I believe everyone has heard of Matthew effect . It refers to a social phenomenon where the stronger the stronger the weaker the weaker, and it is widely used in finance, business, psychology and other fields.
Matthew effect In fact, the familiar " 28 law " is very similar. It means that 20% of people in society occupy 80% of their wealth. In other words, wealth is not distributed equally.
The law of 28 and the law of power 1 are actually very similar, because the meaning it expresses is somewhat similar to the law of 28, and it also proposes that the person is the same person, both of which were proposed by the economist Vilfredo. Pareto .
power rule means that in any set of transactions, only 20% of them really play a key role, and the remaining 80% are secondary.
The description of this kind of poorer people, the richer people are richer. As early as 2,000 years ago, there was a similar allegorical story in the Bible "New Testament Gospel of Matthew". The story clearly states that if there is one, you should give it to him twice as much as possible to make him redundant; if there is nothing, you should take away what he has now.
In order to verify the accuracy of these so-called Matthew effect, the 28th law, and the power law, the famous management consulting company McKinsey began to conduct a 15-year follow-up survey on the operating performance of 2,393 large enterprises around the world in 2003.
In 2018, McKinsey survey data showed that for every $10 profit generated, more than $8 entered the top 20% of companies. This survey result just verifies the correctness of the relevant rules.
What is even more exaggerated is that the profits of leading companies are more than 30 times that of waist companies. Please note that this is just a comparison between the head and the waist. If the head and the tail are compared, the result may be astronomical.
In fact, in addition to profit, revenue scale, customer scale and sales channel scale also follow the power rule. What inspiration does the
power rule give us?
First, you must become a leading company. Becoming a leading company should be the goal of every entrepreneur to start a business, because only being a head is the moment of profit explosion. Because the profit of a company is not distributed according to the rules of hard work and gaining more. Instead, once a company breaks through the critical point, the money you make in the future may be the money you made in the previous year, which is the reality.
Some people may say, "I just started a small business, and I am still thousands of miles away from becoming a leading company in the industry. What should I do?"
Don't forget that the power law applies in many fields. Some people may have doubts that 80% of the wealth in this society is occupied by 20% of people. If 80% of the poor are excluded, how will the wealth of the remaining 20% of the rich be distributed?
power rule still applies to the wealth of only 20% of the rich, that is, the wealth of the rich among the 20% of the rich accounts for 80% of the total wealth of the rich. The remaining 80% of ordinary rich people account for 20% of the wealthy people's wealth.
If our company is still small, you don’t need to rush to become a leading company in the entire industry. You can try to become a local leading company first. After achieving the goal locally, he has become 20% of the local rich people. If we advance in an orderly manner at this time, we may one day become the leading enterprise in the entire industry.
Therefore, no matter what, as long as you want to be financially free, you must develop in the top companies.
Second, the company's decisions should be focused. If we want small businesses to become local leading enterprises, this is not an easy thing, because the traditional industry leader is bigger than you in terms of capital and scale, why should you surpass it?
You cannot make decisions according to the standards of leading companies in many aspects. For example, local leading enterprises spend 30 million yuan in advertising fees a year, recruit more than 1,000 people, and run many departments, which are strengths that we do not have.
We cannot benchmark the leading companies in many aspects. What we need to do the most is to concentrate our superior forces at several key points, and then consider multi-channel development after we have a certain amount of strength.
As an example, suppose our company has only 10 marketing personnel in total, and their channel promotion is very orderly. As long as we move forward according to this progress, we have the hope of becoming one of the top ten locals. Then we should continue to focus on the construction of this channel and increase investment and increase the progress of market development.
Many times, we originally had good other practices, but when we see someone making a lot of money by selling goods through live streaming, we can't help but want to challenge it. When we see that our peers make a lot of money through exports, we can't help but recruit people to explore overseas markets. These will unlimitedly disperse our strength, which will eventually lead to the company's money being spent, and we don't see much effect.
Since we have understood the power law, we must keep our breath and strive to focus on the most critical 20% decisions. Other decisions can be let go appropriately and let other managers do it.
Third, get through the critical point. Many big Vs in did not suddenly rise to tens of millions of fans. They also had a slow increase in fans at the beginning, but later, after a certain video exploded, there was a certain natural traffic. At this time, the effect of traffic superposition began to form, and eventually the increase in fans became faster and faster. It may take 3 years to go from 0 to 1 million fans, but it may only take 3 months to go from 1 million to 10 million fans. This is the wonderful reaction after breaking through the critical point.
Therefore, no matter what we are doing now, as long as we believe that the future is good, we must deepen our efforts. After you get through the critical point, a new world will appear in front of you.
This is the best era and the worst era. With capital thinking and innovative models, the whole world is your stage!
In the world of new business, there are no eliminated industries, only eliminated products and outdated business models. In the future, all business competition will focus on in product innovation and model innovation.
A company or a boss is destined to be defeated early if the innovation ability is short. Please remember that without innovation, there is no imagination!
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