This is a YouTube video titled "The real Pareto distribution is not 80/20." containing a monologue or talk discussing the importance of people in business, particularly in agencies, and explaining the Pareto distribution's impact on employee productivity. The speaker elaborates on how a small number of employees contribute disproportionately to output, contrasting common misconceptions about the 80/20 rule.
People. People are the most important part of your business and always will be. Agencies have three things to sell. They can sell people processes and programs. Processes and programs are both deeply commoditized and commoditizable. Processes are easy to figure out. Programs are all basically buying the same software. Those are the only things agencies can bill for. People are the differentiator, what young entrepreneurs do. What I did is you think about people as cogs in the machine. McDonald's is everybody's go to cliche model for a business. It's like, oh, I put somebody on the assembly line and they put the patio on the bun. And then it moves down the assembly line and it's the exact oppos. All of your employees will exist on. The Pareto distribution from a scale perspective. And if you look at the Pareto distribution, people think it's the 8020 distribution. That's the quick way to refer to it. It's 20% of your people are going to do 80% of your work. From a mathematical perspective, the real Pareto distribution says that the square root of the total participants are responsible for 50% of the output. So if you have 10 employees, that's not that big a deal. That means three people do half. When you have a thousand employees, you start to see the Predator distribution really scale to an unbelievable degree.
