CLick on 80-20 and 90-9-1

The book Click, reviewed earlier, made two more contributions to me that are a bit outside of my earlier comments on the book. But as I thought about the contributions of this book, they are two which should be highlighted.

One piece of data (one of Tancer's mantras is "I Like Data") concerns Vifredo Pareto. Pareto was economist who developed a theory on equitable distributions called Pareto Optimality. The concept suggests that at the margin distributions should go first to the least well off. Tancer points out that Pareto also was the developer of the "80-20" rule - which posits that 80 percent of one's business will come from 20% of one's customers. The 80-20 rule is an essential idea relating to all sorts of marketing. And, until recently, drove many sales and distribution decisions. It is especially important for figuring out hits in products. Chris Anderson, a Wired editor, points out that when content is digitized the 80-20 rule is less applicable because of something called the Long Tail(the original Wired article which is much expanded in the book) As someone who has taught Pareto Optimality for a long time - I had not realized his contribution to the concept of 80-20.

Tancer also introduces something called the 90-1-9 rule which posits that for resources like You Tube or Wikipedia that 90% of the hits are from passive users - people looking for content. One percent of the users are active contributors and another nine percent are occasional users. This original idea came from a paper by Jakob Neilsen called Participation Inequality. But Tancer expands on the idea and speculates that for some Web 2.0 applications that ratio may be moving a bit. In the second half of Click he speculates about both what we know about web demographics (i.e. who are the one percenters in various situations - and they differ by age and background for different sites) and also about how to think about using the data that one can mine from the web stats. As I noted in the earlier post - this shorter section is well worth the book by itself.