Founders primarily track their business' vital signs using numbers, also known as metrics.

While it's important to have metrics by which you can gauge progress, those metrics must only be a way of measuring progress towards a real outcome and not become a goal in themselves.

To take a simple example, many founders focus on revenue as an indicator of success. After all the more people pay indicates that they like the product, right?

It could be but it fails to recognise an even more important metric: profit. In other words, the sustainability of the business.

If one focuses on revenue as a goal then it makes sense to boost it. This could be ads, sponsorships, or deals. Meanwhile profit growth may be flat and retention rates could be decreasing.

Even worse, these revenue generation techniques don't show real sustainable demand.
Instead, the goals should be increasing profit and retention rates per customer. Then revenue becomes a measure of market growth, as it should be.

When the business is framed in this way, it no longer makes sense to do things like overspend on ads. Rather, activities would look at increasing value to the customer to increase retention rates and referrals, which incidentally are other important metrics to track but are not targets in themselves.

I recently discovered that this concept is known as Goodhart's Law.

Its intention is to help management create meaningful measurements for their staff, it also applies to product-level metrics.

Consider how you're tracking the success of your product, and make sure that your measures are indicators of progress towards a meaningful goal, and not the goal itself.

Image: Jono Hey, Sketchplanations​
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(I was made aware of the above comic by Wes Wheless - check out his excellent mailing list about monetizing your corporate expertise over at https://thelightbulb.developmyip.com/)