# Pareto Analysis (80/20 Rule)

## Purpose
Identify the vital few factors that drive the majority of results, helping you focus effort where it matters most.

## When to Use
- Refining ideas to focus on highest-impact elements
- GTM strategy (which channels, messages, or segments matter most)
- Resource allocation decisions
- When the idea tries to do too much

## Process

1. **List all factors/components**
   - Break down your idea into discrete elements
   - Examples: features, customer segments, marketing channels, use cases, problems solved

2. **Estimate impact for each**
   - Define "impact" based on your goal:
     - Revenue potential
     - Customer value created
     - Problem severity solved
     - Adoption likelihood
     - Strategic importance
   - Assign impact score (1-10 or relative ranking)

3. **Estimate effort/cost for each**
   - Resources required (time, money, complexity)
   - Assign effort score (1-10 or relative ranking)

4. **Calculate priority score (Impact-weighted)**
   - **Priority = (Impact × 3) + (10 − Effort)**
   - This weights Impact 3:1 over ease of implementation
   - Range: 0 (worst) to 40 (best)
   - Why NOT simple ratio (Impact ÷ Effort): the ratio penalises high-effort items equally regardless of how transformative they are. A medium-value easy task (5/1 = 5.0) outranks a high-value hard task (9/7 = 1.3). That's wrong — Impact is what moves the needle.

5. **Sort and visualize**
   - Sort items by Priority score (highest first)
   - Identify the top items that deliver the majority of value
   - Create 2x2 matrix: High/Low Impact x High/Low Effort
   - Label quadrants by phase, not abstract categories:
     - **MVP**: High impact, low effort (do first)
     - **Phase 2**: High impact, high effort (strategic priorities)
     - **Phase 3**: Low impact, low effort (if needed)
     - **Cut/Defer**: Low impact, high effort (avoid)

6. **Synthesis**
   - What are your vital few (20%)?
   - What can you eliminate or defer?
   - Is your idea overly complex?
   - Where should you focus first?

## Example

**Idea**: "All-in-one AI platform for solopreneurs"

### Features List (ranked by Priority)

| Rank | Feature | Impact | Effort | Priority |
|------|---------|--------|--------|----------|
| 1 | AI content generation | 9 | 7 | **30** |
| 2 | Email marketing automation | 9 | 8 | **29** |
| 3 | Social media scheduling | 8 | 6 | **28** |
| 4 | Landing page builder | 8 | 9 | **25** |
| 5 | CRM + pipeline | 7 | 9 | **22** |
| 6 | Payment processing | 5 | 5 | **20** |
| 7 | Analytics dashboard | 6 | 8 | **20** |

Priority = (Impact × 3) + (10 − Effort)

### 2x2 Matrix

**MVP** (High Impact, Low Effort):
- Social media scheduling (Impact 8, Effort 6, Priority 28)

**Phase 2** (High Impact, High Effort):
- AI content generation (Impact 9, Effort 7, Priority 30)
- Email automation (Impact 9, Effort 8, Priority 29)
- Landing page builder (Impact 8, Effort 9, Priority 25)

**Phase 3** (Lower Impact):
- Payment processing (Impact 5, Effort 5, Priority 20)

**Cut/Defer** (Lower Impact, High Effort):
- CRM + pipeline (Impact 7, Effort 9, Priority 22)
- Analytics dashboard (Impact 6, Effort 8, Priority 20)

### Analysis

**Key change with Priority scoring:** AI content generation (Priority 30) and Email automation (Priority 29) now correctly rank above Social media scheduling (Priority 28), despite scheduling having a better ratio (1.33 vs 1.29). Impact is what moves the needle — the high-impact hard items rise to the top where they belong.

### Synthesis

**Insight**: Trying to build "all-in-one" dilutes focus. The vital few are content creation + distribution (AI writing, social scheduling, email). These three features solve 80% of the solopreneur's problem.

**Refined idea**: "AI content creation + automated distribution platform"
- Phase 1 MVP: AI writing + social scheduling only (quick win)
- Phase 2: Add email automation (major project)
- Phase 3+: Consider CRM/analytics based on user feedback

**What to eliminate**: Landing page builder, CRM, analytics, payments (integrate with existing tools via API instead)

**Result**: Simpler product, faster to market, clearer positioning, better focus.
