#115 | To live in ignorance of Pareto
"We are happy when people/things conform and unhappy when they don't. People and events don't disappoint us, our models of reality do. It is my model of reality that determines my happiness or disappointments." ― Stefan Zweig, Chess Story
"Self-knowledge is no guarantee of happiness, but it is on the side of happiness and can supply the courage to fight for it." — Simone de Beauvoir
Looking back on last year at Yokeru, we made one good decision that made all of the difference to our progress.
As some of you know, Yokeru makes automated calls asking vulnerable people if they need help. In June '22, at Monty's direction, we redesigned the app so caregivers could record their voice, and their voice plays in the Yokeru phone calls.
The insight here is that people prefer to interact with the voice of someone they know — it is personal and personalised. There's something magical about Hypothetical Mary leaving periodic messages, noting: "Hi Jane, it's Mary calling to remind you to take your medication." Our tech team made this seamless, and our utilisation increased and has continued to grow.
This story is important because we did lots of other things in 2022. We renamed the service Annie to make it friendlier than the formidable 'Yokeru' (we reversed this decision). We launched a mobile app for caregivers. We designed and redesigned our training material. But nothing made even 10% of the difference as recording the caregiver's voice—many of the other product choices we made put us in reverse or kept us in neutral.
In the late nineteenth century, the Italian economist Vilfredo Pareto observed that about 80% of the land in Italy was owned by 20% of the population. He coined this distribution the Pareto principle, A.K.A. the 80/20 rule. It is a reminder that the relationship between inputs and outputs is not balanced. More recently, this principle has been exposed to the techbro spotlight, partly by Richard Koch in his book The 80/20 Principle (recommended).
In recording the caregiver's voice, our product story is an excellent example of a Pareto distribution, in which roughly 20% of the inputs result in 80% of the outputs. This principle is a manifestation of a power law dynamic; it's found everywhere in natural and social systems:
25% of Twitter users in the U.S. produce around 97% of all tweets.
1% of the U.S. population is responsible for 63 % of all violent crime convictions.
The world's richest 1%, those with more than $1 million, owns 45.8% of the world's wealth globally. In the U.K., the top 1% of households have 230 times more wealth than those in the bottom 10%.
The principle also impacts how you and I can live our lives. A small number of decisions we make disproportionately impact our destinations. We make only a few decisions about where to live or who to live with. Very few decisions at work will make an overwhelming impact on our businesses. One hire, product iteration, or an investor call can make or ruin a project.
So, on the one hand, it's paramount to be conscious of this concept. We can be mindful that only a few decisions will make all the difference.
But on the other hand, recognising the futility of most of our actions can put us off taking risks in the first place.
Would entrepreneurs even start-out if cognisant of the meagre chances of success? I don't think so. Would scientists try and repeatedly fail to incubate A.G.I.? Would painters, musicians, or writers, always throw themselves so keenly into the long and unfruitful tail of mediocre outcomes? Against such odds, the security of a career in accountancy looks cosy and inviting.
So while awareness of the dynamic of unevenly distributed success is helpful, too much knowledge would stifle innovation. Ignorance, as they say, is bliss.
Putting the statistical realities of life to one side allows us to think beyond the intellectual shackles of what we already know. It will let us wander excitedly towards a world we can scarcely imagine.
My week in books
The World of Yesterday by Stephan Zweig. This holds '4.51' on Goodreads, which is astonishingly high. And it's a beautiful story, an autobiography of Zweig's remarkable life and an even more remarkable time in history. As an Austrian Jew, and a public intellectual, he was driven from Austria by the Nazis, and his books went from being best sellers to being burned. Highly recommended. A quote:
"We who have been hunted through the rapids of life, torn from our former roots, always driven to the end and obliged to begin again, victims and yet also the willing servants of unknown mysterious powers, we for whom comfort has become an old legend and security, a childish dream, have felt tension from pole to pole of our being, the terror of something always new in every fibre. Every hour of our years was linked to the fate of the world. In sorrow and in joy we have lived through time and history far beyond our own small lives, while they knew nothing beyond themselves. Every one of us, therefore, even the least of the human race, knows a thousand times more about reality today than the wisest of our forebears. But nothing was given to us freely; we paid the price in full."
Live well,
Hector