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Pareto’s Pyramid of Performance

Written by Gary North on January 30, 2016

Most people believe that second rate performance is fine, and third-rate performance is acceptable. I do not, and I never have.

The more important your cause is to you, the more important you think your cause should be to the world. If you represent your cause in a second rate way, you are doing your cause a disfavor. You are also identifying yourself as a second-rater. You are announcing this to the world: “Second rate is fine, especially when it comes to the thing I believe most dearly in. You should believe in it just as dearly as I do.”


Every movement has representatives. Representation is basic to all institutions. There is a hierarchy of leadership, just as there is a hierarchy of wealth, a hierarchy of prestige, and so forth.

Not everybody can be at the top of the hierarchy in each field, although this occasionally happens. In the field of investing, Warren Buffett is at the top. There is no one else in the world who occupies this position . . . as far as we know. He is at the top in the creation of investment one-liners. “We don’t know who is swimming naked until the tide goes out.” “There are three stages of investing: innovation, imitation, and idiocy.”

In any field of performance, there is an inevitable Pareto curve. About 20% of the performers in any field will gain 80% of the attention. The vast majority of performers on YouTube will gain only 20% of the attention. There is no way around the Pareto curve.

The more radical form of the Pareto curve was announced by the great science fiction writer, Theodore Sturgeon. It is called Sturgeon’s Law. “Ninety percent of everything is crap.” Sturgeon really was a master. As a teenager, my favorite science fiction author was Sturgeon, and I grew up in the golden era of science fiction. As someone in the top 1% of his field, he was intolerant of second rate.

The Internet has opened up the world of ideas and public performance to people with a wide range of talents . . . very wide. When you see something on YouTube, you should look at it from the point of view of Pareto’s curve. You recognize that most of what is out there is not worth viewing. A few videos go viral, but most of them don’t. Some performances are spectacular and unexpected, but this is not normal. I think the best video I have ever seen that illustrates this unexpected nature of supreme performance is this one. It has gone viral for precisely this reason.


From an early age, I decided that I would not participate in activities in which I had no legitimate shot at being in the top 20%. I remember only one thing from my kindergarten experience. The teacher came around with coloring sheets. I had a choice. One was Dick. One was Jane. I told the teacher I didn’t want to color either of them. I understood from an early age that art was not my field. She told me that I had to pick one of them. I picked Dick. I picked up a red crayon. I scribbled as fast as I could across the picture. I certainly did not try to stay within the lines. I handed the picture back to her.

I decided from an early age not to stay within the lines unless I had to, given the pressures of the institutional system. I also understood very early how bureaucracies work. That ability has never failed me.

I did not know about Pareto’s law, but I understood how it worked by the second grade. I made up my mind at that age to be in the top 5%. I did know what percent was, but I knew where I wanted to be.

(For the rest of my article, click the link.)

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