What is the Pareto Principle, or 80/20 rule and how does it apply to product management?

Remember to define how the 80/20 rule applies specifically to product management. Also, including an example of how you applied the principle in the past will add value to your answer.

"The 80/20 rule states that eighty percent of the value of the work done, on a project or at a higher level, will be derived from focusing on twenty percent of the most impactful work. For example, Microsoft found that they could solve eighty percent of the crashes and errors in their software by resolving the top twenty percent of the reported issues with their systems. In a product management context, the rule is used to identify the twenty percent of features that will generate eighty percent of the value that can be derived from feature development.

I applied this principle directly in my work as a product owner at my last company. I held brainstorming sessions with my business owners and stakeholders to create a list of opportunities and issues with our product. We then did an impact assessment and used it to prioritize the list. We identified more work than we had left in our budget for the year, so I suggested we apply the 80/20 rule. We identified the top twenty percent of the items we had prioritized and identified those items as our features that would be the most impactful to work on. We left the other items in the list as possibilities to work on once the top twenty percent was complete and quickly found that many of those items became non-issues once the most impactful items were developed and released."