Pareto's Principle & why focusing on just 20% of problem areas will solve the most of your issues
When you're a product manager, you are constantly faced with problems to solve:
- How do you get more conversions?
- Why are people dropping out of the checkout funnel?
- What's going to give us the most value for our effort?
What we need is a general principle that we can apply that will help us prioritize our activities; and that is Pareto's Principle.
What is Pareto's Principle?
The Pareto Principle has its origins back in the late 19th century, when Vilfredo Pareto, an Italian economist, noticed that 80% of Italy’s land was actually owned by 20% of the population.
This overall rule of the distribution of cause and effect, where 20% of something is likely effecting 80% of something else, has since been seen in a range of economic and business settings.
How does this apply to product management?
The most used application in product management, is in the world of optimizing effort.
For example, Microsoft identified that fixing the top 20% of their most reported bugs, would remove 80% of the related errors and system crashes.
For product managers this means that if we can focus our attentions on the top 20% of reported user issues we can remove 80% of our user problems. If we address 20% of the reasons for dropouts from our funnel, then we'll improve the experience for 80% of our visitors.
So if we want the quickest way to get better results, focus attention on the top 20% of what is is, rather than spread yourself thinly by attempting to tackle everything.