Simply, it is 80:20 principle, stating, 80% output come from 20% input, while rest 80% input generate the rest.
This principle can be applied in various fields such as business, management, and time management to identify the most important factors that contribute to a particular outcome.
The Pareto principle was first introduced by Italian sociologist and economist Vilfredo Pareto in 1906 while teaching at the University of Lausanne. Pareto showed that approximately 80% of the land in the Kingdom of Italy was owned by 20% of the population.
In modern context, in most companies, 80% of revenue might be coming from 20% of its clients. Or maybe 80% revenues might be coming from 20% of its product.
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