Seriously, Your Metrics Already Predict Failure

Your metrics are more expensive than you realize. Your team spends time analyzing them. When they move unexpectedly, the team spends time understanding why. The design and product teams make decisions every day based on the metrics discussed at the company level. You have limited time with your investors, and that time is wasted discussing metrics which are not fundamental.If you had to simplify your company’s operational model to a few variables, or even two variables, what would they be?

Is there a big drop off between downloads and paying transactions? That is a sign you are focusing on the wrong level of the business. Do MAUs (monthly active users) actually drive your revenue? If not, they are a vanity metric. Is GMV distorting your traction? If you do not monetize all of that GMV, you have not really measured customer adoption. Customers love getting a service below cost. In my experience with startups, price is almost always the biggest determinant of elasticity – outweighing speed, experience, and service quality.

If you have refined your model and are tracking the right metrics, every movement in a key metric should result in a directly proportionate change in business value.

Vanity vs Key Metrics

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