In this article, I’ll clarify how to define success for your product by defining the one important “metric that matters” and then how to set the appropriate goals.
What is the one metric that is most important to your company strategy and that boosts your team? The answer depends on the aim of the product and the vision of the company. The active users for Facebook, the volume of messages for WhatsApp, gross merchandise for eBay, and overall payment volume for PayPal.
eBay’s vision for commerce is “enabled by people, powered by technology and open to everyone.”
eBay’s mission is “to be the world’s favorite destination for discovering great value and unique selection.
Taken together, these two statements point to eBay’s vision of a future in which anyone can find everything they want, no matter how obscure, at a reasonable price.
What is the best top-line metric to capture this goal?
- The number of active users shopping on the site?
This metric does not assess whether consumers are able to find what they are looking for at the right price.
- How about the number of active buyers?
Although this and similar buyer-side metrics can tell us if consumers are finding what they want at the right price, they cannot answer eBay’s mission statement’s “special range” criterion.
- How about the number of sellers?
This metric can be useful, but it does not account for the inventory that sellers are listing.
The metric we select should ideally count the number of unique products sold. A high number will imply that consumers are getting what they want and at the right price. As a result, the “right measure” in this situation will be the market share of unique selections sold. This metric, however, is complex and difficult to define, calculate, and develop. Instead, eBay chose gross revenue as its top-line measure.
- Do not be afraid to change the metric if you need to.
- Choose a simple metric that connects to your drivers.
- Pick the metric that most closely represents the usage of your product.