Why TikTok’s “90/10 business model” is one to avoid

“I got it off TikTok” might be a reasonable phrase when talking about DIY hacks or new outfits. But not so much for deciding your business strategy.

The platform’s immense popularity over the years has led to countless trends. And among the viral dances, funny sounds and clever life hacks, TikTok has also become a breeding ground for business advice — some helpful, and some better off left in the drafts.

This includes the famous 90/10 model, which promises quick success, but often oversimplifies the hard work behind starting a business.

While it’s easy to get influenced by TikTok and other social media platforms, here’s why the 90/10 model is something you’ll probably want to scroll past.

What is the 90/10 model?

The 90/10 model refers to the theory that 90% of your success will come from just 10% of your efforts. Its followers say that entrepreneurs and sole traders should focus on a few core tasks that really make a difference, rather than trying to do everything at once.

Some business owners on TikTok report using the 90/10 rule to focus on a specific target market or product line that generates the largest profit.

For example, a company might find that just 10% of its customers generate 90% of its revenue, or that 10% of its products make up the majority of sales. By focusing on these specific customers or products, businesses can improve profits and grow faster.

While this rule has existed long before TikTok, it has become popularised on the platform as quick business advice. It may sound simple and effective at first, but it often overlooks the ongoing effort, strategy and challenges that come with running a business.

The risks of the 90/10 rule

TikTok videos might make the 90/10 rule sound like a magic shortcut for success. However, putting all your eggs in one basket can come with some significant risks.

For one, focusing only on the top 10% can mean missing out on potential opportunities or capitalising on a smaller customer base that could grow later on. There’s also the risk of focusing on chasing “quick wins” instead of developing long-term strategies. 

Moreover, if one or more of those repeat customers leave or reduce their business, it can create a big hole in your profit margins and revenue that’ll be hard to fill quickly.

Plus, while the “vital 10%” may grab most of the attention, some tasks or processes outside that group are equally important for everyday operations, staying compliant, and keeping customers happy. Overlooking these details can cause problems that hurt your business in the long run.

For example, a company that only focuses on its best-selling product might ignore rising trends or changing customer needs — until a competitor swoops in with something new and steals the spotlight.

Richard Hunt, Director at Liquidation Centre, says the 90/10 rule ignores what’s unique about a business, like  “different goals, brands and challenges”.

“Taking advice from brief, generic clips, often without proper sense-checking, can harm your business”, he adds.

Why viral doesn’t always mean valuable

Workplace and HR-related topics have become a regular feature on TikTok. Known as #WorkTok, this corner of the platform has fueled several workplace trends, and while some have advantages, not all of them are necessarily healthy for businesses.

Most notably,  some disengaged workers began “quiet quitting” by doing the bare minimum in their work. However, this has backfired, with the creator of the trend recently admitting he thinks the practice is “unsustainable”.

Employers also jumped on the bandwagon through quiet firing (creating an unfavourable work environment that encourages resignations). Similarly, while this tactic might seem like an easy solution, it can end up seriously hurting employee morale and trust.

It’s not all bad. Some WorkTok hacks, such as explanations on how to speak professionally using “corporate talk”, have helped to boost younger employees’ confidence when it comes to having difficult conversations at work. 

But for founders, particularly when it comes to decisions that could affect your bottom line, Hunt says it’s a smart idea to take your WorkTok feed with a pinch of salt. After all, running a business takes more than just viral tips and catchy buzzwords.

“As misinformation grows and platforms such as TikTok continue to influence the masses, it is more important than ever to stay grounded and ensure the information you consume is verified, credible, and truly relevant to your industry”, says Hunt.