tech

Vanity milestones

Eric Ries uses the phrase “vanity metrics” to refer to metrics that founders cite to demonstrate progress but that are actually false signals. A related concept is “vanity milestones”: achievements that are more about making you feel good than helping your company. Vanity milestones include:

- Raising money from famous people/firms who aren’t really going to help your company (e.g. Hollywood celebrities).

- Partnerships with brand name organizations that aren’t really going to help your company.

- Getting press (e.g top lists) that focuses on founders and not your company.

- Almost all tech press (unless your product targets developers or tech companies).

This doesn’t mean it’s bad to hit vanity milestones. Good companies hit lots of vanity milestones along the way, and sometimes they can be a morale boost for employees. What is worrisome is when founders equate vanity milestones with success. The attention will go away very quickly if your company fails.

Categories: tech

23 replies »

  1. Chris, great, succinct encapsulation of Reis’ Lean Startup concept. He also added the bizarre concept of vanity marketing. Startups are particularly prone to paying for $gazillions pay per click advertising, PR and old-school marketing which indeed brings in followers, visitors and sometimes even paying customers.But they fail to calculate the cost/benefit ratio of customers acquisition.

    If a company spend $10k on acquiring 10 customers and their lifetime value to the business is less than $1k each, the company is basically “buying” customers at a loss.They might as well throw burning dollar bills out the window.

    Data-driven marketing on the other hand gives business owners all the metrics they could ever need to know what marketing processes are profitable and which not. There’s gold in them there data.

  2. Your last paragraph makes the most important point. The difference is that vanity milestones probably shouldn’t be written goals. Although when they happen it doesn’t hurt to get some high fives out of it around the office.

  3. I agree. I almost didn’t write this post because I was worried it might get misunderstood as saying anyone who hits vanity milestones is making a mistake. (Hence the bolded sentence). But I have seen founders who seem to confuse these milestones with actual success, which is the issue.

  4. Gurley’s excellent article is tightly argued. But I take issue with his claim that ” If you have organic customers, they shouldn’t be included in the spend calculus. They would have arrived regardless of spend” That of course depends how they arrived. If you’ve spent thousands blogging, tweeting and generally socially-media-ing to rank and get found organically, that’s a real business cost, not to mention an opportunity cost. Thanks for the link.

  5. There are some numerical metrics that meet this threshold as well – ie, a cumulative users chart without more data on actives or actual usage; you’ve reached 100,000 users that have ever used/launched your product that’s great, but without knowing usage or engagement, its pointless – a nice upward trending chart (can’t go down because its cumulative!) with no value.

    Edit: apologies, I misread this. Clearly belongs in the vanity metrics list (we have XXX users!)

  6. I think that for early seed stage start-ups vanity metrics is all they have to show the potential of an idea. The difficult part for start-up founders is determining the point where they need to stop reporting vanity, and start reporting value.

    I am not saying it is right to do so but it is the state of the current start-up world. There are so many flashing lights, bells & whistles out there, that one must sell their soul to the devil a little bit to get some attention.

    This is coming from someone that is a huge believer in real value and transparency…but I can understand why people do it…

  7. As Jim Collins has pointed out, there is an inverse relationship between the amount of time a CEO spends promoting himself and the long term longevity of a company.

  8. I think your point does come across well unless someone with particular sensitivities reads it :) I do think that Tech coverage by a respected reporter is a good morale booster but you need to measure the after effects (i.e did it improve your conversion rate, traffic to website, or whatever is your most important metric).

  9. I like the phrase “vanity achievements” over vanity milestones as it speaks more to an unlocked false goal than the passage of time.

    Everything in your list and the added ones in the comments are optical rather than substantive in nature. The funny thing is how vanity achievements/milestones when quantified/aggregated become another vanity metric – number of press mentions, number of retweets/reblogs of our latest hollow feature set, number of Google Alerts that Kim Kardashian mentioned our product, etc.

    When vanity feeds itself and becomes circular, narcissism has overtaken management.

  10. Getting press about the founders is not a vanity metric at all, it helps with all press and gets the right people. I can see the reason to add founder awards during the start-up stage.

  11. With perhaps one exception – thought leadership. For certain classes of products (B2B at least), promoting the CEO as an expert on the problem the product is solving is an excellent marketing technique that leads to sales. For example, getting your CEO to present a keynote speech at conference filled with potential customers will often be worth the time it detracts from otherwise building the business.

  12. Biggest vanity milestone…..”We just raised $__ Million” which is sort of like saying “We just filled up the tank at the gas station” when asked how your cross-country trip is going. Funding is not a real milestone to building a company. Important, yes. But not a real indication of any real progress in building a great product or attracting/retaining customers/users.

  13. I agree Chris, but imho these ones aren’t the only vanity milestones. There are new product features (not important for the product), and the use by celebrities (occasional use or just test).

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