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Do not fully trust KPI's

I've told this story many times to a numerous people in my field, but some never really fully grasp what they're really doing to the product when they turn their goals into numbers.

Too often I see developers and product managers making the same mistake of setting a specific set of KPI's, and they grind towards it only to realize that they aren't always relevant to your product's success.

I used to love metrics, KPI's (admittedly still do) and the sense of accomplishment and reassurance it gives me when I achieve/exceed them week after week. But one experience changed my perspective, forever.

I used to work for a $200m MRR developer in a very niche yet insanely profitable industry. I guess the company felt like it needed some challenge so they started a new project, which I became part of as a growth/acquisition manager. Since we were swimming in capital/manpower, the development went smoothly. And with folks from Facebook and Google who flew over to our office to help us with whatever, we were ready for launch day.

We exceeded every single KPI the management has set for us. We spent the entirety of the marketing budget every month and managed to get the absolute best out of the money. Some even ominously remarked that the metrics were "too" good for the product. We were victorious, in the game of KPI's, until we had to kill the product a year after launch.

There was a fast-growing community within our service that we thought nothing of, and as far as we could tell, it was actually a good thing to have such an active group of people. But we never realized that this community was slowly pushing/bullying other people out of our product. Even when this was happening, nothing about the amazing metrics really changed. We were growing a bit concerned, however, at the retention rate of the more recently acquired users, but we barely minded it because our ever increasing marketing budget had us acquire a very big volume even from the demographics that weren't really our usual target - to which we attributed the drop in the recent retention rate.

For months, this community positioned itself in dominating every discussion, event, and the product's direction. Only when the community eventually disbanded due to an update that they didn't agree with, we finally saw what had happened. But it was too late.

Since then, I've seen something like this happen to a good amount of developers, big and small, in varied industries. I've even seen similar cases in sports teams. It is always a difficult challenge to tell people in either celebration or desperation that numbers aren't everything. But I hope at least some of you already know or now realize to be skeptical of KPI's.

If you have any questions, leave a comment!

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    KPIs matter a lot to get a fact-based perception of how your product is performing. But there are relatively pointless if only sustaining a short-term vision: you may have excellent KPIs achievement on a short-vision objective, and yet miss out on the bigger picture, which is eventually what will sustain your company's growth.

    One way to mitigate this that has been successful in my businesses has always been to set KPIs per category of "vision": short, medium and "ultimate goal".

    This way, you can't just rest happily on your laurels if you excel at one set. You must consider all others. This holistic view helps read through the KPIs and their results, and somehow avoid/mitigate the sort of situation you have lived through.

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