What Are Vanity Metrics

Vanity metrics are numbers that make you feel good but don’t give real insights into the health of your business.

They often look impressive in pitch decks but don’t contribute to actual revenue or customer retention.

Examples of vanity metrics:

• Website traffic (if visitors aren’t converting to customers)

• Social media followers and likes

• Press coverage

• Email subscriber count (if they don’t engage or buy anything)

• App downloads (if users don’t stick around)

• Pitch competition wins (if they don’t lead to funding or growth)

These metrics create a false sense of progress. You feel like your startup is thriving, but if they don’t translate to paying customers, they’re just noise.

The Numbers That Actually Matter

Instead of vanity metrics, successful startups focus on actionable metrics—data that directly impacts growth, revenue, and sustainability.

Monthly Recurring Revenue (MRR) & Revenue Growth

Why it matters: Revenue is the lifeline of any business. If your revenue isn’t growing, your business isn’t growing.

Example: When Slack first launched, instead of obsessing over downloads, they tracked MRR to see how much actual revenue they were generating from paying teams.

Customer Retention & Churn Rate

Why it matters: Getting new customers is expensive. If people aren’t sticking around, your growth is unsustainable.

Example: Netflix’s success isn’t just about acquiring users—it’s about keeping them subscribed month after month.

Conversion Rate

Why it matters: You might have thousands of website visitors, but if none of them convert into paying customers, that traffic is meaningless.

Example: Instead of focusing on overall traffic, Amazon optimizes every step of the buying process to increase conversion rates and revenue.

Customer Acquisition Cost (CAC) vs. Customer Lifetime Value (LTV)

Why it matters: If it costs you more to acquire a customer than what they’ll spend on your business, you’re losing money.

Example: Dropbox focused on referrals because the cost of acquiring a user through word-of-mouth was much lower than paid advertising.

5. Engagement & Product Usage

Why it matters: If people sign up but don’t use your product, they won’t stick around for long.

Example: Instead of tracking just sign-ups, Airbnb looked at how many users were actively booking stays, ensuring real engagement.

How to Stop Chasing Vanity Metrics

Define Your North Star Metric

Your North Star Metric is the one number that best represents your startup’s success. For example:

• Netflix → Hours watched per subscriber

• Airbnb → Nights booked

• Shopify → Gross merchandise volume (GMV)

Find the metric that truly reflects your business’s value and focus on improving it.

Set Goals Around Actionable Metrics

Instead of saying, "We need more website visitors," set goals that drive business growth:

• "We need to increase conversion rates from 2% to 5%."

• "We need to improve customer retention from 60% to 80%."

• "We need to increase MRR by 20% in the next quarter."

Question Every Metric You Track

Ask yourself:

• Does this metric lead to revenue?

• Does it help us make better business decisions?

• If this number doubles, will our business actually be better off?

If the answer is no, it’s likely a vanity metric.

Test, Measure, and Iterate

• Run A/B tests to see what improves conversions.

• Track where your most valuable customers come from.

• Adjust your strategy based on data, not assumptions.

Action Steps: What You Can Do Today

1. Identify your North Star Metric—what number truly drives your business forward?

2. Stop tracking at least one vanity metric that isn’t helping you grow.

3. Analyze your website and product data to see where users drop off and optimize those areas.

4. Talk to customers—why did they buy? Why did they leave? Use this insight to improve.

5. Set one growth-focused goal based on real business impact, not just surface-level numbers.

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👉My Pick: The secret to writing a Business Plan