Vanity metrics are numbers or statistics that look impressive on the surface but don't actually give you a good sense of how well your SaaS startup is performing.

They are called "vanity" metrics because they are often used to make a startup look good to investors or customers, rather than actually helping the startup to make informed decisions and improve its performance.

A good example of a vanity metric in SaaS businesses would be the total number of users.

Why is it a vanity metric?

Well, a SaaS can have 5,000,000 users & generate 0 MRR.

0 out of 5,000,000 are PAID USERS.

You shouldn’t evaluate a startup based on total users, pageviews or time spent using the product.

You should evaluate a startup based on monthly revenue, monthly profit, paid user signups per month and retention rates.

Simple really, but many founders forget this part & get caught up in the candy.

I get it, it’s rewarding.