Measurability and Metrics are King
Lately I’ve been thinking about success and how it is achieved. I feel that a large part of success is simply being able to produce reasonably accurate statistics that prove your success. 1 million members, 10,000 clicks a day, $1 million in revenue, etc.
I got the idea while I was at the Big Design Conference in Dallas, TX. I saw Stephen Anderson‘s talk about turning everyday activities into games, and then went to Amy Buckner‘s talk about web analytics. Competition is like a race to see who can get the most of something. This something can be users, traffic, money, or something else; however, without a number, this information is meaningless.
In our culture, numbers have some serious gusto. They are the deciding factor in everything we do. Do you eat the food that’s cheaper, or the one with less calories? Do we buy the car that gets better MPG or has more horsepower? Do we invest in the company with a better P/E ratio or a larger market share?
Because of this bias, competition between businesses can easily be influenced by metrics. We often hear “Wonkybutz just passed X million users” or “Net profits for Tequilavision just exceeded $1 million”. When these headlines hit the media channels, popular opinion is greatly effected. We read these short phrases with a number in them and subconsciously think, “Well, I guess that means they’re king of the hill now”. The first company to publish a metric with any clout is often deemed reigning champion, or at least an early leader.
Recently, this happened last Wednesday with Apple and Microsoft when Apple’s market capitalization exceeded the Redmond folks for the fist time. This news spread like wildfire. People started speculating. Are people going to take Microsoft more seriously now that they’re the underdog? I was guilty of this myself.
Unfortunately, metrics are widely misunderstood. It is easy for a company to publish inflated or misleading metrics, and this has powerful implications on popular opinion. Most people don’t understand market capitalization as a metric, and those that do are still effected by its social impact. Capitalization is based on speculation. The total value of Apple’s public shares, in USD, is now greater than Microsofts. It is a stretch to say Apple is now more powerful than Microsoft, because market capitalization is NOT a measure of power or influence. Sharon Machlis does a good job at pointing out the facts.
So much of our lives is based on numbers. Science is driven ever further towards a better future because of measurability. The tides of our economy rise and fall in unison with popular metrics. Online culture is at the mercy of analytics. When we’re surrounded by numbers on a daily basis, it’s easy to get lost in them. We must constantly remind ourselves: “This is just a number. What does it really mean?”.
