The Hidden Problem With Data
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The Hidden Problem With Data
Most businesses are drowning in metrics but can't make a single confident decision.
It's almost comical. We have more data than ever, yet we're more paralyzed to act than ever before. Every week I watch smart entrepreneurs open their analytics dashboards, stare at the numbers, and feel completely stuck.
But data paralysis isn't the real problem.
The real problem is that we've built businesses on a foundation of vanity metrics that don't actually matter. We track everything because we can, not because we should.
Take Buffer's journey with data. Back in 2016, Buffer's analytics showed massive growth in social reach and engagement. Their content was being shared millions of times. Every graph looked beautiful.
But when they dug deeper, they discovered something disturbing - all those shares and likes weren't turning into customers. They had optimized for the wrong metrics entirely.
This is what happens when you track data without knowing why.
You end up with a beautiful dashboard full of meaningless numbers. And worse, those meaningless numbers start driving your decisions.
The truth is that most businesses only need to track a handful of metrics. Not hundreds. Not dozens. A handful.
But they need to be the right ones.
The Three Types of Data That Actually Matter
Let me tell you what happened at Amazon in the early days.
Jeff Bezos noticed something strange. His team was spending hours analyzing shopping cart abandonment rates, page load times, and dozens of other metrics. But when he asked what actions they were taking based on all this data, he got blank stares.
That's when he implemented what became known as the "two pizza rule" for data - if you can't analyze it and make a decision over the course of a two-pizza team meeting, you're tracking too much.
Data exists to drive decisions, not discussions.
You need three types of data. Nothing more.
First, you need survival metrics. These are the numbers that tell you if you'll be around next month. Revenue. Profit margins. Cash flow. Customer acquisition cost. These aren't exciting, but they're the foundation. Without these, all other metrics are meaningless.
Second, you need behavior metrics. These show you what your customers actually do, not what they say they do. A restaurant doesn't need to track social media likes - they need to track which menu items get reordered. A gym doesn't need to measure email open rates - they need to measure how often members show up.
Third, you need leading indicators. These are the early warning signs. The small shifts that predict big changes. When Airbnb noticed hosts taking longer to respond to booking requests, they knew it meant fewer completed bookings were coming. They fixed the problem before it hit their bottom line.
But here's what makes this powerful - these metrics change based on your business stage.
A new restaurant needs to track daily cash flow and food waste. An established restaurant chain needs to track same-store sales growth and menu optimization. Different stages, different decisions, different data.
The Action Framework
The problem isn't that we don't have enough data. The problem is that we don't have a framework for turning data into action.
Shopify's founder Tobi Lütke understood this better than most. In Shopify's early days, he ignored most traditional ecommerce metrics. Instead, he obsessed over one metric - time to first sale for new merchants.
Why? Because he knew that a merchant who made their first sale quickly would stick around. One who didn't would leave. Every product decision, every feature, every change was measured against this single metric.
This is what an action framework looks like in practice.
First, you identify the core business problem you're trying to solve. Not "we need more data" but "we need to know if our customers will stay."
Then you find the smallest piece of data that would answer that question. Not a complex dashboard. Not a month-long analysis. The smallest piece.
Finally, you set a trigger point. A specific number that will force you to take a specific action. No debating, no committees, no endless analysis. When you hit the number, you move.
This is how you turn data into decisions.
Building Your Decision Engine
Most businesses have data. Few have a decision engine.
A decision engine isn't a fancy AI system or complex analytics platform. It's a dead simple process that turns numbers into actions.
Here's how you build one.
Start with a blank document. Write down the three most important decisions you need to make in the next month. Not goals. Not metrics. Decisions.
Under each decision, write the minimum data you'd need to make that decision. Not what would be nice to have. The minimum.
Now set a trigger point and a deadline. "If this number hits X by Y date, we will do Z."
That's your decision engine. Nothing more.
Look at how Brian Armstrong built Coinbase. In the early days, he tracked one key metric - weekly active users. Why? Because he knew that if someone used the platform weekly, they'd stick around. If they didn't, they'd leave.
His decision engine was simple. If weekly active users grew, they'd double down on what worked. If they dropped, they'd immediately change course. No committees. No endless debates. Just clear triggers driving clear actions.
This is how you escape data paralysis.
You stop trying to track everything and start focusing on the metrics that force decisions. You stop building dashboards and start building trigger points.
The businesses that win aren't the ones with the most data. They're the ones that can turn data into action the fastest.
This isn't about being perfect. It's about being decisive.
Stop drowning in numbers. Start making decisions.
That's how you turn data into results.
Next Steps
Today, grab that blank document. Write down one decision you need to make. Find the minimum data you need. Set a trigger point and deadline.
Do this every week.
In a month, you'll have more clarity than a year of staring at dashboards could ever give you.
The opportunity isn't in collecting more data. It's in using the data you have to move faster than everyone else.
Take control of your numbers. Or your numbers will control you.
– Scott