Andreessen and Mixpanel Call for an End to “Bullshit Metrics”

The truth is that there is no one single metric that rules them all. You have to look at a suite of metrics to fully understand how users are using your product. It might be nice for YouTube to measure numbers of views a video has, but what if the majority of those views come from the same person? What if that person doesn't come back to YouTube? It might also be tempting to just measure the retention of users. But that doesn't give you the whole picture either. Is a user who comes in on Day 1 and drops $99 but never comes back again worse than a user who uses your app everyday but never pays?<p>For real businesses (read: those with actual business plans) the closest single metric of importance is Customer Lifetime Value. And the equation is very simple. Make your cost of customer acquisition less than your LTV and you will be making money.

I think theres a difference between advertising or celebrating "bullshit" metrics and actually using them.<p>For our most recent press releases, we reported many of these "bullshit" metrics because thats what gets acclaim and attracts attention to help the company gain the necessary notoriety to thrive. Internally, we still use real, actionable metrics to drive our development. We just don't report them to outsiders because its either sensitive information and likely uninteresting outside of the context modeling or users experience.

A little ironic coming from the firm that invested in Groupon, inventor of the "Adjusted consolidated segment operating income".

The first most important metric: When it goes up and to the right, it means your company doesn't die.<p>Death can be alluded in many different ways, depending on the nature of your business, but it usually means making money, hitting a milestone that allows you to raise money, acquiring users, and so forth.<p>Once your company evolves, and has beaten death for the foreseeable future, a new set of metrics come into play and are now the most important. These may be similar to the death-evading set above, or they may be something new like increasing revenue, retaining users, increasing engagement, optimizing CLV, and so forth.<p>The point? If a metric means your company is not dying, or your company is growing, it matters. If it doesn't fit into those buckets? Probably doesn't matter.

Good thing they don't use any BS metrics on their about page.<p><a href="https://mixpanel.com/about/" rel="nofollow">https://mixpanel.com/about/</a>

This will not happen. Individuals and corporations use these because they make them look better.<p>Should companies selling, say, food products be mandated to show pictures of the actual delivered product on advertisements, menus and packaging? That's not going to happen without additional legislation.<p>Should resumes of individuals highlight workplace weaknesses, medical conditions, personality faults, past failures, major conflicts, etc.?<p>The web is no different. Unless individuals and corporations are persuaded to do otherwise, they will continue to use metrics as they please.

I really love Mixpanel, it is the "best in breed" when it comes to event analytics. I don't think many people would argue with that, it's awesome. In fact, we use it at Zapier for pretty much everything (basic funnels, A/B testing, retention, engagement, etc...) and we haven't even reached our full potential with it yet. But I still have some pretty fundamental beefs with the state of analytics software in general.<p>About the article, the problem stems from the fact that proper analytics is hard and is (arguably) getting harder with more advanced packages.Shouldn't it be going in the opposite direction?<p>It is a lot easier to track discrete downloads or pageviews than some other, more insightful metric, so people will naturally gravitate to the cheaper metrics. Until this is reversed, bullshit metrics will reign.<p>Anyways, my beefs:<p><i>First</i>: how do you decide what data to send into the package?<p>The more data you send, the better (sure), but at a certain point you are just duplicating your internal datastore, so that is too much, right? But not enough and you'll miss a chance to understand a phenomena that you didn't predict seeing (isn't that the point?). After you decide, then you write a crapton of code to send it all (what about backfilling data when you want to track something new?).<p><i>Second</i>: once you are collecting the data, how do you know what metrics to actively track?<p>This is definitely existential, but it's back to the core problem: doing analytics properly is <i>hard</i>. Why couldn't the software let me define some properties about the <i>type</i> of app I am running and suggest some strategies (you have a subscription SaaS app? Try tracking paid plan retention, signup funnels, etc...). Maybe it could go even further with <i>reverse</i> funnels, as in: what events are the most important and work backwards. I could see some automation and discovery possibilities there.<p><i>Third</i>: do I really have to dig around trying to find something useful?<p>All the data is there, the software should <i>tell</i> me what is useful or interesting. It's definitely a hard problem, but I would throw money at software that could send me this email: "<i>Looks like users who experienced event "ABC" also performed your highest priority event "Signup" at a 13% higher rate. This observation is 99% confident.</i>" Of course, you'd need to investigate a littler deeper to see if that isn't just a fluke or something stupidly obvious (like: people who view a page signup at a higher rate than those who don't), but at least I might learn something.<p>I know this is certainly a pipe dream as of today, but I vow to shower someone with money if they can do this.<p>In my opinion, the next generation of analytics software won't just have more bells and whistles, it will fundamentally shorten the time to some sort of real "AHA!" insight.

People will always be measuring everything by the numbers. Look at your number of Facebook friends, your LinkedIn connections, your GPA in college, your annual income. It's always a rational argument to say that bigger is better. In a world where metrics are quantified like this, this is the natural way of thinking. It's going to be difficult to seep through the bullshit metrics, especially when you're such a small startup with other numbers that are too embarrassing to display to the world -- but, really, when you think about it this is the only way to find and fix the problems that you have.

I would have liked the article to pony up what the companies own 'non BS' metrics are. Seemed a little flat to 'call BS' on everyone else then not deliver the goods itself.

Actually, I find that a lot of the metrics mentioned like uniques and pageviews are the ones that affect revenue for ad-driven startups. That's as real as it gets with metrics.<p>When it comes to ad-driven startups, you could actually say that the "real" metrics suggested, like active users and engagement, are the actual bullshit metrics. For many ad companies like Google(search) or YouTube, high engagement by the users adds nothing to the bottom line.

So they call to replace one bullshit metrics with other bullshit metrics. Nice.<p>Not once in this article there were the words "Profit" or "Revenue" and yet they talk about business and companies.<p>Here is a surprise for you. Real companies are interested in real profits from real revenue and you count revenue and profit only after the money is actually in your bank account.<p>Otherwise one day you get the kind of terms of service just like Instragram these days.

Analytics only matter if they help you make better decisions. Anything else, is, indeed, just vanity.

This article inspired me to create a twitter handle to highlight the best(?) examples of this: <a href="http://twitter.com/bullshitmetrics" rel="nofollow">http://twitter.com/bullshitmetrics</a><p>Anything recent come to mind?

An example in the article, number of pictures uploaded on Instagram, it is not clear that this is a good metric, at least until they work out a way for each additional image to bring in more revenue.

This seems to be focused on web app start ups. What the most important metrics to track for eCommerce?

Gaming companies have been doing this already for years.

The need for new metrics! Written about extensively here months ago:<p><a href="http://subprint.com/blog/the-need-for-new-metrics" rel="nofollow">http://subprint.com/blog/the-need-for-new-metrics</a>

Everything except bottom line profitability is a bullshit metric.