#116 — Coca-Cola’s 70/20/10 Formula

Founders should use data to identify which tactics, channels, or products consistently deliver core results—those become the '70%' (proven bets). The '20%' goes to pilots showing early traction (new segments, channels, or features with promising conversion rates but limited data). The '10%' is reserved for bold, experimental initiatives: think launches in new geographies, major pivots, or untested viral campaigns. For example, SaaS startup Loom put most energy into frictionless video messaging (core), tried lightweight team integrations (next bets), and ran unique campus ambassador programs as moonshots.

Absolutely. When Airbnb started, their '70%' was optimizing listings and user flows for travelers. Their '20%' involved testing new verticals like 'Experiences.' And the '10%' was allocated to big experiments—like launching Airbnb Magazine and novel City Hosts pilot programs. Over time, some experiments like 'Experiences' became core revenue drivers, while others quietly disappeared.

Quarterly is ideal for most startups, or whenever the market or growth data shifts substantially. Rapid scaling or changing economic conditions may require monthly reviews. For instance, after COVID hit, Peloton reallocated focus from physical showrooms ('core') to digital events ('next bets'), ultimately promoting digital into their core.

It applies broadly: product roadmaps, engineering investment, even talent acquisition. For example, Notion uses the rule for feature development—70% on core user experience, 20% adapting templates for niche audiences, 10% exploring AI integrations and experimental workflows.

Mistakes include starving the core (not investing enough in what's working), over-weighting experiments with little hypothesis clarity, or never graduating successful pilots to core strategy. Another error: ignoring the feedback loop and failing to measure outcomes, which can trap founders in endless tinkering without progress.

Track leading indicators like feature adoption rates, engagement boosts, viral share metrics, and early retention data. For example, if a SaaS founder launches a new onboarding flow, initial churn, uptick in daily active users, and support tickets can reveal if it's worth scaling into the ‘core.’

Make allocations transparent—show dashboards categorizing efforts and budget as 70/20/10. Link allocation changes to key learnings or market shifts. Case in point: Figma’s leadership openly reviews quarterly bets, discussing which pilots move up or out, so everyone sees the logic behind resource shifts.

Yes. Its disciplined focus reduces constant pivot temptation, ensures most resources fuel known growth, and provides a safe sandbox for innovation. By allocating risk upfront, founders gain peace of mind—knowing the bulk of energy sustains the business as experiments run in parallel.

Absolutely. Google famously used 70/20/10 for innovation budgeting, putting resources into core search products (70%), adjacent bets like Gmail and Maps (20%), and wildcards like Project Loon and self-driving cars (10%).

Audit your weekly calendar and budget allocations—categorize everything into 70/20/10 buckets. Immediately reallocate hours or spend to match the ideal split. Example: If you’re spending 30% of your week on experimental ideas, cut back and refocus on doubling down where growth is proven.

The 70/20/10 rule for startups is a resource allocation model that recommends spending 70% on proven growth channels, 20% on emerging opportunities, and 10% on experimental ideas. Unlike traditional frameworks that may focus on rigid budgeting or waterfall planning, 70/20/10 encourages a dynamic blend of optimization, innovation, and moonshots—helping early-stage ventures balance stability and adaptability.

Founders with lean teams can apply the 70/20/10 rule by mapping weekly tasks (time, focus) rather than strictly money. For example, if 6 out of 8 weekly hours go to core sales outreach, 1.5 to pilot tests (like TikTok campaigns), and 0.5 to wild experiments (chatbot, viral contest), you’re aligned—with or without a big spend.

Absolutely. Remote and distributed teams benefit from the framework’s clarity: allocate asynchronous work in 70/20/10 buckets (core ops, pilot projects, blue-sky sprints). Tools like Notion or Trello can visualize execution and reporting. Zapier, for example, used this method to scale both core integrations and experiment with new automation features within a fully remote workforce.

Ignoring the 20/10% innovation categories leads to stagnation, missed new market trends, and loss of competitive edge. The SaaS graveyard is full of startups that bet only on what worked yesterday and missed rising channels or shifting user needs. Example: Blockbuster stuck with their core and lost to Netflix’s experimental streaming model.

During crises or market shocks, founders can temporarily shift allocations—sometimes swinging 70% into experiment-driven pivots. But the rule still guides survival: keep one eye on the proven core while rapidly investing in higher-risk adaptation. For example, during COVID, many DTC startups put core fulfillment on autopilot and moved resources toward digital events and virtual experiences.

Yes — project management platforms like Asana, ClickUp, or Monday.com offer custom fields for tagging workstreams as 70/20/10. You can use Airtable or Google Sheets templates to visualize spend and time allocation across categories. Startups like Superhuman used internal dashboards to monitor ongoing allocation and update priorities as learning emerged.

Startups like Duolingo used 70/20/10 to scale their core core language courses, pilot new features (like podcasts), and experiment with gamified social elements. The result? Virality and monetization strategies emerged from the 10% experiments and became part of Duolingo’s core offering.

The 70/20/10 model is about intentional resource allocation for risk and innovation; the Pareto Principle identifies the 20% of inputs that yield 80% of outputs. 70/20/10 intentionally carves out space for emerging and experimental bets—whereas 80/20 often leads to focusing only on what is already working.

Yes. Early-stage companies often benefit from higher experimentation. Case: Slack evolved from a 10% experiment during game development into a 70% core offering after product-market fit was achieved.

Track each initiative’s costs, conversion rates, and user retention. ROI for the ‘70’ may be clear from sales and retention data, while ‘20’ and ‘10’ require milestone KPIs: adoption rates, engagement spikes, viral growth, or subsequent funding from investors. For example, Robinhood tracked new user spike and engagement during its mobile beta (a 10% bet), then scaled the offering after seeing strong ROI.