Thoughts on Price's Law

Published on 2019-12-31 by John Collins.

After nearly two decades of working in the software development industry, I know from experience that some people are a lot more productive than others. For example, you will often hear the legend of the "10x developer", that mystical coder that is ten times more productive than the others in their team.

One interesting finding from my research on culture and productivity is that this is codified into "Price’s Law", which broadly states that:

“50% of the value added will be delivered by the square root of the amount of workers.”

E.g. With 100 employees, typically 10 of those will generate 50% of the output (i.e. your heroes).

It is critical to note that while the organization can grow in size rapidly, the square root of that head count grows quite linearly. Observe for example the following table:

Org size Square root (heroes) Percentage who are heros
10 3 30%
100 10 10%
1000 32 3.2%

This relationship is covered very clearly in the following presentation by Dr Jordan Peterson on the subject of Price's Law and how it relates to productivity in organizations:

So how do we reverse that trend? Right now it feels to me like I am fighting a fundamental law on that (like gravity), but if I figure out a strategy in 2020 I will publish it here.