NOTE TO READER
One of the critical challenges for social entrepreneurs is establishing metrics, aka key performance indicators (KPIs) to manage your social enterprise, track goals and demonstrate success to key stakeholders.
A common failing is establishing vanity metrics that look good on the surface but provide information of little or no value.
This article covers several valuable points on this topic.
TIP: Suggest reviewing Module 8 of the Practitioner Guide for further information on metrics.
Article Excerpts
“Why Vanity Metrics Are So Seductive
We all love a good vanity metric. They’re like that friend who always tells you how great you look, even when you’re sporting yesterday’s pizza stains on your oversized t-shirt.
So, why are we so drawn to these ultimately useless numbers?
They’re easy to measure and understand: Vanity metrics are the low-hanging fruit of the data world. They’re simple to track, easy to explain, and often show impressive growth. It’s much easier to brag about your million users than to explain the intricacies of your customer acquisition funnel.
They make us feel good about ourselves: We all like to feel successful. Vanity metrics stroke our egos and give us a sense of accomplishment. It’s like getting a thousand likes on your Instagram post — it feels great, but does it really mean anything?
They’re great for impressing the uninformed: Vanity metrics are perfect for dazzling people who don’t know better. That angel investor who’s new to SaaS? They might be blown away by your massive email list. Your new marketing intern? They’ll be starry-eyed over your website traffic numbers. But seasoned pros know better. (You want to be a seasoned pro, right?)
The Dangers of Chasing Vanity Metrics
1. Misaligned priorities
When you’re chasing the wrong numbers, you’re basically voluntarily wearing blinders:
If you’re not focused on as-yet unresolved user pain points, you won’t address their problems, and they’ll look for someone else’s product that’ll at least try.
You’ll poorly allocate valuable resources — you know, classics like “time” and “money” — and instead divert them to activities that don’t (actually) drive value.
You’ll miss opportunities since you won’t discover ways to improve a metric you’re not tracking in the first place.
2. False sense of security
Vanity metrics are master illusionists. They’ll have you thinking everything’s peachy while Rome burns around you:
You might feel like your business is thriving, but it’s all surface-level success — the numbers you’re looking at won’t be telling the whole story.
You won’t be able to see the red flags if you’re wearing rose-colored glasses.
If you see nothing wrong, you’ll be complacent, and won’t make any effort to fix what “isn’t” broken.
3. Ignoring critical business issues
While you’re busy high-fiving over that new feature you launched:
Your burn rate is hotter than a supernova.
Your paying customers are screaming into the black hole you call your support queue.
Your product-market fit is drifting further off course than a probe with broken thrusters.
…and plenty more space-related metaphors!
4. Demotivating your team
When your team is pushed to focus on vanity metrics, they lose sight of what really matters. It’s demoralizing to hit arbitrary targets that don’t contribute to real business success. You know why? Because:
They know it’s BS, and they’ll resent you for it.
Real talent wants to solve real problems, not juice artificial numbers.
You’ll cultivate a culture of shortcuts and hacks instead of genuine innovation.
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