Pareto Squared a.k.a. The Corbin Corollary

The other day I was having breakfast with David Corbin of Dynamic Concepts Development and he used an interesting model to describe his target market.  David does enterprise software development projects.  Given that most enterprises have internal IT capability, you’d think it would be tough to get a foot in the door, but David has a unique niche based on an extension of the time-honored Pareto Principle.

As he puts it, 80% of the enterprise development work can be handled in house with existing resources.  Of the remaining 20%, 80% can be accomplished through modest extension of existing capabilities (e.g. training).  The remaining 20% (of the original 20%) involves complexity that requires breadth/depth of skills beyond the in-house capability or reasonable extensions thereof.  Hence his niche of opportunity. He calls it the critical “4%” (20% of 20%, or Pareto Squared).

What This Means For Your Business

I think David’s onto something here, beyond solving nasty enterprise software problems.  The rules apply to the enterprise as a whole.  If you want to be “innovative”, if you’re looking for “disruption”, if you want to break ahead of the pack, you need to be looking hard at the 4%. Continue reading