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January 21, 2012

PR tip: My policy on vanity metrics

Filed under: Uncategorized — Rakesh Agrawal @ 1:41 am

As you may have seen in my VentureBeat post, I’m not a fan of vanity metrics.

They are dishonest to consumers and the media. And they’re bad for startups because they shift focus to the next milestone to announce and creative accounting instead of focusing on the product and delivering what consumers want. (Which should lead to the real numbers that matter, an engaged audience and revenue.)

I will not publish vanity metrics, except as necessary to mock them and to help educate people about deceptive statistics.

If you give me a giant percentage increase without giving me a base, I won’t publish it.

If you give me a number, I will probably ask you six different questions about how it was calculated. If it’s based on a survey, I will ask about sample size and methodology. I will ask to see the exact wording of the questions you used.

If you tell me that you sold 45,000 room nights, I will look up Priceline and point out that they sold 40.6 million.

Figuring out the right metrics to use can be very hard because every business is different and there is so much innovation going on. In general, the numbers that I consider completely useless are registered users, hits and email addresses. The best comparable metrics right now are monthly active uniques. (Though for companies like foursquare, I consider weekly active uniques the best gauge.)

Money is also good. If you have revenue coming in, that’s a great metric. But less so if you’re losing money on each transaction.

I’m a hard ass when it comes to numbers and statistics.

But the bright side is that if I do quote your numbers and explain them, readers should be able to trust them.

Note: This statement applies only to work with my byline. I do not speak on behalf of other media outlets.

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1 Comment »

  1. It’s all about using metrics in context. Another pet peeve of mine is using an average when median is clearly superior.

    Comment by Michael Whitaker — January 21, 2012 @ 4:16 pm


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