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Every founder has been guilty of this at some point: leading with the wrong metric. Downloads, signups, PR hits - they look good in a pitch deck, but they don’t build enduring companies.
The truth? Most of the numbers early-stage founders obsess over are vanity metrics. They’re easy to measure, easy to celebrate, and easy to inflate. But they won’t get you funded by top-tier investors and they won’t keep your company alive.
Today, let’s unpack which metrics are overrated, which ones actually matter, and how great founders keep their eye on the right scoreboard.
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The Vanity Metrics Trap
When I ask an early founder about traction, the most common answers I hear are:
“We have 10,000 downloads.”
“We hit 50,000 signups.”
“We were featured in TechCrunch.”
Here’s the problem: none of those metrics prove that you’ve built something people need. Downloads can be bought. PR cycles fade after a week. Even signups mean very little if most of those users never return.
Vanity metrics exist to make decks look exciting. But in diligence calls, real investors dig deeper, and that’s when the facade falls apart.
Case Study: When Vanity Metrics Backfire
I once met a founder who bragged about a 100,000-person waitlist. Impressive on paper until we asked how many converted to paying customers. The answer? Fewer than 100.
That’s not traction. That’s a mailing list. And it killed their ability to raise from serious investors.
Contrast that with another founder who only had 50 paying customers but each was spending $500/month. That was enough to secure a strong seed round.
Why? Because willingness to pay trumps every vanity stat in the book.
What Really Matters: Retention
The first metric that separates hype from substance is retention. Do people come back after using your product once? Do they use it more over time?
Retention is the clearest sign that you’re solving a real problem. You don’t need 100,000 users if you can prove that 10,000 keep coming back week after week. That’s the difference between a novelty and a product with staying power.
Great companies obsess over retention curves. If you can’t show them, nothing else matters.
Runway is the Real KPI
The second overlooked metric is cash runway. Founders often bury it in the appendix of their pitch deck when in reality, it should be front and center.
Every board meeting I’ve ever been in starts the same way: “How’s cash flow?” Not “How’s growth?” or “What’s the press saying?” Cash flow first. Because companies don’t die from bad PR or slow user growth. They die when they run out of money.
Investors want to know one thing: how much time do you have left to figure this out?
Willingness to Pay > Everything Else
The third and arguably most important signal is proof of willingness to pay. It’s not enough to get users in the door. Do they care enough to pay for what you’ve built?
I’ve seen startups raise $5M on a massive waitlist, only to fold when no one would actually swipe a credit card. And I’ve seen others with just 50 loyal customers who were paying $500/month, and those companies grew into nine-figure exits.
Revenue is the ultimate form of validation. Even if it’s small, even if it’s scrappy, it speaks louder than any vanity metric ever could.
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Why Founders Obsess Over the Wrong Metrics
It’s not that founders are arrogant. It’s that the wrong metrics are easier to measure and easier to spin. Retention takes time. Revenue takes real proof. Runway forces you to make hard decisions.
So most founders lead with the vanity stats. And in the short-term, they might even win attention or small checks. But when it’s time to raise from tier-1 investors, the kind who build unicorns, those metrics won’t cut it.
Investor Psychology: What We Really Look For
Here’s the insider truth: investors don’t get excited by big numbers, they get excited by numbers that prove behavior change.
If you tell me you had 50,000 downloads, I don’t know anything. If you tell me 40% of your users log in every day after 90 days, I know you’re onto something.
If you say your ARR doubled in three months, I want to know if it was from discounts or true demand. Context matters and serious investors dig until they get it.
The Danger of Topline Growth at All Costs
A lot of early founders chase “big topline” metrics because they think it will get them funded faster. And sometimes, it works in frothy markets. But the crash always comes later.
The companies that survive downturns aren’t the ones with the biggest top-line numbers. They’re the ones with sticky customers, disciplined cash flow, and a clear path to sustainable growth.
My Advice for Early-Stage Founders
Track retention from day one. If you don’t know your cohort curves, fix that immediately.
Be transparent about runway. Hiding it doesn’t extend it.
Find your first revenue signal. Even a tiny check proves more than a million downloads.
Early-stage startups don’t need to look “big.” They need to look real. The founders who focus on the right metrics don’t just raise money, they build companies that last.
That’s all for this week.
Next time you update your investor deck, ask yourself: Am I leading with vanity? Or am I showing proof that people love, use, and pay for what I’ve built?
Because at the end of the day, the best metric is the one that keeps you alive.
Until next week, Elana ✌️
Resources
If you enjoyed this week’s newsletter - feel free to check out some of our past articles:
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