daily articles for founders

Always drill down to fundamental metrics  

Paras Chopra:

In a nutshell, conversion rate by itself doesn’t tell much (unless you have extra information like traffic, sales price, lifetime value, traffic mix, etc.) So a website with 1% conversion rate may not necessarily be worse as compared to a website with 10% conversion rate. Conversion rate in isolation is a useless metric.

As we've mentioned before:

... at the end of the day, the relevant metrics depend on what you're trying to figure out, what hypothesis you're trying to test.

If you're acquiring a company, there are certainly relevant fundamental metrics: revenues, gross, operating and net profit margins, and the trends of the market and the company within it (for a business acquisition, as opposed to a talent or technology acquisition). As Paras points out, conversion rate, in isolation, is less than useful.

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