Laws, Rules and Principles

Quick contexts to sort the world

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coffee is good

History tends to repeat itself or at least rhyme. Events tend to fall into patterns. Being aware of those patterns is like peering into the fabric of the world.

Here is a list of interesting data driven properties that shed light on how our world works and how we operate.

Bifurcation

Moore’s Law

Moore’s Law is the most popular deep insight into the exponential growth and adoption of technology. Gordon Moore was referring to the doubling of transistors on silicon over time but the function he described has been shown relevant in lots of other cases.

Metcalfe’s Law

This is another growth equation that is quadratic (see the comment below) that states the value of any network, like the Internet, increases rapidly as more and more people connect to it. Metcalfe’s law is named after Bob Metcalfe the founder of 3Com and the inventor of Ethernet. Metcalfe’s law states the effect of a network is proportional to the square of the number of connected users of the system.

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This is more generalized as the network effect in microeconomics and is used in Silicon Valley to map fast growing adoptions of new technologies when valuing startups.

The visionary technology writer George Gilder is credited with coining this insight as Metcalfe’s Law.

Law of Accelerating Returns

This was laid out by Ray Kurzweil in his conclusions relative to our accelerating rate of change and his predictions about the future and the Singularity. He said,

“Each epoch of evolution has progressed more rapidly by building on the products of the previous stage.”

Fibonacci Series

Here is a post about another growth function that is ubiquitous in nature.

Pareto Principle

The Pareto Principle is named after the Italian economist and sociologist Vilfredo Pareto. It states that 80% of results come from 20% of effort. This concept has lots of applications when trying to focus on the most important things to do; the biggest bang for the buck type stuff. It is an important way to prioritze for accelerated learning.

In sales it is a well known phenomenon that 80% of sales come from 20% of customers. Those are the ones to focus on and cultivate. Coca Cola has a special group called power users. These are the 20% of Coke drinkers that drink 80% of Coke. Casinos comp their high rollers on rooms, drinks, and food because they represent the bulk of their revenues.

Elite athletes concentrate their training on the 20% of the exercise and habits that provide 80% of the impact and results. In sports, like baseball, 20% of the players create 80% of the wins.

Anna Karenina Principle

This phenomenon is named for the first sentence of Tolstoy’s epic novel.

“Happy families are all alike; every unhappy family is unhappy in its own way.”

- Leo Tolstoy

Here is a post about it.

Parkinson’s Law

Parkinson’s law is the adage that:

“work expands so as to fill the time available for its completion”.

Committing to deadlines can help us combat this debilitating scenario. Remember: perfection is the enemy of good enough.

Peter Principle

The Peter Principle helps explain why organizations get bogged down and bureaucracies become dysfunctional. It has to do with hiring and selecting candidates for promotion.

It states that the selection of a candidate for a position is based on the candidate’s performance in their current role, rather than on abilities relevant to the new role. In these cases past is not prologue. Generals always study and fight the last war.

Thus, employees only stop being promoted once they can no longer perform effectively. The Peter principle is therefore expressed as: “In a hierarchy every employee tends to rise to his or her level of incompetence.”

This doesn’t just apply to hierarchies. People with outsize ambitions and aspirations always want to be in a bigger and better role. Actors want to direct, radio hosts want to be on TV, politicians are always campaigning for the next highest office. Like Icarus they fly too high and their wings eventually melt and they tumble.

Zeigarnik Effect

The Russian psychologist and social scientist, Bluma Zeigarnik, uncovered this effect as she was sitting at a café in Vienna. She noticed that her waiter remembered the details of a large order perfectly until each customer was served. After they were served, the order details disappeared from the waiter’s memory.

After researching the phenomena, Zeigarnik discovered that people will remember the details of a task until it is completed and then forget much of it. And once begun, there is an underlying psychological imperative to finish the task.

Remembering things over a short period is a function of what neuroscientists call Working Memory. Working memory accesses the parts of your brain that let you hold on to things temporarily and draw upon them quickly.

Written by

Founder of MBA-ASAP.com Author of MBA ASAP and The Way to Wealth; get free stuff http://eepurl.com/b8UzpL

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