ROI is a Vanity Metric and The Real Secret to YC's Success

I recently chatted with a company that created a great tool for engaging your facebook fans in an authentic way. A proven way to bring ROI to your social media efforts. The tool looked for life event triggers in their social profiles and let you engage them in a personal way. Everyone they pitched loved the idea and product, but almost no one signed up. Instead they said, “What we really want is more Fans.” Seems counter-intuitive to me. Why would they turn down a proven formula to monetize their fans, and ask for a way for more fans that they refuse to engage and monetize properly.

Then it occured to me. NO ONE cares about ROI. They just want to be validated. Giving Them Money is the highest form of validation. ROI, Thats just a number I use to justify doing the things that make me feel good about myself.

The proof is in the pudding. Whats the ROI of a missed opportunity? A penny saved is a penny earned. So 100% ROI by my math.

Every day I personally miss out of amazing opportunities to make money all around me. The truth is, I don’t want to make money. I want to feel good about myself. The greatest form of flattery is giving me your money:) But, if I can make money, but it doesnt make me feel needed, than whats the point. After all, I make a penny everytime I don’t spend a penny.

Do you know what the single most prominent form of marketing that exists is? I bet it is referrals. Referrals are the holy grail of making money. Ask any professional and they will say, most of my business is from referrals. If you really want to succeed, build a referral base. But I bet if I asked them, “Do you ask everyone you know and work with for refferals?” I bet 9 out of 10 will say no.

Guess why? My bet is it defeats the true reason you want referrals. An unsolicited validation feels amazing. But, when I ask for the referral, I might make more money, but it’s hardly a validation of me by any means. At best, it’s a validation that I didn’t suck, or that the referrer wants to feel good about himself.

An even better example is your marketing messaging. Top Branding experts say the purpose of a slogan is “passalong advertising” and should answer the question, “Why should I do business with you?” This is a perfect opportunity to influence how people talk about you. But, 9 times out 10 people would choose a catchy and clever slogan over one that does it’s job. Why? because it is a way to validate themselves and feel cool.

As human beings, we are crafted this way. When what we desire is to be validated, we create, we contribute, and give of ourselves to others. We want to feel needed, so we make people need us. We all do it in our own way, but it is how we are built.

This is what makes the world go round. This is what keeps things progressing and developing. This is why we make startups. This is why We try to change the world. The bigger problems we solve, the more people we help, the better we feel about ourselves, and the better the world becomes.

Here in lies the rub though. When you get millions of users too quickly, raise millions from VC’s, Get accepted into a top incubator, it can get to your head. It can artificially inflate how your ego to the point of detracting from the world. You put others down, make them feel worse about themselves, and you start breaking the world instead of creating the world. This will lead to crashing and burning. Many people rise and fall. You rise when you create, you fall when you destroy.

This is the secret to YCombinator. A group of mentor, of creators, and their massive network, help you build and create. They encourage you, make you feel good about yourself. Accept you for who you are and encourage you to be the best version of who you are. Even those they don’t accept, they still encourage and motivate. Hacker News has Karma to help give you the boost and validation you need to keep on trucking.

This is the SECRET TO SUCCESS! Focus on what makes you feel good, and you will realize what makes you feel good is being accepted by others. Others accept you because You give to them, you solve their problems, and make their pain go away. YOU MAKE THEM FEEL GOOD ABOUT THEMSELVES.

This is the secret to a successful startup. Make your users feel good about themselves.

If you are building an advertising or marketing startup. Don’t only think about ways to help your users make money. Think of ways to help your users feel good about themselves while making money.

This is the Secret to Online Advertising. Give your users the tools to solve people’s pain. Give them bragging rights. Make them feel good about themselves, and the rest of the pieces will fall into place.