Lean Analytics: Use Data to Build a Better Startup Faster (Lean (O'Reilly))

by Alistair Croll

Consider, for example, “total signups.” This is a vanity metric. The number can only increase over time (a classic “up and to the right” graph). It tells us nothing about what those users are doing or whether they’re valuable to us. They may have signed up for the application and vanished forever. “Total active users” is a bit better — assuming that you’ve done a decent job of defining an active user — but it’s still a vanity metric. It will gradually increase over time, too, unless you do something horribly wrong. The real metric of interest — the actionable one — is “percent of users who are active.” This is a critical metric because it tells us about the level of engagement your users have with your product. When you change something about the product, this metric should change, and if you change it in a good way, it should go up. That means you can experiment, learn, and iterate with it.