Money Doesn't Talk. It Listens.
My wife is an entrepreneur. This means she’s good at what I’m worst at: business. Even weirder? She likes it! She likes courting clients, she likes talking about money, and strangest of all: She has no fear of rejection. To her, “No” means “Maybe later.”
Me? I get one un-subscription from a non-paying rando I met ten years ago on a plane, and I’m ready to close shop permanently, and it takes a legion of self-help memes and discipline to walk me back from a sulky, very silly cliff of no return.
And that’s why I’m bad at business. It’s because in the business world (according to my bedside-manner-less wife) “Only a blithering moron associates results with their abilities. Selling is easy: You just follow ‘The 80-20 Rule,’ and everything works out.”
I googled “80-20 Rule,” and it turns out my Michigan-alum wife uses slang. “The 80/20 Rule” is “The Pareto Principle,” a famous Econ101 theory from Vilfredo Pareto, who observed in 1896 that “80% of the land in Italy was owned by 20% of the population,” a distribution ratio that works in nearly every outcome model, even now, 129 years later!
If you want to “make it,” in any epoch, you put your best effort into the 20% of your activities that you’re great at, and you’ll get 80% of your desired results. And this tactic works in almost every discipline. You can use it to make money, lose weight, study… You can even use it to reduce apps on your phone. It’s so magical, it feels fake.
But the reason I brought this up was to explain how and why most “normal, first world consumers” are complicit in the ‘genocide’ of Mom & Pops, and that’s OK.
“The Amazon Principle.”
If you’re a “normal American,” (80% of us are), research indicates you use Amazon for 80% of the things they offer that you previously bought at Box Stores and Mom & Pops, and you use “those other businesses” for the remaining 20% of your purchases*.
(*Please note that Amazon doesn’t sell airline seats, live event tickets, cars, and other luxury items (yet), so they’re not included in this model. Research says that out of the things Amazon does sell, “normal” consumers now use them for 80% of those needs.)
Even wilder, this statistic includes many who self-report that they, “Hate Amazon, Walmart, and other box stores.” And that’s why I like Behavioral Economics: It shows us things about ourselves that we use cognitive dissonance to avoid reckoning with.
These people don’t hate corporations. When we hate things, we do what it takes to create distance (80% of the time). We don’t increase our interaction with things we hate. These folks just hate behavioral economics and how predictably Pareto we are:
Eighty Percent of us use Amazon for 80% of our purchases because cost-efficiency is more important than virtue-signaling “Mom & Pop morality.” Ergo, the price of cognitive dissonance from the guilt of killing Mom & Pops is “20% of our budget.”
But don’t worry! What is happening always happens (Sears, meet Walmart.)
Back to Amazon. I love them, and always have, and it’s because I grew up before the Internet, and thus fell in love with “alternative online shopping” when they were mocked in 1999. I use Amazon for 90% of my purchases—and I sleep great at night.
So that’s my story. I’ve never cared about Mom & Pops. I’ve always hated driving, parking, lines, and shopping. Consumerism isn’t on my endangered species list.
Also, like you, I’m a human with a limited budget for not just time, but money, so I’m willing to use companies that support my needs and my love of efficiency by:
Selling everything I normally buy at a price that matches or beats any competitor.
Allowing unlimited, free(!) returns even if I try the product, no questions asked.
Saving me from the stress of driving, parking, and waiting in lines.
When I was young, Amazon was that small business who needed help. They were the ultimate underdog, ruthlessly pummeled by Big Box and Big Media for years! Like it or not, most of the corporations people “hate” were once small, struggling businesses.
I think most (not all) Amazon haters are confused by The American Dream.
Yes. The American Dream, The Superhero-movie-esque Business Model Origin Story that pretends to not endorse, but totally does endorse the idea that if you sell things, you MUST grow, forever, so it’s okay to accomplish this with cut-throat tactics that send your opponents to their knees, begging for mercy. In fact, it’s MBA encouraged.
Like it or not, most successful businesses sell things for little-to-no profit for years to suck clients from their competition so they go bankrupt and the “new” business can raise prices and profit. Don’t believe me? Google “Timeline of prices at Starbucks.”
But none of this upsets me, and I still don’t hate “The American Dream.”
HERE COMES MY GIANT, HAPPY TURN!
I remain optimistic about business and economics because I think most of our “corporation-paranoia” is intentional. I think big companies want consumers to think this situation is hopeless, and it’s why they pour money into ads that make us think there are no alternatives worth using. They want buyers and sellers to give up.
But it’s silly to quit, when you can follow the 80/20 Rule and succeed. The real reason I “sucked” at business was not because I wasn’t ruthless and shrewd like Amazon or Starbucks. I was just ignoring the Pareto Principle and expecting Pareto results.
Until recently, I’d been doing the opposite of The Pareto Principle my whole career, tailoring my work to meet the imagined demands of 80% of my audience, instead of catering to my loyal 20%, like all successful corporations and Mom & Pops do.
They say praying is speaking to God and meditation is listening to God. If this is true, The Pareto Principle sure seems like a “business meditation lesson from God.” So instead of praying for materialism culture to change, I’m going to follow the message.
So hold onto your Pareto seats, and be sure to send your Pareto love to your Pareto friends. This previously-un-Pareto, “blithering moron” has turned a new leaf, and I hope this inspires some of you to do the same. What is driving 80% of your results?
Non-Pareto subscriptions are available for one more week.
This week on Coffin Talk: Mike talks to Tina Thilmony, an author who quit her job at a call-center three years ago to focus on her career. She was also born pre-mature, weighing less than three pounds, and is considered a “Miracle Baby.” Listen right here!
