  • Spend more time doing the things that provide large amounts of happiness and achievement and eliminate things that don’t.

Be Unconventional:

  • There is usually great scope to do things differently within your existing circumstances. Remember the advice: Be unconventional and eccentric in how you use your time.
    • Do not follow the herd.
  • Do not do things just because people ask or because you receive a phone call – just say no

Finding Enjoyment in Work:

  • When you enjoy something you are more likely to be better at it compared to the things you don’t enjoy. Therefore you are more likely to satisfy others (provide value).
  • Find the things you are best at and pursue them.
    • What can you do better than 80% of people in 20% of the time?
  • When looking for jobs: Do your personal goals align with the career?
    • If they don’t it’s not going to be a lasting career. (this works for hiring as well)
  • When the 80/20 principle is applied correctly, the line between work and non-work becomes blurred.
    • When you can have 80% of your time filled with life enhancing activities
  • 2 dimensions of the principle:
    • Efficiency – things you want to get done as fast as possible with the least possible effort
    • Life Enhancing – anything that is truly significant to our lives (what makes us feel grateful to be alive)
  • Only work for an 80/20 boss.
    • Focus’s on very few things that make a big difference
    • Going places fast
    • Rarely short of time and never flustered
    • Not workaholics and often relaxed and happy
    • They encourage you to focus on what gets the best results with the least effort
  • Use your bosses momentum before you generate your own.

The Subconscious Mind:

  • When taking an exam read all the questions before answering the first one – this allows your subconscious mind to plug away at the later questions while your conscious mind answers the first one.
  • To allow your subconscious to get through to you – let yourself relax and day dream during portions of your day
    • Vigorous activity or a restless mind will not allow any messages to come through
    • This is why in the mornings or right before bed I get my best insights on how to solve my problems.

We Lack Joy Not Time:

  • Become unique usefully and joyfully
  • Time is not the real thing we lack despite being told it is, the thing in short supply for nearly anyone is joy.
    • Do not do anything that depletes joy
    • If it adds joy then it uses negative amounts of life energy
  • A life quest is finding what gives pleasure to others but generates joy for us
    • Get more with less and do it joyfully

Network Companies:

  • Build a platform not a pipeline
    • Amazon with FBA
    • iPhone with the App Store and iTunes
  • Platforms are natural monopolies due to the network effects – everyone wants to be on the largest network
    • The goal is to have a product or service that automatically gets better the larger the network
  • Viral effect – I send someone money through a platform which causes them to have to use the platform to receive the money – this can help a business grow fast but is different than network effects because more users does not make the product or service any better.
  • There is a huge potential advantage for everyone who works to identify network businesses before they get big.
    • The first 20 people in Amazon, google, and Microsoft are all multi millionaires or even billionaires
    • Try to work for these companies when they are small – get in on the ground floor and grow with them
  • Find small network companies to work for less than 100 employees (ideally less than 20) that is seeing incredibly high growth rates (increasing revenues by at least 30% each year)

September 6, 2023      Pete VanCamp      Readings        80/20 Principle

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