There is a cycle that plagues a lot of companies. It typically works like this:
1. A startup wants some press, so they look for some bloated number to give the writer (downloads, registrations, visits, etc).
2. The startup then celebrates that press article, internally supporting the message that the bloated metric is worth pursuing.
3. In order to get additional press hits, the startup needs to increase that bloated number, so they focus on increasing it (back to Step 1).
This cycle might seem harmless. After all, isn’t getting press a good thing? But what you celebrate (externally or internally) is what your team will think about and focus on. It is giving up the long term, for short term gains. Just don’t do it.
Why do most companies push out inauthentic growth metrics?
— Inauthentic growth metrics almost always sound more impressive (especially at the earliest stages when startups are the most desperate to get press).
— Authentic growth metrics are much harder to improve than inauthentic ones.
— A lot of writers in the tech space either don’t know better and/or are writing for page views and attention grabbing headlines and are incentivized to use inauthentic numbers.
(1) We just made this mistake. We published an article last week celebrating the fact that Seeking Alpha had hit 4 million registered users. Registered users is a vanity metric, because registration numbers on their own tell you nothing about the quality or engagement level of the people who are registering. So why did we do it? Because, as Brian wrote, we knew that many people would be impressed. And we believed that while registered users is insufficient on its own and is therefore a flawed metric, in our case we knew that the quality and engagement level of those registered users was high.
(2) But a flawed metric is still a vanity metric. So we fixed the mistake. We rewrote the article and included a chart of our real metric. This is what we ended up with.