Vanity Metrics and Real Beauty

What are vanity metrics?

Sasha Dichter asks “What business are you in?” and explains the whole thing very well:

One of my favorite concepts from the Eric Ries’ Lean Startup is the notion of vanity metrics.  These are numbers that startups parade around to impress their customers, their  venture investors, or (worst) themselves.  They are numbers that tell you almost nothing about whether the business is actually succeeding.  User growth or topline revenue numbers are great candidates for vanity metrics – as opposed to metrics like utilization rate of your fixed assets; total sales generated by your median salesperson versus a breakeven number; or number of months to cashflow positive for each new site that you open.

If you’re in the spreading ideas business then what you want to measure is how far, well, quickly, and to whom your ideas are spreading.

Here’s Eric Reis of Lean Startup fame explaining the concept:

Vanity metrics are those metrics that don’t really mean anything to the daily operations of the organization.  They are hollow. They don’t help us make decisions.  They are sometimes used as a smokescreen to the real issues and a barrier to real progress.  They are embraced with they support the story we want to tell.  When we can’t make them fit the story, we reject them or ignore them.

It’s not a problem of numbers

It’s a problem of human nature.  We want to see improvement.  We sometimes force a pattern.  We project our bias.  We see what we want to see.  The numbers really don’t matter.  If the facts don’t agree or support our claims, just make new facts or bend the facts.  In the past, facts were more stubborn.

And the problem is…us

When we start to believe our vanity metrics, we lose focus on the things that really matter.  Like a narcissist mesmerized by the mirror.  There’s a crazy feedback loop that happens and it’s hard to put that mirror down.   It seems that, it’s okay to lie to others.  But when start lying to ourselves, it’s hard to speak the truth. And that’s when the problems start.

It’s reminds me of a quote and image of the “naked truth”:

“Wahrheit ist Feuer und Wahrheit reden heißt leuchten und brennen”
English translation: “Truth is fire, and to speak the truth means to shine and to burn”

What is the ‘naked truth’? Don’t accept because your numbers are ‘up and to the left’ that your project is going along swimmingly.  What exactly is causing those numbers?   Take a hard look in the mirror. Look beyond the vanity metrics and dig deeper to find the actionable metrics. My man W. Edwards Deming and his Lean manufacturing buddies would say:   ‘Genchi Genbutsu’ which, roughly translated means ‘Go and see for yourself’

Here’s the hard part.

Sometimes you can’t believe what you see.  Not trusting your perspective is a hard way to live and I don’t recommend it.  A healthy dose of doubt and critical thinking  is your friend. With practice, you will learn to recognize the signs that you need to dig deeper and ask yourself hard questions and ask different questions than the standard.

One good starting questions  are “What business am I in?”  Is it looking beautiful or being beautiful?  Is it looking successful or being successful?  How do you define success?

Esse quam videri

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