Authors Note: All frameworks have moved to a new home at Strategy Umwelt. Please join me at this new platform for a revised list of mental models, strategy frameworks and principles including an updated version of the Pareto Principle and the 1% Rule of Internet Culture.

The following article outlines two interesting mental models - the Pareto Principle and the 1% Rule of Internet Culture. Both of these have connections with each other, and are of interest to anyone in Marketing & Advertising.

The Pareto Principle

This model (often called the 80/20 rule) is designed to help you realise that the majority of results come from a minority of inputs. In other words, most things in life are not distributed evenly.

It's called the 80/20 for that specific reason - 80% of the effects of something come from 20% of the inputs or causes.

For a business manager or entrepreneur, this principle can appear in a range of forms. Examples include:

80% of a companies profits come from 20% of its customers
80% of complaints come from 20% of the customers
80% of crashes come from 20% of bugs
80% of results are contributed by 20% of workers

Adapting to this knowledge involves uncovering this 20% and focusing on it. For example, if 20% or workers contribute 80% of results, focus on rewarding these employees. Or if 20% of customers contribute 80% of revenue, focus on satisfying their needs.

Author Tim Ferriss in his book "The 4-Hour Work Week" advocated taking this one step further - fire 80% of your clients and you can still get most of the profits (and potentially grow them bigger as you can cut some costs to increase your profits).

The Pareto Principle is also a good rule of thumb with a lot of decisions in life. For example, if you are in an advisory or management position, use the rule as a self-awareness monitor and try and listen 80% of the time and speak 20% of the time. Or apply it to busy work versus creative work - block off 20% of your time away from things like email and phone alerts so you can knuckle down and focus on that 20% that will likely get you the biggest productivity gains.

Just remember, things are not distributed evenly, but knowing this let's you address it.

The 1% Rule (of Internet Culture)

This model is often referred to as the 1:9:90 rule. This principle is a rule of thumb that applies to participation in Internet communities and follows this format:

1% of participants will create new content
9% of participants will contribute to content
90% of participants will be lurkers and just view content

More broadly, this is often expanded to state that only 1% contribute with the other 99% contributing a blended form of lurking.

It is important to note that this does not refer to the entire spectrum of the Internet, but within a very specific niche community. Example:

On Imgur, only 1% may actually post an original image, 9% comment on those images, and 90% view the content and up or down vote
On YouTube, only 1% post video content, 9% comment on the videos, and 90% watch the videos
However an individual who is a 1% on Imgur may only be a 90% on YouTube (and vice versa)

Knowing this principle works well on two fronts. Firstly, keep this in mind when considering setting up your metrics or any network effects you might be creating with your online community. You are not likely to have a situation where everyone is contributing, so factor in a much smaller 'power' user base who will make up the bulk of your contributed content.

Second, understanding 1:9:90 becomes a great tool to bake into Digital strategy. For ideas to disseminate through a network or community, being able to identify and influence the 1% becomes a key strength. They will help create or push content to the 9%, who in turn will broadcast to the wider community or network. Think about this the next time you review things like your social media approach - are you putting in place strategies to target the 1%, or are you wasting time and effort targeting the 90%?

Inspiration & Perspiration

I wanted to slip in one more of these ratios. There is a famous quote by Thomas Edison that goes something like this:

"Genius is one percent inspiration, ninety-nine percent perspiration".

Edison famously put this into practice when he created the incandescent lightbulb in 1878. He wasn't the only person experimenting in developing this technology, but he was the only man willing to test six thousand filaments including one made from the beard hair of one of his men before he finally had his eureka moment.

This model is now applied to creative ideas. It's not enough to just come up with an idea, you need to actually realise it, and that takes a lot of hard work and energy in proportion to the original ideation process.

A friend of mine @Kiel came up with a further take on this. With many organisations suffering from being structured in outdated hierarchies - middle management with no ability to make decisions, ever increasing information flows, and ever increasing complexity (in short, everything wrong with organisations today) - the 1% : 99% can begin to feel more like this:

1% Inspiration
9% Perspiration
90% Justification

In short, have a think if you are adapting to the shifting environment we face today by becoming more responsive, or if you are swimming against the ever faster tide.

A newer version of this article is available at my new site, Strategy Umwelt.

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