IDEA #63
Do you have a Pareto or a long tail?
The Internet has changed the supply and demand of products in fundamental ways.
What you need to know
The Pareto distribution – commonly known as the ‘80/20 principle’ – is surely one of the most popularly repeated ‘rules’ in business. The term, named after the Italian economist who first observed it, refers to the frequent observation that 20 per cent of one thing is usually responsible for 80 per cent of another. For instance, Vilfredo Pareto observed that, at the start of the twentieth century in his native Italy, 20 per cent of individuals owned 80 per cent of the country’s wealth. Managers ...
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