Admit it: running a business can feel a little depressing. As soon as one thing gets fixed, another one needs your attention.
What’s easy to forget, though, is that this isn’t a bad thing.
In fact, when you know that something is going badly, that’s a good sign.
Don’t get us wrong – when things break or fail or don’t work the way they should, it’s a pain. But like any doctor will tell you, pain isn’t something you should ignore.
Look at churn, for example – the percentage of people who stop being customers during a given time period.
We’ve been told that our company’s way of calculating churn is both aggressive and depressing – like a heavy metal band covering an Adele song.
But that’s the way we like it! More importantly, that’s the way we need it. In fact, this is the way you should look at your own performance, too.
Why be such a downer, though? Why make your statistics as harsh on yourself as possible?
Your numbers are for your own benefit
When you’re a bootstrapped business like ours, you don’t have to worry about impressing anyone with your numbers. You don’t need to wow investors to keep the lights on – you just have to make profits.
Any entrepreneur will tell you it can be stressful – but it’s also pretty liberating.
Sure, you can spin your numbers to make them sound more impressive than they actually may be, but who are you really trying to prove something to?
In the past, for example, Facebook has counted anyone who watches as little as three seconds of a video as a “view.” YouTube, at that same time, only counted someone as a “view” if they watched 30 seconds – 10 times as much.
You can probably guess which one of those standards makes it easier to rack up impressive-sounding statistics.
This is one of those times when you can understand why somebody calculates their stats a certain way. After all, Facebook’s been pushing video for a while – and the higher their viewcounts, the likelier it is that more people will try their luck uploading videos of their own.
When we look at a statistic like our churn, though, we take the YouTube approach – we want that statistic to be as harsh as possible.
We could make it look better by saying that some people “count” and some people don’t – for example, a lot of businesses don’t include new customers who leave before a certain point when they’re calculating churn.
That would make it a lower (and more impressive) percentage, but it’s not one we’ve found all that useful – and it’s a perfect example of why you should take a harsh view of your stats.
It takes brutal honesty to find – and fix – a problem
A bad statistic is like a stain on your dress – you can cover it up with a tasteful corsage, but that doesn’t make the stain go away.
If you really want to do better – and not just make it look like you’re doing great already – you have to confront that stain head-on.
Look at our example about churn. We could make that percentage lower by writing off the people who sign up for Edgar and unsubscribe early, but if we’re honest about that number instead, we can use that information to build something even better.
Because we don’t sugarcoat our stats, we can identify opportunities to make Edgar even better for new users – and to lower the percentage of new users who decide to cancel. (It’s given us the insight we needed to build a powerful RSS feed manager, for example, so people can load updates faster and easier.)
If we just wrote those people off instead, the churn number we report would be lower, but it wouldn’t be as helpful for us.
You can take this approach with a LOT of different aspects of your business, too.
Say you write a blog post that doesn’t attract as big an audience as you’d hoped. You could take the “you win some, you lose some” approach, or you can be brutal with yourself and look for things to improve.
Maybe the headline didn’t grab attention, or your audience wasn’t interested in the subject matter. Maybe it wasn’t promoted on social media enough, or at the right times. If you promote with a newsletter, maybe your open rates or clickthrough rates weren’t as high as usual.
Got a bounce rate that’s higher than you’d like? Don’t assume it’s a problem with your audience – figure out why. Maybe you need to make changes to your sales page, or include more links in your blog posts.
Looking at these things gives you the opportunity to ask why – and answering that question means you can do better in the future.
The more often you ask it, the more chances you give yourself to improve!
Time to face the truth
Taking a harsh view of your own performance isn’t always fun. (Okay, it’s pretty much never fun.)
When you rationalize and put too much spin on your numbers, though, you deprive yourself of opportunities to grow!
So go ahead – try taking an aggressive, depressing perspective! Avoid the logic loopholes that make a weak statistic look strong, and you won’t just feel better about those numbers – you’ll actually be able to change them.