Comments on: The 80-19-1 Rule http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html Wed, 17 Mar 2010 01:57:37 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Cheap_Condoms http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-16303 Cheap_Condoms Fri, 25 Sep 2009 16:01:58 +0000 http://www.feld.com/wp/?p=1265#comment-16303 The problem with many social networks are that they hover between 1 % and 5 to 6% with no hope of reaching the 19%. "Walking Dead" so to say! Good stuff, Brad! You may be on to something that applies to many Web 2.0 pheonomena! The problem with many social networks are that they hover between 1 % and 5 to 6% with no hope of reaching the 19%. "Walking Dead" so to say!

Good stuff, Brad! You may be on to something that applies to many Web 2.0 pheonomena!

]]> By: Cheap Condoms http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-16199 Cheap Condoms Wed, 23 Sep 2009 19:46:25 +0000 http://www.feld.com/wp/?p=1265#comment-16199 There’s a virtuous cycle here – the 1% disproportionately seeds the activity of the site, the 80% consume content, and the 19% sit on the fence. If you can get the 19% to engage, this drives more vibrant content, which increases reach, which increases N, which means the activity driven by the 1% and 19% increases, which drives more content, etc. There’s a virtuous cycle here – the 1% disproportionately seeds the activity of the site, the 80% consume content, and the 19% sit on the fence. If you can get the 19% to engage, this drives more vibrant content, which increases reach, which increases N, which means the activity driven by the 1% and 19% increases, which drives more content, etc.

]]> By: cheap condoms http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-16087 cheap condoms Sun, 20 Sep 2009 14:29:12 +0000 http://www.feld.com/wp/?p=1265#comment-16087 "Are blogs reliable as a generator of traffic?", your 80-19-1 rule offers a very good yardstick. 80% of the people will not know about blogs and may not care. The 1% of bloggers are hard core and will spend a lot of time on many blogs. Blogs that are successful are the ones that can attract the 19% population. Those that attract this population successfully, like political blogs (probably the only ones that can do this!) will be successful "Are blogs reliable as a generator of traffic?", your 80-19-1 rule offers a very good yardstick. 80% of the people will not know about blogs and may not care. The 1% of bloggers are hard core and will spend a lot of time on many blogs. Blogs that are successful are the ones that can attract the 19% population. Those that attract this population successfully, like political blogs (probably the only ones that can do this!) will be successful

]]> By: cheap condoms http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-16075 cheap condoms Sun, 20 Sep 2009 13:35:41 +0000 http://www.feld.com/wp/?p=1265#comment-16075 i really love the thinking. the motivation point is really interesting i really love the thinking. the motivation point is really interesting

]]> By: leafar http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3597 leafar Sat, 02 Sep 2006 17:53:05 +0000 http://www.feld.com/wp/?p=1265#comment-3597 You should have a look at <a href="http://stats.wikimedia.org/" rel="nofollow"> wikipedia stats</a>. If you want I made a study on them, when working on Metcalfe vs Reed so to use contribution as an example. Very good post and definitely a huge subject for crowd sourcing. You should have a look at wikipedia stats.
If you want I made a study on them, when working on Metcalfe vs Reed so to use contribution as an example.
Very good post and definitely a huge subject for crowd sourcing.

]]> By: jvaleski http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3596 jvaleski Fri, 01 Sep 2006 22:05:44 +0000 http://www.feld.com/wp/?p=1265#comment-3596 Love the thinking; well said. <a href="http://journals.aol.com/valeski/one#Entry1169" rel="nofollow">I had some related thoughts recently.</a> Love the thinking; well said. I had some related thoughts recently.

]]> By: Nari Kannan http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3595 Nari Kannan Fri, 01 Sep 2006 16:23:10 +0000 http://www.feld.com/wp/?p=1265#comment-3595 Brad: You are on to something very illuminating here. This may explain a couple of things about blogs also. To the question, "Are blogs reliable as a generator of traffic?", your 80-19-1 rule offers a very good yardstick. 80% of the people will not know about blogs and may not care. The 1% of bloggers are hard core and will spend a lot of time on many blogs. Blogs that are successful are the ones that can attract the 19% population. Those that attract this population successfully, like political blogs (probably the only ones that can do this!) will be successful. Others may be partially successful in that they attract may be 7 or 8 % of this 19%. The problem with many social networks are that they hover between 1 % and 5 to 6% with no hope of reaching the 19%. "Walking Dead" so to say! Good stuff, Brad! You may be on to something that applies to many Web 2.0 pheonomena! The interplay between the "Long Tail" and the 1-19-80 may also be interesting. Social Networks, Blogs etc seem to be "Affinity based" where similarity is what counts and the 1-19-80 rule seems to apply. The Long Tail seems to apply in cases where "dissimilarity" rules - like online sales of niche products. Interesting! Nari Brad:

You are on to something very illuminating here. This may explain a couple of things about blogs also. To the question, “Are blogs reliable as a generator of traffic?”, your 80-19-1 rule offers a very good yardstick. 80% of the people will not know about blogs and may not care. The 1% of bloggers are hard core and will spend a lot of time on many blogs. Blogs that are successful are the ones that can attract the 19% population. Those that attract this population successfully, like political blogs (probably the only ones that can do this!) will be successful. Others may be partially successful in that they attract may be 7 or 8 % of this 19%.

The problem with many social networks are that they hover between 1 % and 5 to 6% with no hope of reaching the 19%. “Walking Dead” so to say!

Good stuff, Brad! You may be on to something that applies to many Web 2.0 pheonomena!

The interplay between the “Long Tail” and the 1-19-80 may also be interesting. Social Networks, Blogs etc seem to be “Affinity based” where similarity is what counts and the 1-19-80 rule seems to apply. The Long Tail seems to apply in cases where “dissimilarity” rules – like online sales of niche products.

Interesting!

Nari

]]> By: Peter Rip http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3594 Peter Rip Fri, 01 Sep 2006 13:40:26 +0000 http://www.feld.com/wp/?p=1265#comment-3594 No,it is not just chasm/diffusion curve stuff. The real driver here is the marginal economics of the business. The 80% largely do nothing to contribute the business -- they don't click on ads, buy stuff, whatever. They are window shoppers in the retail mall. The 1% are the most frequent users who register, enroll in loyalty programs, repeatedly add comments, author new content, whatever. They bear the bulk of the new customer acquisition cost because they respond to most of the marketing and retention programs you put in place. It is the mining of that next tier that determines the ultimately profitability of the business. Ech of *those* customers are positive contribution margin players. Therefore, get *them* to buy/create/contribute and you drive up profitability from breakeven (on the 1%). It's all about allocation of the volume-insensitive marketing costs. Good insight, Brad. No,it is not just chasm/diffusion curve stuff. The real driver here is the marginal economics of the business. The 80% largely do nothing to contribute the business — they don’t click on ads, buy stuff, whatever. They are window shoppers in the retail mall. The 1% are the most frequent users who register, enroll in loyalty programs, repeatedly add comments, author new content, whatever. They bear the bulk of the new customer acquisition cost because they respond to most of the marketing and retention programs you put in place.

It is the mining of that next tier that determines the ultimately profitability of the business. Ech of *those* customers are positive contribution margin players. Therefore, get *them* to buy/create/contribute and you drive up profitability from breakeven (on the 1%).

It’s all about allocation of the volume-insensitive marketing costs.

Good insight, Brad.

]]> By: jim.forbes http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3593 jim.forbes Fri, 01 Sep 2006 12:33:33 +0000 http://www.feld.com/wp/?p=1265#comment-3593 Brad, great post, good insight. I'm linking. Best, Jim Forbes Brad,
great post, good insight. I’m linking.

Best,
Jim Forbes

]]> By: Dick Costolo http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3592 Dick Costolo Fri, 01 Sep 2006 05:35:33 +0000 http://www.feld.com/wp/?p=1265#comment-3592 I think this is an important insight and it's different than crossing the chasm for a couple reasons. It's basically an extension of long tail thinking, if you will, in which you acknowledge that it's not the head or the looooong tail, but the meaty trunk of the curve where you can really make hay. Crossing the chasm says "ok, we've got these early guys, now how do we add to our service offering to go mainstream", but 80-19-1, says "ok, we're offering a full suite to the entire market and making hay off the 1%, but now how do we use the same suite of services to embrace the 19 percent that could really drive a ton of value if they used/licensed/shared our stuff N times as much". I think this is an important insight and it’s different than crossing the chasm for a couple reasons. It’s basically an extension of long tail thinking, if you will, in which you acknowledge that it’s not the head or the looooong tail, but the meaty trunk of the curve where you can really make hay. Crossing the chasm says “ok, we’ve got these early guys, now how do we add to our service offering to go mainstream”, but 80-19-1, says “ok, we’re offering a full suite to the entire market and making hay off the 1%, but now how do we use the same suite of services to embrace the 19 percent that could really drive a ton of value if they used/licensed/shared our stuff N times as much”.

]]> By: anon http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3591 anon Fri, 01 Sep 2006 03:43:24 +0000 http://www.feld.com/wp/?p=1265#comment-3591 I watched a company dedicate itself 100% to the 80/20 strategy regarding its retail dealer base. Soon, due to a lack of customer service, the 80 was gone. When parts of the 20 started going, because they were now part of the 80, there was noone to take their place. Strategies regarding a focus on visitors/retailers/advertisers/customers may be nice guidelines but you have to see them as just that. 80/20, particularly in a startup, takes away focus from what is really important, building and defining your brand and market. If you make assumptions about your 1%/20% you may never even know what playground your playing in. I watched a company dedicate itself 100% to the 80/20 strategy regarding its retail dealer base. Soon, due to a lack of customer service, the 80 was gone. When parts of the 20 started going, because they were now part of the 80, there was noone to take their place.

Strategies regarding a focus on visitors/retailers/advertisers/customers may be nice guidelines but you have to see them as just that. 80/20, particularly in a startup, takes away focus from what is really important, building and defining your brand and market. If you make assumptions about your 1%/20% you may never even know what playground your playing in.

]]> By: Fraser http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3590 Fraser Fri, 01 Sep 2006 01:41:29 +0000 http://www.feld.com/wp/?p=1265#comment-3590 I think you're right Brad. Two key components of the chasm/product diffusion curve don't need to hold in the 80-19-1 situation: increasing timeline / adoption of service. This is an interesting thought... the motivation for the 1 % seems to be well understood. The motivation for the 80 % seems to be well understood. Anyone have examples/cases of a situation where the 19% is well understood? (even in hindsight?) I think you’re right Brad. Two key components of the chasm/product diffusion curve don’t need to hold in the 80-19-1 situation: increasing timeline / adoption of service.

This is an interesting thought… the motivation for the 1 % seems to be well understood. The motivation for the 80 % seems to be well understood.

Anyone have examples/cases of a situation where the 19% is well understood? (even in hindsight?)

]]> By: Brad Feld http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3589 Brad Feld Fri, 01 Sep 2006 00:51:26 +0000 http://www.feld.com/wp/?p=1265#comment-3589 It might be the Crossing the Chasm / product diffusion curve, but I think there are different dynamics. The product diffusion curve is more about linear adoption of a product or service (and the X axis it time.) The 80-19-1 dynamic doesn't actually need an X axis of time - in fact, the 80-19-1 split may hold constant over time! So - it's analogus, but I think it's different. I guess Geoff Moore will need to weigh in. It might be the Crossing the Chasm / product diffusion curve, but I think there are different dynamics. The product diffusion curve is more about linear adoption of a product or service (and the X axis it time.) The 80-19-1 dynamic doesn’t actually need an X axis of time – in fact, the 80-19-1 split may hold constant over time! So – it’s analogus, but I think it’s different. I guess Geoff Moore will need to weigh in.

]]> By: Dave Jilk http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3588 Dave Jilk Fri, 01 Sep 2006 00:12:48 +0000 http://www.feld.com/wp/?p=1265#comment-3588 Isn't this just Crossing the Chasm / product diffusion curve? 1% are the lead users/visionaries/innovators who do things for their own random reasons - 19% are the early adopters who need some proof and a good reason. Isn’t this just Crossing the Chasm / product diffusion curve? 1% are the lead users/visionaries/innovators who do things for their own random reasons – 19% are the early adopters who need some proof and a good reason.

]]> By: Nicolas Toper http://www.feld.com/wp/archives/2006/08/the-80-19-1-rule.html/comment-page-1#comment-3587 Nicolas Toper Thu, 31 Aug 2006 22:20:42 +0000 http://www.feld.com/wp/?p=1265#comment-3587 Isn't what you describe simply the part after early adopter (1%) and late adopter (80%)? What you describe is simply the growth phase of the product (cf. all product lifecycle diagram). By the way, your blog is excellent. Isn’t what you describe simply the part after early adopter (1%) and late adopter (80%)?

What you describe is simply the growth phase of the product (cf. all product lifecycle diagram).

By the way, your blog is excellent.

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