80-20 rule

Cringley this week writes about the 80-20 rule.

In every business there is some version of the 80-20 rule that says 80 percent of the business comes from 20 percent of the customers. Smart businesses do whatever they can to play to that powerful 20 percent.

...

There's another kind of company, however, that applies the 80-20 rule in a different manner and Apple is one of those companies. They aim everything they do at that top 20 percent and ignore the rest. Sometimes you hit a home run and get 75 percent market share, like Apple did with the iPod and iTunes, but I can guarantee you the business plan was aimed at taking 20 percent, tops, and making a good living with that.

There are other companies that take a similar market approach to Apple, but few of them are in the computer business. BMW and Porsche are good examples.

The 80-20 rule is known as the Pareto principle. Before this I knew it only in software programming context: 80% of software program is written in 20% of the time.

I don't know how many of Cringley's predictions come out to be true. But some of his analogies (like this one) just seem fitting.