https://youtubetranscript.com/?v=8z3OZ7QuJE0
Price’s law, here’s Price’s law. This is something to hammer into your heart. The square root of the number of people in a domain do 50% of the work. Okay, so let’s go through that. You have 10 employees. Three of them do half the work. Makes sense. That’s reasonable. You have 100 employees. 10 of them do half the work. That’s a problem. The other 90% are doing the other half. Who cares about them? You have 10,000 employees. 100 of them do half the work. Right, so here’s a nasty little law. As your company grows, incompetence grows exponentially, and competence grows linearly. Got it? Right? Because with 10, it’s three who are doing half the work, but at 10,000, it’s 100 that are doing half the work. So, 9,900 of your employees are doing as much as the best 100. You might not even know who the best 100 are, but probably they know. And maybe their peers know too. And so one of the things that’s really interesting, when big companies start to shake, which means maybe they’ve had a bad quarter, two bad quarters, and the stock price starts to tip down, and the people, the hot people who have options are not very happy about that, and maybe they start to announce layoffs, the 100 people who have opportunities leave. And they’re the ones who are doing half the work. So boy, that puts your company in a pretty rough situation, because now you’ve got the 9,900 people left over who are only doing half the work. And the next time you announce layoffs, the next most productive 100 leave. And so then you’re left with nobody who’s productive at a massive overhead payroll. Price’s Law. You can look that up. DeSola Price. DeSola Price is a guy who was looking at scientific productivity. And one of the things he found was, when he was looking at PhD students, is that the median number of publications for a PhD graduate, when he did his work, which was in the early 60s, was one. Okay. Half as many had two. Half as many as that had three. Half as many as that had four. It’s a real step down. And one of the corollaries of that is that there’s a certain number of people who are hyperproductive. And that’s these people out here. And if you were graphing the distribution, let’s say you graphed how many people in a population of 300 had $10,000 in a savings account. It would look very much like this. Some of them would have… Some of them would… Most people would have like no savings whatsoever. The median person would have no savings whatsoever. And then you go up here, where the 1% is, they have all the money. But the thing you want to understand about that 1% issue that you always hear about is that it applies in every single realm where there’s difference in creative production. Every realm. Doesn’t matter. Number of records produced, number of records sold, number of compositions written. So here’s an example. Five composers produce the music that occupies 50% of the classical repertoire. Right? Bach, Beethoven, Brahms, Tchaikovsky. Mozart. That’s right. Those five. Okay, so here’s something cool. So you take all the music those people wrote. 5% of the music all those people wrote occupies 50% of the music of their writing that’s played. So not only do almost all the composers never get a listen, but even among the composers who do get a listen, almost none of their music ever gets played. So then that’s another example of this Price’s Law scaling. So it applies to all sorts of things. Like number of hockey goals scored is also distributed this way. Number of basketballs successfully put through the hoop follows the same distribution. Size of cities follows the same distribution. It’s a weird law and you can think about it in part… Why does this happen? Well, imagine what happens when you play Monopoly. What happens? Everybody has the same amount of money to begin with. Right? So then you start playing. It’s basically a random game. Well, some people start to win a bit and some people start to lose a bit. And then if you win the probability that you’ll keep winning starts to increase. And if you lose, your vulnerability increases as you lose. And then maybe you’ve got say six people playing Monopoly. Soon one person has zero. What happens when they have zero? They’re out of the game. So zero is a weird number because when you hit zero you’re out of the game. So then if you keep playing people start to stack up at zero, right? What happens at the end of the game? One person has all the property and all the money and everyone else has none. Right, that’s what happens if you play an iterated trading game to its final conclusion. And that’s part of the law in a sense that’s underlying this kind of distribution. So it’s really… it’s not a consequence necessarily of structural inequality. It’s built into the system at a deeper level than that. So you know people talk about all the time about how unfair it is that the 1% of the population has the vast amount of the money. And 1% of the 1% has most of that money. And 1% of the 1% of the 1% has most of that money. But it is a… it’s an inevitable conclusion of iterated trading games. And we don’t know how to fight it. We don’t know how to take from the people who have and move it to the bottom without it instantly moving back up to the top. Different people maybe. But still back up to the top. Because even the 1% churns a lot. Like I think you have a 10% chance, if I remember correctly, you have a 10% chance of being in the top 1% for at least one year of your life. And a 40% chance of being in the top 10% for at least one year in your life. That’s in Canada and the US. It’s less so in Europe. So there’s a fair bit of churning at the top end. It’s not the same people all the time who have the money. But it is a tiny fraction of the people all the time who have all the money. So it’s a little bit of a different way of thinking. But it’s a little bit of a different way of thinking. So it’s a little bit of a different way of thinking. So it’s a little bit of a different way of thinking. So it’s a little bit of a different way of thinking. So it’s a little bit of a different way of thinking. So it’s a little bit of a different way of thinking. So it’s a little bit of a different way of thinking. So it’s a little bit of a different way of thinking. So it’s a little bit of a different way of thinking. 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