The Pareto entrepreneur
Focus on what matters most
A very good student
As an entrepreneur, you will receive a lot of advice on what to focus on, when to do it, and what to expect. However, most of the time, people give you unsolicited tips, assuming that you have unlimited time and resources. If you have participated in startup programs or accelerators, you may have had mentoring sessions with corporate experts who provided valuable advice such as optimizing your processes, building a strong company culture, and conducting a thorough KYC survey. I, too, received these tips, but I ignored them completely. At the ideation stage, I believed that my focus should be on talking to customers every day rather than worrying about the perfection of my processes.
Similarly, I did not see the need for a costly KYC analysis where daily calls actually made the trick. These ideas are not inherently bad; they are simply not the best use of time and resources when starting a new company. If I were a diligent student, I would have followed the tips to the letter. Instead I followed something more interesting and ten times more efficient : the Pareto principle, and I really encourage you to have it at one of your core foundational value when it comes to entrepreneurship. Let’s dig in.
Good students become MBAs, not entrepreneurs
“To understand entrepreneurs, study juvenile delinquents.” — Yvon Chouinard, Founder of Patagonia
It’s interesting how some of the best, most polite students—those who follow every rule, ace their exams, and snag those prestigious degrees—often struggle when it comes to entrepreneurship. This isn’t a blanket statement about all high achievers; it’s more about those who obsess over grades and academic accolades but find themselves lost in the real world. In my view, there are a couple of key reasons for this. First, many of these students have never really faced constructive criticism or negative feedback. They go through school without ever having their ideas challenged, which leaves them unprepared for the tough realities of the market. When they finally face the harshness of business, it can be quite a shock.
Second, they often lack hands-on experience and tend to view every task as equally important. This inability to prioritize can really hold them back. With little street-smartness and pragmatism, they can find themselves overwhelmed and struggling to adapt. At the end of the day, modern schooling and elite universities seem to prioritize obedience over innovation. This creates a mindset where students focus on finding solutions instead of digging into the real problems that need solving. In business, that ability to search for problems is what truly matters.
This is where the Pareto principle kicks in. To be successful, you must focus on the vital few, the 20% of tasks that will yield 80% of the results. In fact, it may be even better to focus on the critical 10% that will produce 90% of the results. By prioritizing your efforts, you can increase your chances of success as an entrepreneur. Don’t try to do everything, just do a few things sufficiently well, and iterate a lot.
You have more features than clients ? Ask Pareto
Not all entrepreneurs create tech ventures and SaaS products, but I often use them as examples. The storyline tends to be the same - a group of intelligent tech enthusiasts develop a groundbreaking application, without taking any client feedback into consideration. They work confidentially, hoping to launch a breakthrough technology that will revolutionize the industry they are working in. They believe that their software, which helps, for instance, creators optimize their revenues on Instagram and Tiktok, cannot fail. It boasts the best algorithm and produces 10% better results on average than the multitude of competitors offering similar solutions. It even allows users to calculate the average sentiment score of their account's comments in real-time, while other competitors only provide weekly reports. Do you think TikTokers are interested in the daily variations of their sentiment scores? Do they even know what that means? It sounds quite obvious, asked like that.
The initial product offering falling flat on launch day is a massive failure, a resounding fiasco, a flamboyant crash into a wall. The former executives from Goldman Sachs, Boston Consulting Group, NASA, and other top-tier companies are in disbelief, but Pareto, if he were alive, would not be surprised. I mean, nobody who ever bootstrapped a - successful or not - company can be surprised.
In our previous article, we discussed the importance of iteration, but it is not possible to iterate on everything. You must focus on what matters most. In the case of the failed product launch example, the team spent time and resources on the 80% of tasks that mattered less instead of focusing on the 20% that made all the difference. They could have built a simple landing page that outlined the product offering and asked a few creators to try a simple MVP and purchase the premium features with their credit card once they were available.
This approach is straightforward - find potential clients, ask them to put some skin in the game (money, not real skin), and keep using the product if they are willing to pay. If they refuse, do not waste time on the remaining 80% of tasks. Instead, identify the very few relevant tasks that bring all the value and dive deep into them. In general, when your company is zero-day old, the 20% can be reduced to a few tricks to actually validate your market and identify the most relevant segments. I know there are some counter-examples on the market, but I am talking to the majority of founders who operate on limited time and resources, and can’t afford expensive iterations just to make sure their product is worthless. If you are VC-backed and think this is bullshit, close your eyes and imagine if the money you are spending to build your product was out of your own pocket. How does that look like? You know, I know, everyone knows. You just discovered the difference between entrepreneur and founder.
Find your 20%
As an entrepreneur, you operate on limited time and resources, so it is crucial to prioritize tasks. The Pareto principle, which states that roughly 80% of consequences come from 20% of causes, applies to your startup as well. You may find that some tasks that took you two hours to complete could have been done in less than ten minutes. Don’t aim for perfection, just get things done such a way that they help you improve and iterate continuously. If you deploy a feature or a new product, just make sure it’s well executed enough to validate your hypotheses and confirm that there is demand for this specific offer, then go the last mile and optimize it if it can generate extra value over the long term. Again, you can’t predict your client’s expectations, so make sure to gather feedback continuously, and iterate on the most crucial part of this feedback.
As stated in the previous article, iterating is essential, but you won't be able to do it quickly if you take ages to deploy new features or validate new segments. Many entrepreneurs tend to see their daily schedules as lists of tasks that must all be done as soon as possible. Instead, you should write down your daily or weekly plans and identify the one or two essential tasks you need to complete for your company to grow, or to confirm the most important hypotheses you need to test. Once you have completed those critical tasks, you can then iterate on them or move on to the remaining items on your to-do list. By focusing on the vital few, you can accomplish more with less time and resources and beat your competitors who do not read The systematic venture.
Rather than completing 20% of all the tasks on your to-do list, focus on doing 100% of the 20% of tasks that matter the most.
Don’t be an obedient student, be a contrarian and beat your naive and polite competitors.
Embrace Pareto principles and achieve more by doing less.
If everything looks essential to you, then go outside and have a quiet walk with no AirPods and no smartphone.
Spend more time on less things.
Work smarter, not harder.
Keep the faith.