Why You Only Have to Focus On 20%

A Brief Dive into the Pareto Principle.

In the 1950’s, a small burger joint in San Bernardino, California was looking for ways to save money and optimize its business. After reviewing their sales information, the restaurant, started by two brothers, discovered that 80% of their profit came from 20% of their menu. Since their aim was optimization, they decided to cut the size of their menu to accommodate this revelation. Instead of offering a wide variety of items, the identified 20% became 100% of their menu.

By cutting their menu in this manner, they now only sold three items. Selling three items doesn’t sound like good business. However, it allowed the brothers to rearrange their restaurant so that they were efficiently producing these items. Thus, McDonald’s created the first fast food restaurant.

To paraphrase Wikipedia, the Pareto Principle is when 80% of the results comes from 20% of the efforts.

It is not always exact, but the key takeaway is doing the things that are providing the biggest results.

In the example above, McDonald’s could have continued to sell the other items on their menu, but at what cost? By focusing on their core items, they were able to make these items faster and better. Therefore, customers kept coming back for great tasting foods that they loved…