I remember the early days of RemoteTeam. We were obsessed with our numbers. Every morning, the first thing I’d do is check our user sign-ups. I’d see that number tick up, and I’d feel a rush. We were growing! We were on our way to building a unicorn. Or so I thought.
It took me a while to realize that I was addicted to a drug, and that drug was vanity metrics. These are the numbers that look great on a pitch deck, but they don't actually tell you anything about the health of your business. They’re like a sugar high – they feel good for a moment, but they’ll eventually lead to a crash.
I’ve seen it happen time and time again. Founders get so caught up in chasing these feel-good numbers that they lose sight of what really matters: building a sustainable business that solves a real problem for customers. They pour money into marketing campaigns to boost their user numbers, but they don't have a clue if those users are actually engaged or if they're just creating a leaky bucket.
Look, I get it. It's tempting to focus on the metrics that make you look good. But if you want to build a business that lasts, you need to be honest with yourself. You need to be willing to look at the ugly numbers, the ones that tell you where you're falling short. Because those are the numbers that will help you grow.
So, what are these vanity metrics that you need to ignore? Here are the three biggest offenders that I see founders getting trapped by:
1. Total User Sign-ups
This is the classic vanity metric. It's the one that everyone loves to brag about. "We have 100,000 users!" sounds impressive, right? But what does that number actually mean? How many of those users are actively using your product? How many of them are paying customers? How many of them signed up and then never came back?
I learned this the hard way at MovieLaLa. We had a huge number of sign-ups, but our engagement was terrible. People would download the app, use it once, and then forget about it. We were so focused on getting new users that we weren't paying attention to keeping the ones we had. It was a classic leaky bucket problem, and it almost killed us.
Instead of focusing on total user sign-ups, you need to be looking at active users. This is a much more meaningful metric because it tells you how many people are actually getting value from your product. There are different ways to define an active user, but it's typically someone who has logged in or performed a key action within a certain time frame (e.g., daily, weekly, or monthly).
When you focus on active users, you start to ask different questions. Instead of "How can we get more sign-ups?" you start asking "How can we get more users to become active?" and "What can we do to keep our active users engaged?" These are the questions that will lead you to build a better product and a stronger business.
2. Page Views
Page views are another metric that can be easily manipulated. You can run a bunch of ads, get a ton of traffic to your website, and watch your page views go through the roof. But if those visitors are just bouncing right off your site, then what's the point? You're just paying for traffic that isn't converting.
I once advised a startup that was obsessed with page views. They were spending a fortune on Google Ads to drive traffic to their blog. Their page views were impressive, but their bounce rate was over 90%. They were basically just throwing money away. I told them to stop focusing on page views and start focusing on time on page and bounce rate.
Time on page tells you how long people are actually spending on your site. If they're spending a good amount of time on your pages, it's a sign that they're engaged with your content. Bounce rate tells you what percentage of visitors leave your site after viewing only one page. A high bounce rate is a sign that your content isn't relevant or engaging to your visitors.
When you focus on these metrics, you start to think about how you can create more valuable content that will keep people on your site longer. You start to think about how you can improve your user experience to make it easier for people to find what they're looking for. These are the things that will actually lead to more conversions and a healthier business.
3. Social Media Followers
Having a lot of social media followers can be great for your ego, but it doesn't necessarily mean that you have a strong brand or a thriving business. You can easily buy followers, or you can get a bunch of followers who aren't actually interested in your product.
I've seen so many startups that have a huge social media following but are struggling to get any traction. They're so focused on growing their follower count that they're not actually engaging with their audience or building a community around their brand. They're just broadcasting their message to a bunch of people who aren't listening.
Instead of focusing on social media followers, you need to be looking at engagement rate. This is a measure of how many of your followers are actually interacting with your content (e.g., liking, commenting, sharing). A high engagement rate is a sign that you're building a real community around your brand.
When you focus on engagement rate, you start to think about how you can create more interesting and interactive content. You start to think about how you can have real conversations with your followers and build relationships with them. These are the things that will turn your followers into loyal customers and advocates for your brand.
The Bottom Line
Vanity metrics are a trap. They can make you feel good in the short term, but they'll ultimately lead you down the wrong path. If you want to build a successful SaaS business, you need to be honest with yourself and focus on the metrics that really matter.
So, take a hard look at your numbers. Are you tracking the right things? Or are you just chasing vanity metrics? It's a tough question to ask, but it's one that you need to answer if you want to build a business that lasts.
And if you're not sure where to start, I recommend checking out my post on the only 5 SaaS metrics that matter. It's a good starting point for figuring out what you should be tracking.
I also wrote a book called Becoming Top 1% that goes into more detail on this topic. It's a collection of my thoughts and experiences on what it takes to build a successful business. I hope you'll check it out.
Now go out there and build something great. And for God's sake, stop chasing vanity metrics.
Frequently Asked Questions
What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.
How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.
Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.