I recently watched a fascinating video by Matthew Larsen where he shared what he calls “one of the greatest business practices” responsible for about 75% of his success. This concept, known as the Rule of Three, comes from business author Brian Tracy, and it’s more extreme than the familiar 80/20 principle. The idea is simple yet powerful: no matter how many tasks you complete, only three of them will generate 90% of your business value.
This concept resonated deeply with me. As someone who’s spent decades in online business, I’ve seen firsthand how easy it is to get caught in the trap of busy work rather than focusing on what truly moves the needle.
Finding Your Three High-Value Activities
What’s particularly interesting about the Rule of Three is that these high-value activities aren’t static. They evolve as your business grows. What drives results at startup stage differs dramatically from what matters at $1 million or $10 million in revenue.
For Larsen, his current three highest-value activities are:
- Developing and improving products
- Creating YouTube videos
- Making ad creatives
These activities align perfectly with what Naval Ravikant describes as the four types of leverage: labor, capital, code, and media. The most successful entrepreneurs maximize these forms of leverage to amplify their impact.
The Time Allocation Challenge
If three tasks create 90% of your value, logic suggests you should spend 90% of your time on them. For a business owner working 50 hours weekly, that means 45 hours focused solely on these critical activities.
But here’s the reality I’ve observed in my years of coaching entrepreneurs: most business owners spend the majority of their time putting out fires, handling administrative tasks, and getting lost in low-value work.
The solution? Track your time ruthlessly. Larsen recommends using time-tracking software on both your phone and computer to see exactly where your hours go. This awareness is the first step toward reclaiming your schedule.
Creating Systems to Free Your Time
The key to implementing the Rule of Three is developing systems that free you from everything else. This is where standard operating procedures (SOPs) become invaluable.
A comprehensive SOP should include:
- A step-by-step checklist anyone could follow
- Necessary links and login information
- Video tutorials demonstrating the process
- Examples of completed work
- Clear definition of when the task is complete
What I find most valuable about Larsen’s approach is his commitment to dedicating time specifically for creating these systems. He blocks three hours each weekend morning to document processes and build SOPs, which gradually frees up more of his weekday hours for high-leverage activities.
“90% of your time needs to be spent on the stuff that drives the business forward, and it’s not possible to do when you’re wrapped up doing all of these little microtasks.”
Making This Work For You
I’ve implemented similar principles in my own businesses over the years, and I can attest to their effectiveness. When I focused on identifying and prioritizing my highest-value activities, my productivity and results improved dramatically.
To apply the Rule of Three in your business:
- Track your time for one week to establish a baseline
- Identify which three activities create the most value
- Block 3-6 hours weekly to create systems for everything else
- Gradually delegate or automate low-value tasks
- Reassess your three highest-value activities quarterly
Remember that your highest-value activities will change as your business evolves. What matters most is maintaining the discipline to focus on what truly drives results.
The Rule of Three isn’t just about productivity—it’s about intentionality. By consciously choosing where to invest your limited time and energy, you can achieve exponentially better results while working fewer hours. In a world of endless distractions and demands, this focused approach might be the competitive advantage your business needs.
