18 laws · Business & strategy laws
Famous business laws and principles every owner should know
The rules of thumb that keep showing up in companies of every size: where results really come from, why plans fail, and how incentives and systems behave once real people get involved.
Pareto Principle (80/20 Rule)
Roughly 80% of results come from 20% of causes — a small share of customers, products, or efforts drives most of the outcome.
Murphy's Law
Anything that can go wrong will go wrong — so design plans, processes, and products assuming failure will eventually happen.
Goodhart's Law
When a measure becomes a target, it stops being a good measure — people optimise the number instead of the result it was meant to track.
Gall's Law
A complex system that works is always found to have evolved from a simple system that worked — complex systems designed from scratch rarely do.
Sturgeon's Law
Ninety percent of everything is crud — in any field, most output is mediocre, so quality is judged by the best ten percent.
Lindy Effect
For non-perishable things like ideas, books, and technologies, every extra year of survival implies a longer remaining life expectancy.
Matthew Effect
Advantage compounds: those who already have status, customers, or capital tend to gain more, while those behind fall further back.
Law of Unintended Consequences
Actions taken by people, companies, or governments always have effects that were not intended — some helpful, some harmful.
Cobra Effect
An incentive meant to solve a problem makes it worse because people find a way to profit from the problem itself.
Chesterton's Fence
Don't remove a rule, process, or ‘fence’ until you know why it was put there in the first place.
Occam's Razor
When several explanations fit the facts, prefer the simplest one — the one that needs the fewest assumptions.
Hanlon's Razor
Never attribute to malice what is adequately explained by mistake, ignorance, or busyness.
Law of the Instrument (Maslow's Hammer)
People over-rely on the tool or skill they know best — if all you have is a hammer, every problem looks like a nail.
Amara's Law
We tend to overestimate the effect of a new technology in the short run and underestimate it in the long run.
Metcalfe's Law
The value of a network grows roughly with the square of its number of users — each new member adds value for everyone already there.
Moore's Law
The number of transistors on a chip doubles about every two years — shorthand for computing getting exponentially cheaper and more powerful.
Kidlin's Law
If you can write the problem down clearly, the matter is half solved.
Streisand Effect
Trying to hide, remove, or censor information usually makes it spread further.