Tag Archives: efficiencies

Hidden Inefficiencies

November 16th, 2008

Google is a multi billion dollar company by wrapping up two inefficiencies, search and advertising.

They shifted the market from an inefficient state to a much more efficient one.

Others would be Youtube, Ebay, iTunes.

First step is to identify ‘hidden inefficiencies’, in that they exist, yet a solution hasn’t been made yet.

Then to build a business around solving it.

We all hear about ideas that are so simple but the opportunity was missed as we aren’t involved in that niche industry.

So my idea is for a business to simply spend all its time aggregating these inefficiencies and present them to entrepreneurs to solve, thus taking the information market for these from inefficient to efficient.

Imagine though, being able to have access to 1000 industry wide problems in 1000 totally different industries.

I wonder how much overlay there are between them, so you could solve many issues at once.  

(and think about how much it would improve each of these industries)

Now that would be awesome! Don’t you think?

80/20 Rule

November 11th, 2008

Not many rules I follow.

However 80/20 rules is one that I pay attention to.

The argument is 20% of causes lead to 80% of consequences.

(Note: its not strictly 80/20 it can be 90/10)

Examples are:

  • 20% of streets cause 80% of traffic jams
  • 20% of your clients derive 80% of your profits
  • 20% of faults make up 80% of your replacement costs

Smart thinking.

I always throw this around every few months, see what else I’m doing wrong, or where improvements can be made.

Some examples i’ve found:

  • 20% of our Marketing Exp lead to 80% of our revenue.
  • 10% of my calls derive 90% of my mobile bill
  • 20% of my clients derive roughly 85% of my revenue (fluctuates a little bit)
  • 13% of our content drove 95% of our traffic

Once you’ve identified a link, what can you do to improve that 20%? How can you look after your clients that drive 80% of our profit? Can you modify your call behaviour to lower the 10% that make up 90% of your bill?

Give it a shot, it’s not only fun, it’s quite interesting to see the results.

Have you already done it? share your results I’m always intrigued…

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