Stop Chasing These Vanity Metrics if You Want to Succeed

A schoolhouse utilizing FutureFund — my fundraising level for K-12 schoolhouse groups — precocious raised $9500 for their softball squad during a hit-a-thon campaign. That money will person a affirmative effect connected those students, but it's not nan benignant of point we'd usage to advertise nan worth of our platform.

Without context, that $9500 doesn't supply immoderate useful accusation to imaginable users. It mightiness consciousness loosely positive, but it says thing astir what they could expect from utilizing nan platform. In different words, it's a vanity metric.

Here's a amended measurement to look astatine nan data: $9500 raised by a squad of 30 students breaks down to astir $353 per student. Imagine a schoolhouse group trying to raise money for a shot squad of 50 players — aliases a nosy tally pinch hundreds of participants. That per-student metric would mean overmuch much to them than immoderate arbitrary lump sum.

Startups often make this mistake. They attraction connected numbers that don't really matter while ignoring nan ones that do.

Here's really you tin hole that.

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This is nan number 1 vanity metric startups pursuit (and why it isn't helpful)

The biggest vanity metric astir startups pursuit is their percent of growth. You spot it each nan clip — companies advertizing that they grew by immoderate unthinkable magnitude — for illustration 500% successful nan erstwhile year. But here's nan thing:

If you commencement astatine $1, spell to $5, and telephone it 500% growth, it doesn't mean anything. It's still conscionable $5. A lemonade guidelines tin turn by 500% successful a year, but that doesn't make it a successful business aliases a viable opportunity for investors.

Now, that doesn't mean nan growth percentage ne'er matters. If you're an established institution trying to turn by 20% and you turn by 22%, that could still beryllium important. But for astir startups, this is nan biggest vanity metric.

Related: Why This Metric Should Be Prioritized Over Growth for Startup Success

How to spot vanity metrics astatine a glance

Here's my norm of thumb erstwhile group inquire maine what a vanity metric is: immoderate metric you put connected your website aliases property merchandise is astir apt a vanity metric. Any metric pinch a nice, information number. Stuff pinch tons of commas. Stuff that looks good.

They're not ever useless, but you shouldn't pursuit them. They mightiness look bully connected your tract and make group comfortable doing business pinch you, and those are broadly useful for your marketing. You conscionable shouldn't displacement your business operations to make them get bigger.

Why your ngo should ever travel first

I've ne'er had a extremity to raise $140 cardinal for FutureFund. When we reached $130 million, did it consciousness good? Of course. Could that benignant of accomplishment beryllium a proxy for much revenue? Sure. But I knew it besides couldn't go our mission.

Our ngo is to enrich nan lives of students everywhere. I'd overmuch alternatively measurement really galore students person been impacted by our platform, and really galore get opportunities to acquisition things they wouldn't beryllium capable to without our platform.

Those metrics really show america really good we're succeeding astatine our mission. They're a reflection of whether we're fulfilling our purpose, not conscionable really overmuch money we're making. Being purpose-driven helps america group much eager goals and person a much meaningful effect successful nan world. It helps america deliberation large and do better.

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Vanity metrics vs. maturation levers

Then location are nan maturation levers—the numbers we usage to amended our business. These are immoderate of nan champion metrics to analyze, though they're seldom nan astir absorbing ones to talk about. They're not arsenic exciting, but they're overmuch much useful.

Growth levers are different depending connected your ngo aliases your contiguous goals. For example, if you're acquiring people, you want to look astatine Customer Acquisition Costs, churn rates, etc. Since our extremity astatine FutureFund is to thief schools, we look astatine really galore dollars are raised per student astatine each schoolhouse that useful pinch us.

That brings america backmost to nan softball team. Yes, they raised $9,500 — but that $353 per subordinate was nan metric we honed successful on. It demonstrates to different schools what they mightiness expect by moving pinch america and reflects really efficaciously group are utilizing nan platform, which tin guideline early upgrades and caller features. It isn't conscionable amended for advertising; it's a meaningful maturation lever arsenic well.

Related: This Strategic Growth Lever is Right Under Your Nose. Harness It To Multiply Your Company's Success

Growth percent is excessively comparative to mean overmuch for astir startups, and gross isn't tied to your mission, which yet keeps your customers coming back. When you put these vanity metrics speech and attraction connected maturation levers that thief you bring much worth to your market, you group yourself up for much accordant and sustainable growth.