Price’s Law

Another Reason Companies Fail

Price’s Law says that 50% of work at a company is done by a small number of people. Specifically, it says that 50% of work is done by the square root of the number of employees.

There’s no need to break out the middle school math book to understand this. If a company has ten employees, three of them will do 50% of the work and the other seven will do the rest.

If there are 100 employees, only 10 will account for 50% of the work. And if there are 10,000, only 100 will do half. That leaves 9,900 people doing the rest.

I came across that in a random autoplay of a Jordan Peterson video, which follows.

Successful people – Jordan Peterson

I don’t know why I never came across this before!

Additional:

Price’s model
Price’s square root law: Empirical validity and relation to Lotka’s law
Matthew effect

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