No. 198 · Strategy · Statistics and Probability
Power Law
In many areas, a few things account for most of the results.
In the Almanac
“Zipf counts words”, 1935–1949 · “Rovio”, 2009
Both stories in full, three ways to use it and where it misleads.
Get the AlmanacListen · Watch
Questions
What is Power Law?
The Power Law describes lopsided worlds: a few words, cities, apps or projects dominate, while most stay small. George Zipf found the most common English word appears about twice as often as the second. Rovio made 51 modest games before Angry Birds outearned them all.
How do you use Power Law?
When outcomes follow a power law, averages mislead. Identify the few tasks that drive most of your results, keep making low-cost attempts so you're around for the rare big win, and check first whether your situation is truly lopsided or just ordinary.
When does Power Law matter?
Power Law is one of the 56 mental models for strategy, the situations where you ask: How do I win when others want the same thing? Within that, it belongs to “How markets grow and tip”, alongside Crossing the Chasm, First Mover Advantage and Flywheel.
What is an example of Power Law?
Two stories show it at work: Zipf counts words (1935–1949) and Rovio (2009). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.
Which mental models are related to Power Law?
Pareto Principle, Fat-Tailed Distributions and Normal Distribution. Power Law itself comes from statistics and probability.