Price’s Law Explained: Why Only A Few People Get The Majority Of Rewards

Price’s law is something that can truly change the outcome of your life and career. It can make you or BREAK you. On this episode, I explain why that is and how you can use it to become successful.
The rule says: 50% of the work is done by the square root of the total number of people who participate in the work.
I didn’t know about Price’s law until recently when I watched a lecture by Dr. Jordan Peterson, psychology professor, and author of 12 Rules For Life (amzn.to/2Iodkgf).
Understanding the underlying idea of Price’s law can make your life a lot easier. Look at your current profession. Are you in a position to create substantial value? If the answer is no, move on to a different place where you CAN.
Become very good at what you do. That’s the only way you can provide value. We must be realistic. There are no shortcuts. It takes time to be good-let alone be great.
When you provide more value, you feel better, plus you’ll earn more. Not a bad side-effect of doing great work. Look, life is not symmetric nor linear. Only a few people in every domain are responsible for half of the results.
Hence, find the domain YOU can be the important minority - you’ll also get the majority of the benefits. Then, let me know if your life isn’t better.
#priceslaw #jordanpeterson #derekprice
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Sign up for my FREE course, Wealth Strategies, here: dariusforoux.com/wealth-strate...

[@DariusForoux]

What do you think of Price's Law?

[@DinoDillinger]

It's brutal.

[@econdude3811]

Do you realize that you are providing an excellent example of it by creating this video. SUBSCRIBED

[@michael1]

It seems completely moot. I mean, even assuming it's true (and that's questionable) if you want 100% of the work doing you need both "halves", and if you want 10 good programmers then you need to hire 100. If you then decide to fire 90, you can only do half of the work you were doing - and it has the implication that of the 10 remaining programmers, 3 of them are doing half the work. So it's moot. So do you fire 7 and do 25% of what you wanted to do but more efficiently? You're thinking about it completely wrongly if you think it's about incompetence. 50% of the work isn't enough. If you want to run a marathon in 2 hours, and you have 1 person who can run half in 1 hour but you need 3 people to run the second half 20 minutes each. You need 4 people. The 1 person even though they're better is not enough. Unless you indulge the fantasy that you will only hire the competent people - fat Gabe at Valve software has this delusion and the result is a small understaffed company that's next to useless.

[@theitguy3096]

I think it is too mechanical a way of analyzing the outcome of a business. In fact, through my own decades of experience as a highly technical person, and a manager for a period of that, it is a mistake to overlook all the midfield players and defence and only consider the square root of 11 players in soccer, i.e. the two attackers and the goalie!

[@JoeInFresno]

​@@DinoDillinger😂

[@rabbitinnh]

You know what's far worse than not being a member of the "square root"? Being a member but not being recognized. I've seen so many companies lose superstars due to a lack of recognition.

[@joepasci4970]

That's part of the law.

[@sebastianfernandez5827]

Usually, what happens is, after multiple attempts at pleasing a manager and external validation, a high performer will get frustrated and launch his own business. This usually ends very well for high performers who have confidence in the value they provide.

[@yoshimitsu8922]

I came into this video expecting some hard truths, but instead I feel strangely motivated. Thanks!

[@gauravm.]

Hey Darius, thanks for creating this informative video.

[@hfarthingt]

Rounding to nearest tenth, I applied this math to my marriage and realized this is why my wife produces 75% of the positive results

[@thelimitingfactor]

Nice work man!

[@iniobatnya3933]

wowwwwww....thank you so much...really enjoy it, and i will use it in my career and my life....God Bless U

[@Over50tv]

I enjoyed this video because it gave me a perspective I hadn’t considered. I also liked your Peter Drucker quote. Thanks! Also, I am now a Subscriber to your channel.

[@abrahimvr]

Great video. Thanks bro

[@danperlman3185]

Your honesty mixed with your insights provided for me lots of value... Thanks for the great vid .. wish u the best. Dan

[@itiro14]

Great Content!

[@MOTIVATION-fr2hy]

well presented Darius

[@skipperry63]

Great stuff! I contribute and I like my job. I feel lucky! Thanks!

[@noahbatz6006]

Thank you

[@wahnano]

Fantastic !

[@anthonymendoza1327]

Price's Law is correct. However it has little to do with who gets the rewards. That is determined by luck and political astuteness. Unless the job is one that can be tracked objectively (like Sales), most managers have no idea who are their most productive people. Instead they reward the people who look the best which often has nothing to do with productivity.

[@Jd-kg1fh]

Brilliant.. You're spot on.. I recently switched jobs and have received so much praise and recognition from my employers, that within two weeks they've decided to increase my hourly rate quite substantially. It's work I excel in, but it's for employers that are fussy like me. The last company were rough and lacked respect.. so you're spot on. Thanks for sharing.

[@iandewar5620]

I decided to look up Price's law for reasons similar to your own and came across your video. Congratulations, it's a clear and thoughtful presentation which I enjoyed. From my personal perspective and interests I am intrigued as to how Price's Law, the ParetoPrinciple et al echo old religious and philosophical truths. I ought to explain that I am Anglican priest and hospital chaplain. And I think that from my own religious tradition (it would be wrong for me to speak on behalf others) Price's Law and Pareto are the Parable of the Sower writ large, we've just forgotten how to say it. Keep up the good work. Best wishes..

[@dougvee4744]

You do humility really well.

[@gw2050]

Bravo!

[@nadeemhaque8396]

very nice.......

[@ChargedSoulsEnt]

Dope bro. Your smart asf

[@rtrhempstead6256]

ILOVE the fact that you point out if you are not one of the ones producing the 50% find somewhere that you can be one of those!!!!!!!!!!!!

[@UniversalHourglass]

Lord Peterson 🙌🏻

[@reddish_orange]

What you start saying around 4:00 about motivation, I think you were on to something really interesting. Would love to hear your perspective!

[@IntermountainGoldRefiners]

I guess to start a sales team you need to hire 10 people to find the one that’s gets 50% of sales. Also at my company I’ve been thinking about where to best position myself based on my strengths and this video confirmed my intent.

[@michael1]

You need to hire all 10 to get 100% of sales though. Why wouldn't you do that? Presuming that there's some point where hiring more salespeople wouldn't increase sales - i.e you're sating the demand for your products or services then obviously you don't want more sales staff than n, but if hiring fewer than n means you get fewer sales than you could, why wouldn't you just hire them all? So long as the cost of sales is less than the revenue generated (i.e so you make a profit) it makes no sense at all to fret too much about the idea that 1 sales guy does 50% and the rest do 50%. Excepting perhaps when it comes to trying to keep those highly productive staff.

[@SophiaAphrodite]

Keep in mind in corporatism there is zero correlation of productivity with reward.

[@mikalrain]

Does this apply on an individual level too-that is, √(volume of your work) amounting for 50% of your results?

[@Christian-yk8gk]

JOrdan P said this...

[@HQpointofview]

I'm a 10%er. Just quit my job because I have "creative" managers.

[@yoganugraha2521]

More mathematical: The top All^x people do x work. Example for 81 people, 81^50% = 9 people do 50% work, and 81^25% = 3 people do 25% work. Or Top a people among b people do log(a)/log(b) work, so 9 people among 81 people do log(9)/log(81) = 50% Hope this helps

[@johannesh7610]

Very cool!

[@mr.b7486]

Opportunity recognition

[@naveenrajg]

This is similar to Pareto Analysis or 80/20 rule?

[@DorianPaige00]

There's other things in sales you have to account for. Maybe some of the sales force is doing it part time while going to school. Top earners usually in real estate or auto sales usually 'work' a network where instead of waiting for potential customers to comin e, they work the phones typically on their own time. The price law study involved the number of writers in a domain who produced the research papers. The law works more accurately where the job is in the creative area. I noticed this a few decades ago when I was looking at the R&B/soul charts where of the 100 songs, 50 of them were written and produced by the same 10 teams. Momentum, hard work, marketing, and corporate CEO's giving certain productive teams advances was key in producing a renaissance of sorts. Select writers were given leeway and opportunity to take multiple cracks at getting it right through singles and remixes during this late 80's-early 90's music boom.

[@cantstopturninred]

Autumn, you've shared a single personal anecdote where Price's Law seems to have worked in the music industry, and (if I understand your message) you imply it doesn't apply as well in sales. But Price's Law isnt invalidated by your observation. Price (or Pareto before him) didn't say WHY the square root of the input is responsible for half of the output. He simply observed the pattern. I'd expect a variety of contributing reasons why top sellers and top songwriters and top academic publishers and top ditch-diggers produce more than their colleagues. And many of those "reasons" explaining the difference are the result of knowledge, skills, attributes or habits that in clinical observation make their success rather obvious (having a network, receiving privileged access, knowledge gained by school or experience, etc). Price's Law is an observation, not an explanation.

[@robertwoodpa6463]

Your lecture here would be considered hate speech on many college campuses today.

[@jensonphan]

Very very true, I go to high school and yes you’re right, also well as the other people who can recognize that too

[@DariusForoux]

Mate, I live in The Netherlands. Look it up. We value freedom of speech.

[@IntermountainGoldRefiners]

I wonder why this happens, like in sales does it happen because one in ten people have all the skills they need and the rest don’t? Any thoughts people?

[@mackeejack6731]

It’s pure luck.they’re born with intangibles that you could never reproduce. Look at Jordan Belfort. Scammed for $100s of million and can still be in that arena. Most people that appalling would be shunned for life. He on the other hand was lucky enough to be in a movie that he could come out of the shadows

[@Rendon276]

You learned this (in whole or in part) from Jordan Peterson. And I watched your video because I heard it from Jordan Peterson! (I was looking for a concise definition). Great video. Simple but profound wisdom I wish I'd had earlier.

[@larrybohlken147]

I would love a study with blue collar feilds. I don't think the spread is quite the square root.

[@stanipc]

What about people that their strengths ar not valuable for society? For example, my total strength is on skating Rollerblades, but this is not valuable for most people, and doing this provide much more experiences than income.

[@DariusForoux]

That’s a hobby. And it’s great to have hobbies. But this theory has nothing to do with that.

[@eddieluicy]

I agree that price’s law as a theory and have many real life application, just really want to know more real life examples and where to find those paper. Do you think there is data support 1 person out of 3 people household usually to 50% of housework or earn 50% of the income. With this understanding how to be not feel ashamed or truly not who down people who bring in less vale? jP often explain “we have no idea how to deal with those do can’t bring in value” and we kind of don’t talk about that, what would be some places to have some calming conversation?

[@mihailvd]

You really make a good point, but let's say that everybody strives to be part of this 10% that produce the most value. So either by this law, only 10% succeed in doing so, or only 10% are even trying.

[@karamlevi]

Mihail Dimitrov you gotta wake up. It’s a low percent who even try in any sustainable n mentally positive fashion.

[@surry99]

square root of 100 is +/_ 10...

[@HAL-nt6vy]

Did I miss it? There is no answer or explanation of "why."

[@DariusForoux]

Yes, genius. You definitely missed it.

[@HAL-nt6vy]

@@DariusForoux Actually, the narrator said something like, "I'm not going to explain why." But, it seems pointless to view the thing again to pin it down. Please give me a time stamp or a summary of why Price's is based on the square root of the group in an endeavor.

[@DariusForoux]

@@HAL-nt6vy The narrator seems like a smart guy

[@HAL-nt6vy]

@@DariusForoux Yeah, someday he could even answer the question posed in the title of the video. But first he needs to understand the question. Sometimes somedays never come.

[@beetlebayley5237]

This Law is proven in South Africa.....

[@wbw910]

What is wrong with you? Human interaction depends on what you can do for me. You may wish it to be some other motivation, but it still holds. If I feel better by giving to charity it is because I feel better about myself.

[@jopioeverest3175]

Nice lecture, but there are some mistakes. Taking the root of a percentage to explain Price’s law is wrong. As I understand, taking the root of the number of people is relevant. That is not what it reads on the black board: 10% of people is responsible for 50% of the results. Your own call centre example @ about 2’45” and on also underpins this error: 5 persons out of 25 is not 10% of the number of employees, it is 20%. While I’m on it, to me Price’s law and the Pareto distribution do not explain why asymmetrical distribution occurs, it’s an observation that certain human activities that involve personal attributes like intelligence, creativity follows these principles. I don’t think we know why they do so. BTW you have a pleasant voice and nice way of lecturing.

[@qwertyplm13does51]

10% of n is no square root of n

[@qwertyplm13does51]

@@dynapic how intelligent you are.

[@peterbradburn6349]

except when n = 100

[@JavedKhan-fw5hm]

I agree, his statement is wrong to say 10% of the people generate 50% of the work. That's only true if 100 people are involved. If it's 4 people they are all equally productive.

[@ampiciline]

His video was almost 10 min ..... square root of 10 is almost 3 min ...... 3min of the beginning of this video gave us 50 % of its content ....... 80/20 rule says : 2 min of his video gave us 80% of it content ...... which rules is more accurate ????

[@Rendon276]

I don't think it matters which rule is more accurate. What matters is that there's a pattern.

[@rich8304]

This is why i never tip good where they pool there tips,i want the person who did a great job get the bigest tip. Pooling tips is a form of Marxism.

[@ahzibania]

dude all that blabbering and repeating the same sentence in different forms and yet you failed to hit that 10 minute mark, you came 10 seconds short.

[@ZeroBaller0]

That’s what she said 😂

[@toseeornot2see]

Man, Price's law can not be demostrated in any meaningful way. We can write it on a chalkboard, just as I can write - "the moon is made of cheese" . It is not realistic at all. I have never seen this phenomenon anywhere in a creative venture.

[@kellysooth602]

Took you like 10 minutes to stop repeating yourself