Focusing on the Right Metrics: Avoid Vanity and Embrace Pirate Metrics

Metrics drive product decisions. But not all numbers are equal. You could waste hours on vanity metrics—page views, installs, likes—that look good on paper but don't move the needle. This guide shows you how to focus on meaningful data and use frameworks like Pirate Metrics to drive real change.

Introduction

When measuring a product's progress, the wrong metrics can derail your focus. Instead of obsessing over high numbers that look impressive but mean little, concentrate on the metrics that truly matter. In this guide, you’ll learn how to:

• Differentiated between vanity metrics and meaningful metrics
• Identify comparative metrics that drive change
• Set up conversion funnels using tools like Amplitude
• Leverage frameworks like Pirate Metrics to track key actions

Estimated read time: 5 minutes

1. The Pitfall of Vanity Metrics

Vanity metrics are numbers that look good but do not provide actionable insights. Examples include:

• Page views
• Number of installs
• Followers, likes, or friends on social media
• Time on site without context
• Number of downloads or email signups

These metrics do not tell you if users are engaging with your core product. They are easy to measure but rarely drive real decisions.

Tip: Focus on the metrics that reflect user behavior and product performance rather than just surface-level numbers.

2. A Better Approach: Meaningful, Comparative Metrics

After years of experience and working with experts at Maneth Consulting Group (who worked with companies like DoorDash and Shift), I've learned that good metrics are comparative and drive change.

At the highest level, you should have a North Star metric—the single most important measure of success at either the organization or product team level. For example:

• For a food delivery service, the North Star metric might be number of orders.
• For a gig booking platform like Rapture, it could be number of gigs completed.

These metrics set the course for team efforts and ensure everyone focuses on what truly matters.

3. Conversion Funnels and Amplitude

The real power of analytics is in understanding conversion. A conversion occurs when a user completes an action that matters to your business. This might be a purchase, a signup, or a booking.

For instance, a conversion funnel for a booking platform can look like this:

1. User opens the app
2. User reviews the customer homepage
3. User checks the entertainer's profile
4. User taps the call-to-action by booking a gig
5. User confirms the gig
6. User reviews the booked gig

Tools like Amplitude help you set up these funnels. With event tagging across iOS, Android, the web, and servers, you can track every step a user takes and identify where they drop off.

Pro Tip: Regularly review your conversion funnels. Even small changes can shift user behavior and lead to exponential wins.

4. Additional Key Benchmarks

Beyond conversions, there are several other benchmarks to consider:

• Session Duration: How long users spend in your app or on your site.
• Daily/Monthly Active Users: The number of users engaging with your product each day or month.
• Traffic: The overall number of visitors to your digital platforms.
• Retention Rate: Are first-time users coming back?
• Frequency: How often are users returning?
• Churn Rate: What percentage of users is leaving?
• Net Promoter Score (NPS): How likely are users to recommend your product?

These metrics offer a complete view of your product's performance, allowing you to pinpoint strengths and areas needing improvement.

5. Embracing the Pirate Metrics Framework

My favorite metric framework is known as Pirate Metrics. It breaks down product performance into key areas represented by the acronym AARRR:

• Acquisition: How are users finding your product?
• Activation: How do users experience your product for the first time?
• Retention: Do users come back?
• Referral: Are users sharing your product with others?
• Revenue: How does your product make money?

Using this framework, you can easily see where to direct your focus. Each stage is designed to drive change, making your product better and ensuring sustainable growth.

Book Recommendation: Lean Analytics

For those wanting more in-depth guidance, I highly recommend the book Lean Analytics: Use Data to Build a Better Startup Faster. This book explains what metrics to track and, importantly, which ones to ignore.

It has guided my learning over the past seven years and has become a go-to resource for understanding the nuances of product analytics.

Conclusion

In product management, the right metrics can make all the difference. Rather than getting sidetracked by vanity metrics, focus on what drives change. Remember:

• Identify and track comparative metrics that reflect real progress.
• Set a clear North Star metric to guide your team.
• Leverage conversion funnels with tools like Amplitude to get actionable insights.
• Use frameworks like Pirate Metrics to track acquisition, activation, retention, referral, and revenue.

With a clear focus on meaningful metrics, you can make better product decisions that lead to exponential wins. Start tracking what matters, cut through the noise of vanity metrics, and let data drive your success.

If you found this guide useful, consider checking out more resources on our channel and continue your journey toward smarter product management.