5 Characteristics of Vanity Metrics

Using vanity metrics is one sure way to destroy your startup. Vanity metrics can lead you to the wrong path. Being able to identify them and replace them is a must when running a business and especially so when running a startup. Here are some simple rules to help you identify vanity metrics.

1. Represents a total of something #

One of the main characteristics of a faulty metric is that it is a gross number like total customers, total downloads, total revenue, total subscriptions, etc.

2. Tends to always increase #

This rule is very much related to the previous one since top-line numbers are usually increasing. Having an always-increasing customer base can be an ego boost but does it mean that your product is getting better.

3. Subject to noise #

A metric is noisy if it can be easily affected by a single user. For example, counting the number of important actions might be deceiving - a single user performing many actions versus many users performing just a single action.

4. Lacks clear cause and effect #

Vanity metrics are very susceptive to random effects. Can you attribute an increase or decrease of a metric to a specific action? For example, if you saw an increase in downloads can you attribute it to a very specific improvement in your app or service?

5. Not repeatable #

If a metric lacks clear cause and effect, it also means that you cannot reliably reproduce the results related to the metric. This basically means that you have no idea why something happened which is not ideal.

6. Irrelevant (Bonus) #

If you remove the metric, it will not affect your business decisions. Why have that metric in the first place?

If a metric you are using falls into some of those categories, you should consider replacing it with a another one in line with your goals.

I will be dropping an article and a video on how to do that, so stay tuned.

References #

1. Eric Reis - The Lean Startup