{"id":7916,"date":"2020-03-10T11:42:00","date_gmt":"2020-03-10T15:42:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=7916"},"modified":"2022-04-01T15:10:44","modified_gmt":"2022-04-01T19:10:44","slug":"vanity-metrics","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/vanity-metrics\/","title":{"rendered":"The 7 Vanity Metrics You MUST Avoid"},"content":{"rendered":"\n

What are vanity metrics? Why are they so bad for understanding your startup? Learn the key vanity metrics you must avoid, and how to avoid them with the right approach.<\/p>\n\n\n\n\n\n\n\n

Introduction to Startup Metrics<\/h2>\n\n\n\n

As Eric Ries says in The Lean Startup, The job of a startup is to:<\/p>\n\n\n\n

  1. Build an MVP to measure where it is now<\/li>
  2. Experiment to improve the metrics<\/li>
  3. Decide whether to continue in the same direction or pivot in a new direction.<\/li><\/ol>\n\n\n\n

    Defining the right metrics that actually matter to your business is critical. Before giving examples of good metrics, we\u2019ll define common bad metrics startups choose.<\/p>\n\n\n\n

    Why Vanity Metrics are Bad<\/h2>\n\n\n\n

    The most insidious kind of metrics, vanity metrics, give you false optimism \u2013 it SEEMS like you\u2019re making great progress, but in reality you\u2019re actually stuck.<\/p>\n\n\n\n

    Often, vanity metrics are metrics that have no choice but to keep increasing over time<\/strong>. One common example is total user count. Let\u2019s say your app adds 1,000 users every week. At the end of 10 weeks of hard work, you have 10,000 users. This is a big number!<\/p>\n\n\n\n

    Except you aren\u2019t growing any faster \u2013 you\u2019re still adding 1,000 users every week. Your hard work actually didn\u2019t change your growth rate<\/em>.<\/p>\n\n\n\n

    These vanity metrics are misleading because they keep increasing over time, making you feel good. But think about a silly metric like number of hours worked. Every day, you and your team each add 10 hours to the total count. At the end of the month, you proudly announce to the team, \u201cthis month, we added 1,250 hours to our Total Hours Worked metric. This is great progress. Good job, team!\u201d<\/p>\n\n\n\n

    This may sound silly, but think about how many founders you\u2019ve heard brag about how many hours they work. What actually matters are the results<\/em> they achieve. They might not focus on these non-vanity metrics as much!<\/p>\n\n\n\n

    Another type of vanity metric tracks results that aren\u2019t actually critical to business function<\/strong>. For instance, early startups worry about racking up press mentions or making new hires. While these may help the business move, they\u2019re not the actual core of the business \u2013 your company doesn\u2019t exist to hire employees, it exists to create value for customers<\/a> and create profits for shareholders.<\/p>\n\n\n\n

    These common vanity metrics are all problematic:<\/strong><\/p>\n\n\n\n