Not Everything That Can Be Counted Counts Ross | October 11th, 2010

It’s tempting to count everything that can be counted. The current obsession with social media ROI is just one example – of many – showing how numbers influence our behavior.

I had the opportunity to again think about this issue last week when I was on a panel at a Startup Bootcamp event in Boston. We discussed, among other things, data analysis and how some startups regularly look at the data to learn insights and help plan strategy.

I expressed my view: trying to count everything can be wasteful, distracting and can lead to decision paralysis. Startups and small businesses that become obsessed with metrics often lose their way.

Not all metrics are important. Albert Einstein famously said:

Not everything that can be counted counts, and not everything that counts can be counted.

Wise words – most startups and small businesses should take those words to heart.

Data is important, but you should let your assumptions and theories drive your analysis of the data, not the other way around. (for some tips on working with data, I recommend you read 5 thoughts for startups and small business: numbers count.

We tend to rely very heavily on metrics crowdSPRING andcan easily become distracted if we don’t smartly pick and choose the metrics that influence our decisions. Sometimes, we make the right decisions and focus on the right metrics. Other times, we make the wrong decisions and lose focus, paying attention to metrics that turn out not to be as relevant as we thought. (Last week, I suggested four questions you should ask when making decisions based on metrics and statistics).

Given the wide availability of good software and plenty of data (from your internal and from many external sources), it’s pretty easy for startups and small businesses to measure pretty much anything.

One of the lessons we’ve learned from our successes and failures: we are more likely to succeed when we spend a greater portion of our efforts discussing and debating what should be counted – and a smaller portion of our effort counting.

Numbers are good – but everything does not need to be counted.

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  • Jared McKiernan

    Right on- the key to analyzing the numbers is knowing what they do and don’t show- not forcing yourself to read into the limited data available, a trap many small businesses fall into.
    Like what you guys are doing on the blog- definitely one of the best small biz blogs out there.

  • http://twitter.com/rosskimbarovsky Ross Kimbarovsky

    Much thanks for the kind words, Jared.

  • http://www.dog-blessed-silverwalk.org/ Roberta

    What I am hearing more and more from my large employer is “numbers don’t lie.” However, numbers don’t contain the entire truth, either, leaving out the human equation. I find it dismaying to see my hospital headed down this path. Thanks for a very good article.

  • Save The Student

    Social Media is simple the best example for this

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