AirBnB’s metric of “Nights Booked” is interesting because it’s not directly linked to profit. Instead, it tracks how much value bookers and hosts get out of the app. They likely picked this number as a proxy for ACTIVE users and successful guest-host matches. Other proxies, like spend per user or nights per user, favor certain types of bookers (cheap travelers versus luxury, power-stayers versus one-nighters). However, this could be gamed by expanding into new cities rather than improving listings in existing ones. They could also require that every host accept every guest, though this would cost hosts control over who stays in their homes.
Facebook’s measure of 7 friends in 10 days is a leading indicator of retention. It is simple and flexible (7 friends in one day is as much of a success as 7 friends in 9), and it gave the growth team one focal point. It is a proxy for how many of a user’s real-life friends are on the app and how easily they’re found. This could be gamed by flooding every user with “People You May Know” suggestions, but that would feel like constant bombardment and pull time away from their News Feed.
Slack’s measure is 2,000 messages, with no time limit. For a small team, it may take weeks but only 10 hours for a 50-person team. Once that line is crossed, 93% of teams stick around. They chose it by watching which companies stayed, so it is a proxy for having really tried the service. This is easy to game with bots posting automated alerts or pinging users to send messages, but that would bury real conversations in noise.
In all three, Goodhart’s Law applies. A team will optimize the target without thinking about the proxy, often ruining that original value.
AirBnB source: https://hackernoon.com/north-star-metrics-driving-business-growth-with-focus
Facebook source: https://mode.com/blog/facebook-aha-moment-simpler-than-you-think
Slack source: https://review.firstround.com/from-0-to-1b-slacks-founder-shares-their-epic-launch-strategy/
