Most Traditional Business Metrics Tell Only Part of the Story
How do you measure the success of your business?
The most common metrics are:
1. Profit
2. Revenue
3. Stock price
But all three are short-term, easily manipulated, and carry little meaningful information.
· You can boost your revenue simply by lowering prices — Uber did that for years.
· Profit is a backward-looking, short-term metric shaped by tactical decisions.
· The stock price says more about investor sentiment than about the actual business.
Even if your profit is high today, it can evaporate tomorrow.
We can’t ignore financial metrics, but they represent just one aspect of an overall analysis.
Having a strong brand and a loyal customer base is great—but Nokia had both in 2007, and that didn’t save it. It had won customer loyalty with the past products but didn’t have ideas for the future ones.
Assessing a business means paying attention to its past, present, and future.
When I join a company as an advisor or board member, I ask the following questions:
1. How many loyal customers do you have? How do you measure the number?
2. How quickly is this number growing?
3. What is your current financial state (P&L, cash flow, balance sheet)?
4. How many innovative products do you have in your pipeline?
5. What are these product ideas based on? Are you building them because you know they’ll meet customer needs or just because you like them?
Having cash, a strong brand, and loyal customers is a good sign your business can withstand future challenges.
But a strong backlog of ideas improves your odds.
People in Hollywood are wiser than those in Silicon Valley
Silicon Valley builds AI agents to give people more free time.
Hollywood knows nothing terrifies them more than free time.
Most people are freaked out by the idea of being left face-to-face with their own thoughts.
Software engineers in Silicon Valley often assume everyone thinks like they do — but they don’t.
People don’t need more time; they want to think less.
Investing in a bit of circus — emotion, distraction, spectacle — often delivers higher ROI.
A childish generation
A quote from the Economist:
“Young workers are taking mini-retirements to escape their stress
More young U.S. workers are choosing “mini-retirements.” They pause careers to travel, explore hobbies, or grow personally. It’s a shift toward work-life balance, valuing experiences over climbing the career ladder.
What if leaders embraced a holistic approach to management that supported employees’ personal fulfillment and mental well-being?”
Some might see it as a symbol of young people finally breaking free from the heavy chains of labor.
But to me, it feels more like my generation — those of us over 50 — has raised a generation so immature it can’t even handle a 40-hour workweek.
A present for you
A year ago, I published my book Red and Yellow Strategies: Flip Your Strategic Thinking and Overcome Short-termism. To celebrate the anniversary, I’m offering a special price — all through June.
🎧 Get the audiobook at a special price here.
📘 Get the ebook at a special price here.
⭐️ Upgrade to a paid subscription and get the book for free — plus full access to the archive, all podcast episodes of the book, and every members-only post on Substack.
And of course, you can still grab the book at full price in your favorite bookstore.
My best strategy quips of the week
- When some clients ask me for help with strategy, what they really want is an IKEA cabinet — with step-by-step assembly instructions.
- When I hear “Your call is very important to us…” while waiting on hold for twenty minutes, my brain quietly finishes the sentence: “…but some calls are more important than yours.”
- In a family, someone who thinks they know what everyone else needs is called a tyrant.
In politics, they’re called a dictator.
In Silicon Valley, someone who thinks they know better than consumers what they need is called an entrepreneur.
Download more Strategy Quips here.
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Read also: Not Knowing This Value Equation Almost Cost Me Everything as a CEO
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Svyatoslav Biryulin