Interesting, but not the stuff that makes us change how we
do our work. Fast forward to the 1930s and 40s. Dr. Joseph Juran, an early
quality management guru, discovered the broad principle of “the vital few and
trivial many.” In the magic of naming conventions, this broad observation,
combined with Pareto’s economics work led to this phenomenon being labeled as
“Pareto’s Principle.”
Pareto’s work was a single statistic. Juran’s a broad
principle. Combined they became the ubiquitous 80/20 rule, which in one general
form states that 80% of the results are due to 20% of the actions.
Here’s an example of the 80/20 rule in action:
Many corporations discover that 80%
of their profits are derived from 20% of their customers.
They also may discover that 80% of
the time spent producing work also applies to 20% of the customers.
The problem for most corporations
is there is not a 1-1 correspondence between the two sets of customers. Some of
the customers sucking up great gobs of time produce very little (or even
negative) profits.
One result of this kind of analysis is frequent buyer
programs. Airlines, for example, want to capture business flyers who regularly travel
and often pay more for a ticket because they don’t qualify for advanced purchase
pricing or multiple day stays. These fliers provide a disproportionate share of
airline profits for the same or less cost than the typical family traveler.
How can you apply this principle in your life?
If you want to be more productive, you can begin by learning
how the 80/20 rule applies to your work. We have lots of authors who read this
blog, so I will use them for my examples. Self-published authors have an easier
job here because they have access to all of their statistics. They can tell
exactly how many books sold on Amazon, Barnes & Noble, Booksamillion, Kobo,
and individual bookstores.
I’d bet that for most authors, 20% of their outlets account
for 80% of sales and likely of profits. Looking at how they generate profits has
led some authors to choose to publish exclusively on Amazon. Doing so, they get
a higher royalty rate from Amazon. The potential profits lost from foregone sales
at other outlets are more than made up by the extra royalties. As an extra
bonus, these authors can apply the time they would have used to create the extra
formats needed by other outlets, to publicize for these venues, etc. and apply
that time to writing—the thing that generates future sales.
This kind of understanding is why Joe Konrath no longer goes
on book tours. He can make much more money writing new works than by meeting a
few fans at signings. Of course, he spent years developing a platform, which
illustrates that we need to continue to evaluate our current decisions. What
was right for last year may not be right for this one.
Authors who decide they must do all of their own marketing,
or design their own websites, or create their own book covers may be ignoring
the effects of their personal 80/20 rule. If they paid someone for those
services they would have more time to write. Writing more develops more
products to sell. Your fans will buy more from you, but only if you write more.
I read a comment recently that struck me. The author noted
that large publishers did not expect new authors to make them money until their
fifth book. They’ve lost that patience, but when we are our own publisher,
perhaps we should be taking that long view for ourselves.
I know that if you
absolutely do not have the money to invest in a career, you will have to do
it all yourself. However, if you can invest, you must decide the best places to
do that, and the 80/20 rule should help you to find which 20% of stuff you can
farm out that will save 80% of that kind of effort.
One last word. I’m a math guy and know it is possible to run
everything “by the numbers.” Fun and enjoyment have intangible benefits. If you
really love doing a task and would miss it if you didn’t, then by all means
keep doing it—but don’t fool yourself into thinking it’s a good business
decision; it’s a life decision, and that’s okay.
~ Jim
Few writers share your perspective, Jim. But I think you've made a great point. In business, I learned that hiring the right people added to our profits more than me trying to wear 50 hats.
ReplyDeleteAfter writing three manuscripts by various methods, I hired Ramona Long to review the first act of my fourth novel. Her insights have saved me time. I can change the script before progressing to the next act. Had I not received Ramona's feedback, I'd have massive revisions throughout the script. It was money well spent.
What a great way to clarify the need to analyze the efforts authors put into their work. So many spend countless hours doing work they could hire out, then countless more hours on promotion efforts that reach primarily other authors seeking promotion efforts, not the readers who might buy the books and become fans. All at the expense of time that could be used to produce more work!
ReplyDeleteThe Los Angeles Police Department once had a special unit that ignored crimes by most offenders and focused only on the most dangerous criminals.
ReplyDeleteInteresting blog, Jim. It's one of reasons I limit my online time to only a few places. I choose to not Twitter or join Goodreads or any of the other time wasting places out there. I don't go on Facebook very often, either. The days I do I find I can spend a half hour or more and that's time I don't want to spend there.
ReplyDeleteGreat post, Jim, so much food for thought about the business side of publishing. I learned a lot.
ReplyDeleteGreat post, Jim, so much food for thought about the business side of publishing. I learned a lot.
ReplyDeleteTerrific advice, Jim. And, I agree, life decisions can be as valid as business ones.
ReplyDelete