How Dropbox, Airbnb and Facebook applied the Pareto principle to build a winning MVP – and how you can do it too.

When I started studying economics in depth, I fell in love. The theories explained phenomena that fascinated me in real life, and suddenly everything made so much sense. In the entrepreneurship course I taught, on the other hand, I felt that academic theories were often simply disconnected from reality. Maybe it's the distance between theory and the field, maybe it's the fast pace of evolving technology versus the lumbering pace of academia? But not so with borrowing economic principles. If there is one thing I have learned in recent years, it is that hard work is not necessarily smart work.

As entrepreneurs, we tend to rush ahead with every feature and every idea that seems brilliant, only to discover that we invested a great deal of time and resources in things that didn't really deliver the result we hoped for. This is exactly where the Pareto principle comes in – the 80/20 rule, which says that 80% of your results will come from 20% of your efforts. When entrepreneurs hear about the Pareto principle (80/20), they usually associate it with time management or resource allocation. But the Pareto principle is also a critical key to developing a minimum viable product (MVP). It is the principle that guides you to focus on the 20% of features that will give your customers 80% of the value.

When the founders of Dropbox, Airbnb and Facebook started their journey, they chose just one or two features, and those were the ones that drove most of their success. Drew Houston, the founder of Dropbox, understood that the market already had cloud storage solutions. So he chose to focus on one simple feature: seamless file syncing across devices. Instead of building a complete product from the start, he created a short video showing how it was supposed to work. Thousands of users signed up based on the video alone – before the product was even ready. That is the power of focusing on one key feature, the 20% that really makes a difference. When Airbnb started, the founders didn't build a complex system. They identified a specific problem – the lack of available accommodation during conferences and events – and created a simple platform that connected people looking for a place to sleep with apartment owners. No complicated systems, just a quick solution to an urgent problem. That was enough to spark interest and generate initial growth with minimal initial investment.

So how can you find the 20% of your venture? I'd like to suggest 4 key questions as a thought exercise.

1. What problem does my product solve? What is the main problem your customers are dealing with? If you can't explain it clearly, you are probably spreading yourselves too thin and heading in the wrong direction. Focusing on the core problem will help you sharpen the features that need to be at the heart of your MVP.

2. Pain point: Make a list of all the problems your customers run into, and rank them by level of pain or urgency. A pro secret - the top 20% of those problems are exactly what your product needs to solve

3. Find a customer before the product: Before you rush to spend all your investors' money on development, present your idea to potential customers. Listen for where the real excitement is, and which features they feel they need right now

4. Benchmark, benchmark and benchmark again: Who are your competitors? What do they do better than you, and where can you innovate? Sometimes the solution is not to reinvent everything but to improve an existing solution in a smarter way.

5. No-code - just like Dropbox, you really don't have to build a complete product from the start. Create an initial version using simple tools – a presentation, a video or even a manual demo – and see how users respond. Today there are excellent apps that do this for just a few dollars, like bumble for example. It's a great way to identify the important features before investing in a developer and development.

In conclusion, developing a successful MVP doesn't require offering everything to everyone. Quite the opposite: it requires precise focus on the 20% that will bring you 80% of the results.