At some point in history, metrics mattered. Rather than slide-filler and misdirection, they were designed to be legitimate barometers and predictors of success.
“How many units did we sell?”
“What was our operating margin?”
“On a scale of 1 to 10, how pregnant is she?”
(For the record, the best possible answer to that question is four. Think about it…)
Then software got big. It eventually got so big that people started giving the stuff away for free. Despite target company cash flows being weaker than a Heather Mills field goal attempt, restless investors and slobbering marketers both got boners over the prospect of unlimited “eyeballs”. All of a sudden, to facilitate Hail Mary investments and job-justifying budgets, we needed new numbers.
What passed as “KPIs” quickly became the metrics with the highest odds of flattery. Their linkage to pure commercial success faded like a haircut in a Spike Lee Joint and we were left with Field of Dreams dictums echoing off the lofty walls of startup shacks: “Get the users and the money will come”.
I started feeling like I was being pitched air-miles credit cards at a basketball game: “You get FIVE whole points for every dollar you spend!! That’s twice as many points as the competitors!!” And then it’s 80,000 points for a fucking salad spinner and 40 billion points for a rickshaw to Baltimore.
What happened to brass tacks?
Would a restaurant gauge its future on the number of people who peruse its menu or the number of people who in fact order from that menu the most high-margin items? Is a teacher’s ultimate effectiveness graded by hours spent in class or answers scribbled on tests? At the end of a night, would a stripper calculate their success with an applause-o-meter or the 50s they find nuzzled under their thong?
At the very least I expect us to agree on the last one.
I’m done with Pageviews and Clickthroughs, and MAUs, and Logins Per Day, and Users That May Potentially Watch CNN Even Though They Downloaded this App to Send Dick Pics, and all the other new-age numerical noise that sounds nothing like the chuk-cha-ping! of an old heavy cash register getting ready to gobble your milkshake money.
Stuff like CAC, Retention Rates, and Viral Coefficients is fine, but we can do better.
Here are some new software metrics I made up. If these could somehow be implemented, I might start paying attention to numbers again.
Users Not Broke As Fuck (BAF Quotient)
You can think of this is the percentage of your user base that doesn’t buy celery at Walmart or “save up” for toothpaste. I’m sure these are lovely people and I wish them nothing but the best. But if we’re talking about product users – the people who are potentially going to fund your life – you need to know how many of them try to use checks in vending machines.
If too many of your users are BAF, a lot of dollars – your dollars, investor dollars and advertiser dollars – are going to be wasted trying to squeeze into their spending habits that look more like my Bubbie than they do a baller. Eyes are worth money if they belong to someone with access to the stuff.
High-Frequency Purchasers of Unnecessary Shit (Regularity of PUS)
The ideal user doesn’t just have money; the ideal user regularly spends money on trivial, inane bullshit, like personalized key hangers, throw-pillows and weddings. At some point, if you’re going to be successful, you’ll need to make money pitching something less-than-life-threatening. The more financial frivolity in your user base, the better. For more context on this metric, see: Etsy.
Odds of Getting Users Laid (The OGL)
#1 rule of business: sex sells. You think Facebook got to where it is because people really like photos? No, it’s because they really like genitals. Facebook has one of the highest OGL rankings of all time, trailing only a few juggernauts like Grindr and Rosetta Stone: British Accent Edition.
I’m going to estimate that 88% of all financial expenditures made on the planet – both B2B and B2C – can be traced back to someone trying to get laid. The remaining 12% is split between spoiling children, weird distractions from misery like gardening and heroin, and the occasional anonymous charity donation. As the famous Valley adage goes: “Help your users do the deed, you’ll never struggle finding seed.”
Face-Punch Segment Size (FPS Score)
This is the percentage of users that would try to punch me in the face if I took your product away from them. A lot of software companies like to use NPS, which indicates a client’s likelihood of referral. I prefer to use FPS, which indicates a client’s likelihood of cherrying my schnoz if I mess with their shit. Referrals are nice, but the ultimate gesture of value and attachment to your product or service is the propensity to employ physical violence when threatened with its repeal. And I’ll admit, my favorite thing about this metric is observing the data collection.
Apps They’ve Ever Given a Penny (GAP Analysis)
This is a score that represents the weighted product of two metrics: the percentage of users that have ever given more than zero fucking dollars to an app or website (excluding eCommerce) and the average number of different apps or websites to which they have given that money. If your GAP is about the size of the space between Oprah’s thighs, you’re in trouble.
This reminds me of all those girls in high school and college who thought they could tame the self-absorbed bad-boy with the wandering pecker. It was never gonna happen. If there is zero evidence of rewarding behavior before you came on the scene, don’t expect them to start digging deep just ‘cause you’re a little bit cuter. Sometimes, with enough self-deprecation and unrequited affection you can wear them down over time. But that’s a dangerous, costly strategy. Always mind the GAP.
Probability of Missing the Point (Profit Analysis)
Remember that shit? Profit? It’s actual money that’s left over after you burn through development, manufacturing, inflated salaries, social media strategies, hip office space and a closet full of Vans to match your “dressy pants”. I will always find it astonishing to hear how much money people make off of companies that don’t make money. This past July a Forbes headline read, “Amazon Surprises With Profit In the Second Quarter, Stock Shoots Up.” Amazon is 21 years old. Jeff Bezos is worth about $50 billion. Square just filed for IPO. In 2014, they were $154 million in the red. So far this year, $77.5 million. Apparently their private market valuation is $6 billion.
But hey, who doesn’t love a warm bubble-bath, right???
I’m not saying I don’t get the model. I do. I’m not even saying I don’t approve of it. For the most part, I do. I’m just a bit old school when it comes to my numbers. If you really want to tickle my plums, show me the odds that after a few years, you won’t be missing the point. Assure me that at some stage in the near future, you plan on making more money than you spend.
Ah, whatever. Or don’t. I’d still probably trade in my grandmother for a piece of that Square IPO.
Ben is a Toronto-based writer and public speaker with more than a soft spot for 90s hip hop. He has spent over 10 years in business & tech, more than 20 in the arts, and an entire lifetime in a state of perpetual judgment (highly recommended). He is the author of the blogs This Is Your Brain on Dating and Love Gone Cray and can be found pontificating on Thought Catalog, Notable.ca, The Toronto Standard, Offline Magazine, Gasm.org and Huffington Post.
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Brilliantly funny, and even useful… if you could survive gathering the data.
I got lost really quickly. What was to gain from this article?
I don’t know much about the tech world but I found this article rather interesting and rather funny.
I always like the tone of this site. Technology is a changing world and when you see software like this, you know exactly where that world is heading.
Two excellent qualities in an article; Glad you liked it 🙂