80/20 is half-ass when value is logistic

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80/20 is a great heuristic for power laws and asymptotic progress, but be careful when value accrues logistically.

80/20

My friend swyx wrote an article, “80/20 is the new half-ass”, that pushed my buttons. But on a second read, I realized that nothing he said is wrong. It bothered me because it dunked on one of my favorite tools without advice for using it well.

To me, the 80/20 heuristic is a mental model about diminishing marginal returns. 80/20 thinking works best in two cases:

  • something has a power law distribution of a value

  • progress to completion is asymptotic

In both of these situations, 80/20 thinking can help with making decisions. However, applying 80/20 thinking when effort is asymptotic but value is logistic is a huge trap.

When a power law applies, 80/20 thinking guides focus. 🔗︎

The original inspiration of the 80/20 heuristic comes from the Pareto Principle, named after the 19th Italian economist Vilfredo Pareto. Pareto observed that 80% of the land in Italy was owned by 20% of the population. The 80/20 heuristic is a reminder to look for power law distributions of characteristics.

For example, if I want to free up space on my hard drive, I should start searching the biggest files for ones I can delete. Starting with the smallest files, or starting with a random selection of files will take longer to free up the same amount of space.

This applies to more qualitative issues, too. I was once in a job that was eating me up. I took an afternoon to list the 20% of my activities responsible for 80% of the happiness or satisfaction in the job. And I listed the 20% of activities that gave me 80% of the headaches and misery. Focusing on doing more of one list and less of the other had huge leverage on the quality of my work life.

In power law situations, there is disproportionate value acting on the most impactful subset of the whole.

When progress is asymptotic, 80/20 thinking guides termination. 🔗︎

If I’m baking a cake and stop at 20%, I’ll have a soggy mess. But many situations are more like Zeno’s Paradox: for a given amount of effort, I can only cover half the remaining distance.

In many endeavors, an “80/20” ratio captures the feeling of relative progress. The first 20 units of work gets you 80% there. Following Zeno’s Paradox, the next 80 units of work get you 99.97% there.

It doesn’t matter if the ratio is really 80/20. The insight is recognizing there are diminishing returns to incremental effort. The decision to continue or stop requires deciding when the value gained exceeds the opportunity cost of spending that effort elsewhere.

For example, if I’m planning a two-week vacation in Italy, spending several days cramming an Italian phrase book might be a good return on time spent. I’ll have learned only a small fraction of the Italian language, but it will have a big benefit for my short trip. On the other hand, if I were planning to move permanently to Italy, it would probably be worth spending months or years taking Italian classes for greater fluency.

Perfect is the enemy of good is another way of thinking about this concept. In many asymptotic situations, there is disproportionate value in partial completion.

Be careful with asymptotic thinking when value is logistic. 🔗︎

80/20 thinking goes wrong if you confuse completion with value. Just because completion is asymptotic with effort doesn’t meant that value accrues asymptotically as well. In many endeavors, value follows a logistic curve, where value barely accumulates until a threshold is reached, then value leaps up and only then does the remaining value accrue asymptotically.

It’s a mistake to aim for 20% of the effort without knowing where the value comes.

value early vs value late

It’s also a mistake to focus on absolute achievement when relative achievement controls the value.

For example, learning 80% of a programming language may seem great in absolute terms for what you can do with it, but in a job hunt there’s little differential value in the 80% that’s easy to learn. The value of your knowledge follows a logistic function centered on the average of everyone else you’re competing with.

In this sense, I agree with swyx: 80/20 thinking is half-ass when it’s an excuse to be lazy. But used thoughtfully, 80/20 is a valuable decision making heuristic for situations with power laws and diminishing marginal returns.

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