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The 80/20 Rule And How It Can Change Your Life

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What is the 80/20 Rule and could it actually make 80% of your work disappear?

If you’ve studied business or economics, you’re well familiar with the power of the Pareto Principle.

The Man Behind The Concept

Vilfredo Federico Damaso Pareto was born in Italy in 1848. He would go on to become an important philosopher and economist. Legend has it that one day he noticed that 20% of the pea plants in his garden generated 80% of the healthy pea pods. This observation caused him to think about uneven distribution. He thought about wealth and discovered that 80% of the land in Italy was owned by just 20% of the population. He investigated different industries and found that 80% of production typically came from just 20% of the companies. The generalization became:

80% of results will come from just 20% of the action:

Pareto’s 80/20 Rule

This “universal truth” about the imbalance of inputs and outputs is what became known as the Pareto principle, or the 80/20 rule. While it doesn’t always come to be an exact 80/20 ratio, this imbalance is often seen in various business cases:

• 20% of the sales reps generate 80% of total sales.

• 20% of customers account for 80% of total profits.

• 20% of the most reported software bugs cause 80% of software crashes.

• 20% of patients account for 80% of healthcare spending (and 5% of patients account for a full 50% of all expenditures!)

On a more personal note, you might be able to relate to my unintentional 80/20 habits.

I own at least five amazing suits, but 80% of the time or more I grab my black, well-tailored, single-breasted Armani with a powder blue shirt. (Ladies, how many shoes do you own, and how often do you grab the same 20%?)

I have 15 rooms in my house, but I spend about 80% of my time in just my bedroom, family room, and office (exactly 20%).

I’m not sure how many miles of roads are in the small town where I live, but I bet I only drive on 20% or less of them, as I make daily trips to my kids’ schools, the grocery store, the bank and gas station.

On my smartphone, I have 48 different mobile apps pinned to the tiles, but 80% of the time I’m only using the eight on my home screen.

When I go grocery shopping, I definitely spend the most time in the aisles that are around the edges of the store: produce, the fish market, dairy, breads—and generally skip the aisles in the middle of the store (except for health and beauty).

As a massive introvert, I don’t actually socialize too much, but when I do, 80% of my time is spent with the same 20% of my friends and family members.

In my research into the productivity habits of high achievers, I interviewed hundreds of self-made millionaires, straight-A students and even Olympic athletes. For them, handling every task that gets thrown their way—or even every task that they would like to handle—is impossible. They use Pareto to help them determine what is of vital importance. Then, they delegate the rest, or simply let it go.

How You Can Use It

So how can you apply Pareto’s principle to gain more time in your life?

Are you an executive? You’re surely faced with the constant challenge of limited resources. It’s not just your time you need to maximize, but your entire team’s. Instead of trying to do the impossible, a Pareto approach is to truly understand which projects are most important. What are the most important goals of your organization, or boss, and which specific tasks do you need to focus on to align with those goals. Delegate or drop the rest.

Are you a freelancer? It’s important to identify your best (and highest-paying) clients. Of course, you don’t want all your eggs in one basket. But too much diversification will quickly lead to burnout. Focus on the money makers and strengthening those long-term relationships.

Are you an entrepreneur? The temptation always exists to try the new and exciting. There’s nothing inherently wrong with that, but it boils down to your goals. Are you trying to grow your current business? Would an 80/20 mindset help you to stay focused on your strategic plan and spend less time chasing endless new opportunities?

No matter what your situation, it’s important to remember that there are only so many minutes in an hour, hours in a day, and days in a week. Pareto can help you to see this is a good thing; otherwise, you’d be a slave to a never-ending list of things to do.

So, what 20% of your work drives 80% of your outcomes?

 

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He Was Employee Number 7 At Tesla And Now Has Built A $1 Billion Business That Makes Your Phone Or Car Run Longer

Gene Berdichevsky was one of the early team members at Tesla. Now he’s building his own unicorn startup, Sila Nanotechnologies, which is valued at over $1 billion. One which looks like it will fuel every way you travel from the road to being in the air.

Berdichevsky recently appeared as a guest on the Dealmakers Podcast. During his exclusive interview, he shared his journey, building his first solar car, and how he’s raised hundreds of millions of dollars for his own technology startup that is growing at an incredible pace.

Thousands of Miles & Designing Your Own Education

He was born on the Black Sea in Ukraine, spent time in St. Petersburg, Russia, and even lived north of the arctic circle for five years. All before landing with his family in Richmond, Virginia, and attending college in California.

Gene was fortunate to grow up in an entrepreneurial family, and see his father start his own small businesses. Both of his parents were software engineers and worked on nuclear submarines.

So, the one thing he says he knew was, “I definitely wasn’t going to be a software engineer.” He did enjoy math and science a lot. That led him to study mechanical engineering.

Within his first year at Stanford, he got involved in their solar car project. Students would compete to build a solar-powered car and race it across the country, 2,300 miles, from Chicago to Los Angeles.

Gene’s team built the car chassis from scratch, built a carbon fiber body, and powered it with a battery with about the same strength as the toaster in your kitchen.

That was it. He fell in love with energy, problem-solving and building, and was really energized by having really built something from the ground up.

Mastering Energy

Berdichevsky went on to get a Master’s in energy engineering from Stanford. There was really no such program in existence at the time. So, he put together his own curriculum. He dove into materials, semiconductor physics, quantum mechanics, and solar.

Many people are already struggling with the decision to go to university. So, why go, and even create your own studies, when you can piece everything you want to know together online these days?

As with many of the other highly successful startup founders I’ve interviewed who have come out of Stanford, Gene found the network you gain access to very valuable. Some of those people still work for him at Sila today. He also credits the value of learning from your peers there.

Tesla & Battery Issues

At the end of his junior year, Gene became the seventh Tesla employee as a tech lead for battery system architectural development.

It’s no secret that there were plenty of early challenges for Tesla. They started out literally supergluing laptop batteries together to make the battery pack.

Then with safety the main concern was avoiding random failures. They happen in batteries. Even being rare, when you are using 10,000 batteries to run a single vehicle you really have to expect this to happen and preempt that.

Tesla grew from around 10 people when Berdichevsky started there, to around 300 when he left. About 30x in just four years. Tesla now has over 45,000 employees with a market cap of $40 billion.

His big lesson from Tesla was that as a startup founder, you want to go after really big problems. Ironically, Gene says sometimes it is easier to solve a really big problem, than a smaller one. For a start, it enables you to attract incredible talent. It is also both incredibly rewarding and reduces your competition.

From Tesla, he saw that you need to be willing to do things the world doesn‘t think are possible. This requires a mindset and a culture that is self-reliance where you are willing to do a lot of things in house.

Entrepreneurship In The Making

From the day he walked into Tesla, Gene says his brain was already fixated on “How do I start my own company? How do I build something like this?” He had even previously written a business plan for making electric cars in the U.S. market in his junior year at Stanford.

He then did a stint at Sutter Hill Ventures where he understood the VC lens when identifying entrepreneurs that have the potential for success. The key ingredients and how the lens is used to identify patterns includes the following:

1) Great markets defined by a great distribution

2) A strong product that captures the value

3) Founding teams equipped to resolve complex technical problems

Gene was traveling the world meeting many founders. During his time with Sutter Hill Ventures, Gene met his future co-founder, Gleb Yushin. Shortly after, Gene’s former Tesla colleague Alex Jacobs joined them as Sila Nano’s third co-founder.

After multiple conversations and understanding the value that each one of them brought to the table, they got started with a 1,000 sq. ft. lab in a basement at Georgia Tech and Sila Nanotechnologies was born.

Financing The Next Big Thing

Right after forming the team they went out to raise financing. They had a big advantage and that was the intellectual property Gleb had amassed which included six patents and four years of technical data around the problem they wanted to resolve.

They knew the technology was fully compatible and had a clear understanding of the road ahead given the years of experience at Tesla from Gene and his co-founder Alex.

They went out and raised a Series A round with Sutter Hill and Matrix as co-leads. Both of whom have continued investing in every round.

Sila’s most recent round of financing was a $170 million round led by Daimler. So far they’ve raised around $295 million.

The business positioning was critical as a lot of people had lost money in battery companies. From day one they were very clear they were not a battery company, but a technology company that makes materials for batteries. Batteries are a low margin market but the materials have a very healthy market as the better the product the higher the sales.

They are valued now at over $1 billion where storytelling played a big role. This is being able to capture the essence of the business in 15 to 20 slides. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

Sila Nanotechnologies

During the early days, the cofounders were able to recruit a group of talented engineers to join them and from there started to build the business.

Their business model revolves around inventing, developing, manufacturing and selling their product.

In this regard, their product is a powder that replaces graphite powder in existing lithium-ion batteries. The more efficiently you can store lithium, the less material you need for the same amount of energy. Sila Nano’s material can store energy more densely, giving you more energy at similar volume and weight.

Sila can reduce battery weight by approximately 20 percent or increase energy stores by approximately 20 percent with it’s material. Meaning vehicles have the potential to go 20% further than anyone else’s.

Consider that every electric vehicle will need around 15 to 20 kilos of this material. Think forward to a few years from now when all vehicles are electric. You’re talking about a market of 100 million new vehicles per year. At 20 kilos per car, you’re talking about 2 billion kilos of this entirely new-to-the-world material that has to be produced, every year.

This material could also be used to fuel new air taxis, and change the way we travel, and the aerospace industry.

Sila has been growing by around 40-50% every year for the past five years, and there are no indications of that slowing down anytime soon.

Listen in to the full podcast episode to find out more, including:

  • The essential ingredients for raising money
  • Gene’s top piece of advice for his younger self and new founders
  • How to grow as a leader when your team is growing at 92% in two years
  • His approach to solving strategic problems

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.

I am a serial entrepreneur and the author of the The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs. Most recently, I built and exited CoFoundersLab which is one of the largest communities of founders online. Prior to CoFoundersLab, I worked as a lawyer at King & Spalding where I was involved in one of the biggest investment arbitration cases in history ($113 billion at stake). I am an active speaker and have given guest lectures at the Wharton School of Business, Columbia Business School, and at NYU Stern School of Business. I have been involved with the JOBS Act since inception and was invited to the White House and the US House of Representatives to provide my stands on the new regulatory changes concerning fundraising online.

Source: He Was Employee Number 7 At Tesla And Now Has Built A $1 Billion Business That Makes Your Phone Or Car Run Longer

How To Beat Procrastination (Backed by Science) – Darius Foroux – Pocket

Procrastination has been around since the start of modern civilization. Historical figures like Herodotus, Leonardo Da Vinci, Pablo Picasso, Benjamin Franklin, Eleanor Roosevelt, and hundreds of others have talked about how procrastination is the enemy of results. One of my favorite quotes about procrastination is from Abraham Lincoln: “You cannot escape the responsibility of tomorrow by evading it today…….

Source: How To Beat Procrastination (Backed by Science) – Darius Foroux – Pocket

7 Ways to Achieve High Levels of Classroom Productivity – Lee Watanabe-Crockett

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When it comes to classroom productivity, the ideal classroom is a happy one. It means students are creating solutions and projects that have meaning and purpose. They gladly take initiatives and assume responsible ownership of class time. Above all, it means students are loving their learning.

Achieving high levels of classroom productivity means making sure students are interested and invested in tasks that develop higher-order thinking and problem-solving abilities. Not only are they involved in constructive pursuits and being given mindful assessments, they are learning independence and accountability and having a blast doing it. Now that’s learning with a purpose.

The joy a teacher gets from knowing students look forward to coming to class is indescribable. It’s one of those things you have to experience to understand. The good news is every teacher can have that feeling. These classroom productivity tips are applicable to many classroom environments. Hopefully, they help you in yours.

7 Pathways to Better Classroom Productivity

It’s easy to confuse productivity with speed of output. That’s not the essence of being productive. We can complete 100 trivial tasks in a day and say we were productive, but is that really true? What do we have to show at the end of the day? What have we done besides waste time on unimportant matters? Can we say “I really accomplished something today” and mean it?

Productivity isn’t about “getting stuff done.” It’s about getting stuff done with purpose.

You can always tell the level of interest students have. It can be used to help you measure productivity levels:

  • Are students focused and engaged?
  • Are they happy and attentive?
  • Are they asking deep, meaningful questions?
  • Are they excited about showing the results of their work?
  • Are they talking about their work with peers and parents?
  • Are they challenging themselves and each other to improve?

These are all traits of a productive classroom. Granted, there’s no specific formula for higher productivity. You can, however, use critical observation to decide what approach you could use

1. Build a Safe Space

Everyone deserves the chance to learn in a supportive environment. This applies to both intellectual and emotional classroom elements. Any classroom should make every student feel welcome. Maybe this means a time for peer-to-peer orientation. You can give students time to get to know each other and connect personally.

It could also mean creating a class mission statement of some kind. The focus of this would be things like:

  • We always support each other in and out of class
  • We always encourage each other and remain kind
  • We are a judgement-free classroom where all are welcome
  • We show we care by setting an example for the whole school

Begin learning adventures with the notion that learning is meant to be enjoyable. Part of this is creating a comfortable and supportive classroom. Anything that impacts a student positively in your classroom will help boost their productivity. Take some pointers from Brian Van Dyck, a middle school teacher in Santa Cruz.

2. Give Students a Say

Students are no different from anyone else. They like to know their opinions count for something. Letting students weigh in on how to use their class time can be valuable to fostering a productivity mindset. Don’t worry, this approach doesn’t mean they’ll waste time without supervision. You can do this while still keeping the structured direction central to any classroom. Open with questions geared toward productivity with breathing room:

Open with questions geared toward productivity with breathing room:

  • How do you feel your time would best be spent on today’s work/assignment?
  • What’s the one part of (insert project here) that you feel you need to focus on?
  • If you’re ahead, how can you help someone else with today’s work?
  • What do you think should be done first, and last?

Obviously, you as the teacher have the final say. That said, some heartfelt answers from students can help you choose how best to spend the class time.

3. Focus on Guiding Questions

As the work begins or continues, keep them thinking. Our modern students love to be challenged. Keep them guessing and thinking by asking about their projects. Show an interest in what they’re doing.

  • Why did they choose to approach the project this way?
  • What speaks to them about it?
  • If they’re stuck, how can they switch direction?
  • Do they feel there is any way they can make it even better?

4. Always Be Available

From time to time, students will struggle and this will happen on many different levels. When it does, they’ll need support and encouragement. They’ll get stuck, and that will give rise to technical questions, concerns, and doubts. They’ll feel pressure to keep up with their classmates. They’ll feel inadequacy, confusion, and frustration. They’ll feel like what they’ve done has been a waste. They’ll feel these things and a lot more.

Students are no different from anyone else. They like to know their opinions count for something.

Sometimes they’ll look for every reason to quit when they know they should go on. It will feel to them like the world is ending. It can happen with schoolwork and with personal matters. Eventually, it will likely all find its way into the classroom environment. Fortunately, that’s the heart of change.

With an open mind and the right words, you can turn that all around. Never be far away, because you’re still the best guide students have in their school experiences.

5. Encourage Collaboration

This is a hallmark of the modern student. They are natural-born collaborators and love working in groups. The secret to successful collaboration is when students are drawing on their individual strengths. They then find ways to harmonize those strengths in a group setting. A group work aspect to any classroom almost always means good things in terms of classroom productivity.

6. Offer Good Distractions

Every teacher knows that too many distractions in class can be harmful. Distractions, however, can be beneficial depending on the type. If they’re scheduled in the process, it’s even better. In this sense, they become more like rejuvenators and focus-sharpeners.

Here are some examples of beneficial distractions in class:

  • getting up to stretch, move around, and focus on nothing for a moment
  • eye/stretch/exercise breaks if working on computers
  • have students quickly check in with where they’re at on projects
  • story/joke breaks for some quick comic relief
  • schedule an assignment-related Q+A with a surprise class visitor

Here are some more great “distraction” ideas from Dr. Lori Desautels.

7. Let Students Self- and Peer-Assess

Self- and peer-assessment support comes from both students and teachers. Encouraging reflection and self-assessment adds a powerful dimension to learning. It reduces a teacher’s workload and lets students effectively demonstrate understanding. Students are honest in their assessment of their performance and that of their peers.

With this kind of assessment, students’ insights and observations are valued. It helps them understand the process of their own learning. It also reinforces the importance of collaboration.

Reflective practice is something both students and teachers should engage in. It lets you consider your actions and reflect on decisions. It solidifies learning concepts. It also helps you consider and plan future processes and actions.

 

 

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