#269: Monday Memo: The Bell Curve Fallacy and the Importance of the Long-Tail

What’s one of the biggest fallacies in business & finance and which is holding our performance back?

It’s that performance & results of both staff and enterprises follows a normal bell-curve distribution! It simply doesn’t! Intuitively we know this because 50% of newly registered businesses will fail in 5 years following an exponential Paretian power curve, 5 companies make up 18% of the stock market value in the US, and on sports teams most of the money goes to those who generate the most value with most of us earning below the average. In any endeavor there are those who smash performance out of the park and then the rest of us, or as some call the long tail.

In this bite-sized episode I explain why so many of us continue to use the normal distribution fallacy and a more appropriate way of looking at this.


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