This post is part of the đź“– Mental Models series.

Today, I am reading the 27th mental model The Pareto Principle from Oldies but Goodies: They’re Still Around for a Reason! chapter of the book Mental Models written by Author Peter Hollins.

TL;DR! đź’¬

Mental Models are like giving a treasure map to someone lost in the woods. They provide instant understanding, context, and most importantly, a path to the end destination. Now imagine having such a map for all problems and decisions in your life.

In this book Mental Models, author Peter Hollins discuss 30 mental models that billionaires/CEOs, Olympic athletes, and scientists use to think differently and avoid mistakes.

Battle information overwhelm, focus on what really matters, and make complex decisions with speed and confidence.

Yesterday, I finished reading the 26th mental model Hanlon’s Razor.

Chapter #5: Oldies but Goodies: They’re Still Around for a Reason!

The mental models in this last chapter develop more from observations of patterns found in real life, both small and significant. But within them are lessons that can transfer to how you live your life.

Mental Model #27:

The Pareto Principle

Use to find where your time and resources will create the biggest impact.

The Pareto Principle is all about finding the best bang for your buck.

The Pareto Principle was named for an Italian economist who accurately noted that 80% of the real estate in Italy was owned by only 20% of the population.

The Pareto Principle applies to everything about the human experience: our work, relationships, career, grades, hobbies, and interests. Most things follow a Pareto distribution, where there is a reasonably skewed ratio between input and output.

The author gave a few examples of Pareto Principle in action:

  • 80% of results you want out of a task will be produced by 20% of your activities and efforts directed towards it.
  • 20% of the tasks go toward creating 80% of the profit.
  • 20% of tasks will make a difference to 80% of a project’s success.
  • 80% of your problems in life are caused by 20% of the same people.
  • 20% of your wardrobe gets 80% of the wear.

This mental model has one simple proposition and lesson: identify the 20% input that generates the 80% output in an area you seek to improve and focus.

Don’t try to do everything at once; focus on what moves the needle and creates more of the result you want.

Conclusion: What are the tasks that make the most significant impact, regardless of details or completion? Do those first and foremost—they might adequate for your purposes.

Key takeaways

  • Most things follow a Pareto distribution, where there is a fairly skewed ratio between input and output.

  • In any pursuit, only a few things make the difference, and tinkering with the tiny stuff is usually a worthless pursuit.


  • Pareto Principle: A natural distribution tends to occur, where 20% of the actions we take are responsible for 80% of the results; thus, we should focus on the 20% for maximum input-to-output ratio.

  • This is in the name of becoming results-driven and simply following what the data is telling you. This is not about cutting corners; it is about understanding what causes an impact.

That’s it for today. Tomorrow, we will read the 28th mental model Sturgeon’s Law, use to be more discerning and protective of your mental resources.

What mental models we've learned so far?
  1. Address “Important”; Ignore “Urgent”

    Identify and address important tasks, ignore urgent tasks. Delegate important but non-urgent task and delete not important and not urgent tasks.

  2. Visualize All the Dominoes

    Don’t stop your analysis once the most obvious situations are articulated. Consider as many long-term possible ramifications as you can. Think twice about what you’re doing, and it helps to eliminate rash decisions.

  3. Make Reversible Decisions

    If you want to make the best decision possible, you can go ahead and use reversible decisions to learn exactly what you need to know.

  4. Seek “Satisfaction

    We need far fewer things than we originally thought and that our desires are masquerading as needs. Use Seek “Satisfaction” to achieve your priorities and ignore what doesn’t matter by creating a default choice.

  5. Stay Within 40-70%

    Utilize this mental model by intentionally consuming less information and even overgeneralizing — this means not looking at the subtleties of your options.

  6. Minimize Regret

    Minimize Regret. Jeff Bezos developed what he calls the regret minimization framework. In it, he asks one to visualize themselves at age 80 and ask if they would regret making (or not making) a decision. This simplifies decisions by making them about one metric: regret.

  7. Ignore “Black Swans”

    A black swan event is an entirely unpredictable event that comes out of nowhere. Doing so skews all data and beliefs, and people start to take the black swan into account as a new normal. But these are just outliers that should be ignored.

  8. Look for Equilibrium Points

    This mental model is about noticing trends in progress.

    When you first start something, you go from zero to one—that’s an infinite rate of progress. Then you go from one to two, two to three, and so on, and the rate of progress slows, and the returns start diminishing.

    Somewhere around there is an equilibrium point that truly represents what the average mean will be. Don’t make the mistake of not waiting for it.

  9. Wait for the Regression to the Mean

    This mental model is the final mental model about seeing the whole picture in terms of information.

    A change without reason for the change is not a change; it’s just a deviation. As such, it doesn’t represent what will continue to happen in the future.

    A regression to the mean is when things settle back down and resume what they were doing before—this is representative of reality.

  10. What Would Bayes Do (WWBD)?

    Bayes’ Theorem is something that does allow us to conclude the future: based on probabilities and taking into account events that have already occurred. All you need are the rough probabilities of three elements to plug into the Bayes’ formula, and you will come to a more accurate conclusion than so-called experts. This is basic probabilistic thinking.

  11. Do It Like Darwin

    Darwin was not a genius, but he did have one trait that set him apart from others: his undying devotion to truth.

    In doing so, he developed his golden rule (and our mental model) of giving equal weight and attention to arguments and opinions that opposed his own.

    Instead of growing defensive when presented with something that opposed him, he grew critical and sceptical toward himself. This radical open-mindedness puts aside confirmation bias and ego.

  12. Think With System 2

    System 1 focuses on speed and efficiency of thought, while System 2 focuses on accuracy and depth of thought. System 2 is smart, while System 1 is dumb.

    System 1 does more harm than good, but unfortunately, it is the one we default to because it is easier. Gain awareness of the difference between the two; acknowledge System 1, then jump immediately to System 2.

  13. Peer Review Your Perspectives

    Peer Review Your Perspectives. Many of the ways we fail at solving problems are related to our inability to look at other perspectives. We should be continually checking our perspectives through triangulation against those of others.

    Thinking and solving in a vacuum will never work because if you didn’t experience it firsthand, it wouldn’t make sense to you.

  14. Find Your Own Flaws

    This mental model is about resisting the comforting allure of confirmation bias and attempting to scrutinize yourself before others ever get the chance.

    Assume that you are wrong; this especially applies to interpersonal relationships. If you assume that you are at least 1% responsible for the conflict, your illusion of superiority and infallibility is broken, an important factor in social interaction.

  15. Separate Correlation From Causation

    Separate Correlation From Causation. They are entirely different things. Forcing a relationship where none exists will cause you to chase the wrong issue. In addition, you must separate proximate cause from root cause—the root cause is what we always want, and it can be reached through a series of questions.

  16. Storytell in Reverse

    When it comes to causation, sometimes we need to get better at thinking in a specific manner. You have a visual aid in a fishbone diagram, which document causes of causes and so on. This is storytelling in reverse because you start with a conclusion, and you work backwards through sometimes ambiguous means.

  17. SCAMPER It

    The SCAMPER method stands for seven techniques that help direct thinking toward novel ideas and solutions: (S) substitute, (C) combine, (A) adapt, (M) minimize/magnify, (P) put to another use, (E) eliminate, and (R) reverse.

  18. Get Back to First Principles

    When we try to solve problems, oftentimes we attempt to follow methods or a specific path just because they are the conventional means. But are they the best? First principles thinking strips away assumptions and leaves you with only a set of facts and a desired outcome. From there, you can forge your own solution.

  19. Avoid Direct Goals

    Direct goals are like shooting for the moon, while anti-goals, or inverse goals, are about avoiding crashing into the earth and doing everything to prevent that from happening. This has just as good a chance of achieving the outcome you want through direct goals, but it might get you there quicker and more efficiently. Articulate the factors involved in a worst-case scenario, then devote your time to preventing them.

  20. Avoid Thinking Like an Expert

    Experts think about the big picture and sometimes can’t be bothered with small details. Small details, counterintuitively, are mostly paid attention to by novices because they are absorbing new information and going slowly through a process. Thinking like an expert in a given field will probably mean that you make small mistakes because you engage in assumptive thinking and focus on overall effects and conception.

  21. Avoid Your Non-Genius Zones

    All of us have natural advantages in some things, and despite how hard we work, we will never be more than mediocre in other areas. Recognize your strengths, and while you shouldn’t stop trying to improve upon your weaknesses, understand where you will have the most impact.

  22. Avoid To-Do Lists

    Construct don’t-do lists. Narrowing down what you should be avoiding and what doesn’t matter will drastically free up your time. This means you will have less stress and anxiety and know exactly what your priorities are.

  23. Avoid the Path of Least Resistance

    Avoid the Path of Least Resistance. Does something appear too easy? It’s too good to be true. Avoid it. Seek resistance because that’s a sign that you are on the right path.

    Daily, we are faced with two choices: the easy thing and the right thing. We usually don’t even realise we have a choice, but you might discover that your instinct to avoid resistance is self-sabotage when you start categorising your choices honestly.

  24. Murphy’s Law

    Anything that can go wrong will go wrong, so make sure it doesn’t have the opportunity. Don’t rely on just getting by; make sure that you are as fail-safe as possible.

  25. Occam’s Razor

    The simplest explanation with the fewest variables is most likely to be the correct one. Our instinct is to go for the most mentally available explanation, which says more about what we want to see or avoid.

  26. Hanlon’s Razor

    Malicious acts are far more likely to be explained by incompetence, stupidity, or neglect; assumptions about one’s intentions are likely to be wrong. Improve your relationships by giving the benefit of the doubt and assuming, at worst, absent-mindedness.

  27. The Pareto Principle

    Pareto Principle: A natural distribution tends to occur, where 20% of the actions we take are responsible for 80% of the results; thus, we should focus on the 20% for maximum input-to-output ratio.

    This is in the name of becoming results-driven and simply following what the data is telling you. This is not about cutting corners; it is about understanding what causes an impact.

Mental Models: 30 Thinking Tools That Separate the Average from the Exceptional. Improved Decision-Making, Logical Analysis, and Problem-Solving

Author(s): Peter Hollins

Short Blurb: 30 Practical and applicable guidelines to think smarter, faster, and with expert insight (even if … Read more
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Part 27 of 29 in the đź“– Mental Models book series.

Series Start | Mental Models - Day 26 | Mental Models - Day 28

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