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Vanity metrics don’t have to be high numbers, they can be low numbers too. The author is just swapping high head count with low head count as a vanity metric, u
by boopboopbadoop 5y ago
Vanity metrics don’t have to be high numbers, they can be low numbers too. The author is just swapping high head count with low head count as a vanity metric, using low headcount as an efficiency indicator. Without knowing what the people are working on/achieving, headcount is useless either way.
- bckr 5y ago> The author is just swapping high head count with low head count That's actually not the conclusion. They suggest looking at ARR/FTE.
- boopboopbadoop 5y agoTo show my point with an example, according to him, 10 devs keeping the lights on has a better AAR than 15 devs that are keeping the lights on and adding new value. But the former is not more efficient than the latter.
- mavelikara 5y agoWhat is AAR?
- nsp 5y agoPretty sure they mean annual recurring revenue (ARR)
- mavelikara 5y agoThen this clause makes no sense: > 10 devs keeping the lights on has a better AAR
- boopboopbadoop 5y agoSorry, I meant ARR/FTE ratio, the metric that the article and the person I replied to are using.
- mavelikara 5y agoOk. If the 15-member team is adding value alongside the maintenance, that will surely be showing up as increased ARR. If the increase in ARR is > 50%, the 15-member team will be doing better in ARR/FTE. I don't still get your objection to the point made in the article.
- boopboopbadoop 5y ago> If the 15-member team is adding value alongside the maintenance, that will surely be showing up as increased ARR. No, and this I think is the root of my point. Anything not producing AAR yet (e.g. developing a new product) has no impact on your AAR, but adds headcount, thus skewing any insight AAR/FTE would give.
- mavelikara 5y agoThis point, I believe, is implied in the article. The trend of ARR/FTE is what the author recommends measuring as a metric.
- boopboopbadoop 5y ago> So, one of the few reasons to ask for the startup headcount is to compare to its revenue and quickly evaluate its soundness. This line lead me to believe otherwise. I agree the trend is more valuable, but still has issues (e.g. months- or years-long projects will have no value until they are released)
- jstummbillig 5y agoAll else being equal, low head count is simply better than high head count from a business standpoint.
- boopboopbadoop 5y agoSure, I guess my point is that all else is never equal.
- jstummbillig 5y agoHaha, fair enough.