Purpose is hard to measure

There’s a challenge in trying to make things or lead companies that try to serve a greater purpose. Purpose can be hard to measure.

If we look at the metrics we often use to gauge the success of products or companies, they tell us very little about whether the subject is successful at fulfilling it’s purpose or not.

One of my favorite quotes about the potential downfalls of using the wrong metrics to measure something is by RFK on the topic of using GNP to measure the success of a nation:

The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.

In the same way that GNP fails to encapsulate important parts of the bigger picture, I believe many of the metrics we are using to measure the success of our products and companies are also failing to frame things in context of a greater purpose. The truth, is that a product can be profitable and have high user-engagement and retention without leading to any meaningful improvement in people’s lives; sometimes it can even have a negative impact. Let’s call these products “cigarettes”. After all, cigarettes maybe profitable for the companies that create them and they sure have high user-retention, but they create tremendous negative externalities for society.

On an other note, it’s easy to understand why many of us simply choose to use existing metrics to gauge our success instead of inventing new ones. After all, creating anything new takes time and energy, and these are often two of our scarcest resources. But even if it takes additional effort, I believe the time has come for more of us to start working on new ways to measure our success. If you have ideas about how to do this, I’d love chat.

To those who say, “But investors only care about existing metrics… why should we spend the time and energy to develop new ones?” I don’t think this is true for the long-run. Maybe at first investors will be skeptical of doing something new, but let’s remember that investors are people and people often don’t know what they want until they’re actually presented with it. I’ve met and heard so many angel investors who say they became angels in order to increase the leverage they have in improving people’s lives and making a meaningful contribution to the world. I believe many of them speak their true intentions; however, they are still using basic financial and user engagement metrics to measure success, simply because other better metrics have yet to be created. As a result, they turn to the closest symbols of “success” they know of — even if these metrics are poor at assessing what truly matters.

Let’s find new ways of measuring success for two reasons:

1. So investors can stop investing in cigarette companies and start taking bigger risks on teams that actually have a chance at making a meaningful contribution to the world.
2. So we can gain greater awareness of the impact we’re actually having on people’s lives, and more often treat the work we do as a gift — because it is.

Our current metrics can only help us to improve so much, they’re no compass for purpose.