Bursts of Color - In Search of a God Metric

I was fascinated by this recent FT article on Anders Tegnell and the Swedish Covid Experiment. Regardless of how we each feel about varying virus responses around the world, hopefully we can agree that it’s a complex, multi-variate equation in which no one metric tells the story. In the simplest example: where we increase testing, reported case counts go up, but case fatality rates go down.

The Swedish article reminded me of an Ev Williams post from a few years back that discourages measuring a business based on any singular “God metric,” since there are so often trade-offs right below the surface. Want fast customer growth? Just drop pricing and increase CAC (which makes each customer less valuable). Want each customer to engage more often? Just start texting them every day (which may reduce customer count over time).

For those of us who like numbers, the complexity noted above can quickly lead down a rabbit hole of trying to track and influence dozens of different metrics. At eBay we called this the obsession of trying to understand our own business. It’s also often called analysis paralysis. Common symptoms to watch out for include:

So if you’re not supposed to prioritize one number, but also shouldn’t track dozens, what’s a founder supposed to do? IMO, the natural compromise for most start-ups is to pick 3-5 key metrics and focus on driving those the best you can. Preferably each group and person feels accountable for one of these metrics. Revisit the chosen metrics at least annually – quarterly for younger companies – to add new ones and remove those that no longer seem relevant.