Thanks for stopping by. Today we’re talking about how positive metrics can seriously trip up new entrepreneurs.
Wait, “How could positive metrics possibly be a bad thing?” you ask. Well, it’s not the positive metrics in and of themselves that are a problem; it’s what new entrepreneurs do with those metrics.
Let me tell you about when I first started my consulting business. I was working in DC at a non-profit helping small business owners grow their companies to the next level but I missed working with startups, as I had when I was at the venture capital firm and when I ran the Institute for Entrepreneurship and Innovation, so I started seeing clients that weren’t covered by the grant at my non-profit job on the side and then it spiraled out from there. When I left the non-profit to go out on my own, I also left DC and began my life as a nomad.
So, I built my website and started tracking all of the stuff I thought I was supposed to track, like how many page views I was getting each month and how many followers I got on social media or subscribers I got to my YouTube channel each week. I was getting slow but steady growth in all of these areas, so I thought I was on the right track. I also still had clients coming in from my networks in DC – 100% of new business at that point was referrals from prior clients or colleagues. All seemed to be going great to me – but that was just me being naive.
You see, visitors to your site and subscribers to your YouTube channel are great, but they’re really just vanity metrics. By that I mean they are metrics that are good for your vanity – they make you feel good and help you pretend like you’re accomplishing stuff, but they don’t actually help your bottom line. At this point, I wasn’t getting a single client from my online activity. I was just racking up a few more followers each week and still getting clients from DC. And then, eventually, that ran out. I haven’t been back to DC in well over 2 years now so, yes, I do sometimes get a referral still, but I’m not at events and staying top of mind, so that business has waned.
Unfortunately, when that first started to happen, I wasn’t prepared because I had been focused on the vanity metrics and thought my online biz was doing great. Well, it wasn’t. All that follower growth was what Mark Suster calls “fauxmentum.” It’s not real. It looks and feels like momentum, but it’s no more real than that handbag you bought in Chinatown. I was paying attention to visitors instead of conversions and YouTube subscribers instead of email subscribers.
Now, clearly, I am still here. If you’ve been with me for awhile you saw some of the website revamps I did and you’ve watched me create ecourses and write books. All of that has helped me build a real online business instead of the DC-based business that I thought I’d taken online before. I was able to figure it out, but I wasted a whole bunch of time – well over a year of time – letting myself enjoy the fauxmentum I was experiencing and not making the changes I needed to make.
So, I tell you this cautionary tale – yes, it’s cautionary even though it’s not too dramatic – so that you can learn from my mistakes and not fall victim to the vanity metric trap.
Firstly, figure out what metrics really affect your bottom line and pay attention to those and only those. The other stuff is fluff.
Second, don’t freak out when you realize that your business probably isn’t in the shape you thought it was.
Third, make the necessary changes based on those real metrics so that you can start gaining some real momentum, not just fauxmentum with your business.
It may be an unpleasant pill to swallow at the beginning, but it’s definitely to your benefit in the long term.