The 1 Percent Rule: Why a Few People Get Most of the Rewards

Why do a few people, teams, and organizations enjoy the bulk of the rewards in life?

The Pareto Principle

The majority of rewards always seemed to accrue to a small percentage of people. This idea that a small number of things account for the majority of the results became known as the Pareto Principle or, more commonly, the 80/20 Rule.  

The Power of Accumulative Advantage

What begins as a small advantage gets bigger over time. One plant only needs a slight edge in the beginning to crowd out the competition and take over the entire forest.

Winner-Take-All Effects

Situations in which small differences in performance lead to outsized rewards are known as Winner-Take-All Effects.

 

The margin between good and great is narrower than it seems. What begins as a slight edge over the competition compounds with each additional contest.

 

The 1 Percent Rule

The 1 Percent Rule states that over time the majority of the rewards in a given field will accumulate to the people, teams, and organizations that maintain a 1 percent advantage over the alternatives. You don't need to be twice as good to get twice the results. You just need to be slightly better.

The 1 Percent Rule is not merely a reference to the fact that small differences accumulate into significant advantages, but also to the idea that those who are one percent better rule their respective fields and industries. Thus, the process of accumulative advantage is the hidden engine that drives the 80/20 Rule. 

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