In a world flooded with dashboards, graphs and growth charts, not all metrics are created equal. Founders, marketers and investors are often drawn to shiny numbers that look good in pitch decks but tell very little about long-term sustainability. These are called vanity metrics, figures that inflate the ego but not the bottom line.
At the centre of any serious conversation about business growth lies a critical question: Are we chasing numbers that impress or those that actually drive value?
What are Vanity Metrics?
Vanity metrics are performance indicators that may look impressive on the surface but lack substance when it comes to guiding strategic decisions. Think follower counts, app downloads, page views or total impressions. They make for strong headlines but often mask underlying weaknesses in product-market fit, retention or profitability.
Take monthly active users (MAUs), for example. A social app might boast 10 million MAUs, but if only a fraction of those users are engaged or converting into paying customers, the figure loses strategic relevance. A spike in website traffic means little if bounce rates remain high and customers fail to convert.
Revenue is Still King
Unlike vanity metrics, revenue is a hard, indisputable signal of product value. It shows that users are not just engaging with your business, they’re paying for what you offer. Recurring revenue, in particular, reveals loyalty and long-term interest. For early-stage startups, it is one of the clearest indicators of traction.
Investors understand this well. In boardrooms and funding pitches, revenue beats downloads, likes or shares. It demonstrates customer demand, validates pricing models and reveals operational efficiency. More importantly, it holds a mirror up to how scalable the business really is.
The Metrics That Matter
- Customer Acquisition Cost (CAC)
This measures how much you’re spending to acquire each customer. If CAC is rising while revenue stagnates, you’re burning through capital with poor returns.
Customer Lifetime Value (CLV)
CLV shows how much revenue a business can expect from a customer over their entire relationship. It becomes even more powerful when paired with CAC. If CLV far outweighs CAC, you’re in a healthy position.
Retention Rate and Churn
Keeping existing customers is cheaper than acquiring new ones. High churn often points to product dissatisfaction or a weak value proposition.
Gross Margins
A business might be growing top-line revenue, but if the margins are thin, it’s only a matter of time before capital runs dry. Gross margin highlights operational sustainability.
Net Revenue Retention (NRR)
Especially relevant for subscription-based or SaaS models, NRR accounts for upgrades, downgrades and churn. If your NRR is over 100 per cent, you’re growing from your existing base without even acquiring new customers.
Cash Flow
Growth becomes meaningless if you’re constantly fighting to stay liquid. Healthy businesses maintain positive cash flow as they scale.
Why Founders Fall for Vanity
In the early days, building in public and engaging with audiences can help create buzz. It’s tempting to highlight big numbers to gain social proof, attract investors or boost morale. But the real risk comes when teams start making decisions based on these superficial wins.
Growth marketing campaigns, product rollouts and investor reports must be grounded in numbers that reflect real progress. Chasing vanity metrics may keep appearances up in the short term, but it distracts from what truly drives business success.
Building with Discipline
Smart businesses set internal KPIs based on revenue health, customer satisfaction and long-term efficiency. They monitor growth with a critical eye, avoiding the trap of pursuing traction without substance.
It’s also why many of the most successful founders don’t hype every single milestone. They understand that true growth is often quiet, compounding in the background through retention, referrals and repeat revenue.
Metrics should be tools for clarity, not decoration. In the tension between revenue and vanity, the winners are always those who know the difference.
