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Strategic Communications Advisory For Visionary Founders
Actionable
Takeaways
Single-item questionnaires violate measurement principles:
Denny's background in psychometrics immediately flagged NPS as unreliable. One-item measures lack the redundancy needed for reliability, and the methodology of throwing out middle responses (7s and 8s) then subtracting detractors from promoters is statistically nonsensical. At a previous company with thousands of data points, he observed NPS scores drop and rise based solely on how the survey rendered on the page—no business changes, just UI differences. When presentation affects your metric independent of the underlying construct, your instrument is broken. Founders with technical backgrounds should trust their instincts when measurement methodology feels scientifically unsound.
Compensation drives behavior more than metric accuracy:
Portnox structures customer success compensation as 50% gross revenue retention and 50% net revenue retention. These are determined by finance and can't be manipulated. Denny had to rein in his CS team when they became overly focused on time-to-value because any number you give a team becomes their obsession. With NPS, teams game survey timing, cherry-pick recipients, and optimize for score rather than outcome. This is the Heisenberg principle applied to business: measuring changes the behavior. Choose metrics where gaming the number aligns with improving actual business outcomes.
Investors evaluate retention rates, not satisfaction surveys:
When Denny presents gross retention above 90%, investors don't ask about NPS. Renewal behavior reveals actual satisfaction—customers voting with budget rather than survey responses. The test for any metric: "What are we doing differently if this number is up versus down?" If it doesn't drive distinct actions or reveal information not already visible in financials, eliminate it. NPS often becomes a number that exists because "we've always measured it," inherited from previous leadership without questioning its utility.
Question inherited practices ruthlessly:
NPS gained adoption through Harvard Business Review credibility in 2003 and consulting firms building practices around it. The promise of "one number you need" appeals to executives wanting simple solutions. But herd behavior—"everyone else measures it"—perpetuates bad methodology. Denny's advice to founders stuck with NPS: give your team something else to focus on (gross retention is straightforward: don't let customers churn), then stop doing it. Sometimes you need to point to external validation to break internal momentum. The question isn't whether NPS correlates somewhat with growth—it's whether better alternatives exist that can't be gamed.
Conversation
Highlights
Why Net Promoter Score Is Fundamentally Broken: A Cognitive Scientist’s Case Against Silicon Valley’s Favorite Metric
Your board wants to see the number. Your customer success platform automatically sends the survey. Every SaaS company you know tracks it religiously. But what if Net Promoter Score is not just imperfect—what if it’s actively misleading your organization?
In a recent episode of BUILDERS, Denny LeCompte, CEO at Portnox, made a case against NPS that’s different from the typical criticism. His argument doesn’t come from anecdotal frustration—it comes from psychometric science. Before leading Portnox through 8x growth over four years, Denny was a cognitive scientist who ran experiments and taught psychometrics at the university level. He knows how to measure human behavior correctly, and NPS violates fundamental principles.
The UI Experiment That Broke the Illusion
At a consumer business where Denny worked previously, they had thousands of NPS responses—enough data to be statistically significant. The team made a change to how the survey rendered on the page. Nothing about the business changed. No product improvements, no service updates, no pricing adjustments.
The NPS score dropped.
They reverted the UI back to the original design. The score returned to its previous level.
“If this were measuring something real, that should not matter,” Denny explains. “But it’s just too sensitive to things that don’t matter.”
This is measurement failure. When survey presentation affects your metric independent of the underlying construct you’re trying to measure, your instrument lacks construct validity. It’s picking up noise instead of signal.
Single-Item Measures and Statistical Nonsense
The methodology problems start immediately. “One item questionnaires are notoriously unreliable,” Denny notes. In psychometrics, reliable measurement requires redundancy—multiple questions approaching the same construct from different angles to filter out random variation.
But the calculation itself is worse. NPS uses a 0-10 scale, then: throws out the 7s and 8s, takes the percentage of 9-10 responses, subtracts the percentage of 0-6 responses, and calls this your score.
“I’ve never seen a scale that any psychologist would put together that works like that,” Denny says. “It’s just kind of bonkers, the subtraction. You’re throwing data away.”
This isn’t methodological nitpicking. By discarding the middle distribution and using subtraction rather than averaging, you amplify noise and reduce signal. The resulting number is less informative than a simple mean would be.
Why Teams Game the Metric
Even if NPS were statistically sound, it fails because of how humans respond to measurement. At Portnox, Denny observed this with a different metric: time to value. “We told our customer success team drive time to value down. We had to actually rein them in because they became so maniacally focused on it.”
Teams don’t improve underlying outcomes—they optimize the number. With NPS, this manifests predictably: timing surveys right after positive interactions, selectively choosing which customers receive surveys, manipulating context to boost scores.
“You start to think about who you’re going to give that survey to, just trying to give it at the right time to maximize the score,” Denny explains. “And like, well, then what is it telling you? It’s not telling you anything anymore.”
This is the observer effect applied to business metrics. “When you start to measure humans, they will change that measure,” Denny notes. “It’s almost like an Heisenberg kind of principle at work with any of these things.”
The question becomes: which metrics align gaming behavior with actual business value?
What Investors Actually Care About
At a previous startup, Denny watched the board obsess over NPS scores. They compared numbers to competitors and demanded improvements. Meanwhile, gross revenue retention—whether customers actually renewed—wasn’t strong.
“If we had NPS up, but net revenue retention stayed down, that’s still not a great business,” Denny points out.
This led to his approach at Portnox: the customer success team tracks exactly two metrics. Gross revenue retention (measuring churn) and net revenue retention (measuring expansion). Both are calculated by finance based on actual revenue. They can’t be gamed.
“If I go to any investor and I say I’ve got gross retention and it’s less than 90, they’re not super happy, but ours is in the 90s,” Denny explains. “And so they don’t really care what my NPS score is. They’re like, clearly, the customers stick with you.”
Compensation reflects this. The CS team’s bonuses are split 50/50: half tied to gross revenue retention, half to net revenue retention. The mandate is simple. “Don’t let people churn,” Denny summarizes. “If they don’t churn, then they’re happy with you.”
Customers vote with budget, not survey responses. Renewal behavior reveals actual satisfaction.
The Harvard Business Review Effect
NPS persists because of its origin story. Published in Harvard Business Review in 2003, it promised “the one number you need.” Consulting firms built entire practices around it. The simplicity was seductive.
Then herd behavior took over. “There’s some herd behavior like, well, everybody else is doing it. Why are we not doing it?” Denny observes. Most executives don’t have psychometrics training. When you face pressure and everyone else measures something, you measure it too.
The promise of one question solving all your customer insight needs appeals to executives who want simple solutions. But measuring complex human behavior is never that simple.
The Better Alternative
Denny’s test for any metric: “What are we doing different for this number if it’s up versus if it’s down?”
If it doesn’t drive distinct actions or reveal information not already in your financials, it’s consuming resources without providing value.
When Denny started at Portnox, people wanted to implement NPS. He refused. His team worried that gross and net revenue retention were too complicated or only available quarterly. But once he explained that finance handles calculations and the team just needs to prevent churn and drive expansion, they understood. The metrics made intuitive sense.
For founders inheriting NPS from previous leadership, his advice is direct: “Sometimes somebody made a decision, I don’t know, years ago and whoever’s there now sort of inherited it and you can’t stop doing it. But, you know, maybe point to my article, say, see this whole thing is BS, and then stop doing it.”
Give your team something else to focus on first. You can’t leave a vacuum. But gross revenue retention provides that alternative: an ungameable metric that directly correlates with business health.
The Measurement Principle
The NPS story reveals how businesses adopt flawed practices. A methodology gets published in a prestigious outlet. Consultants promote it. Herd behavior takes over. Suddenly an entire industry measures something poorly correlated with actual outcomes.
“It’s not completely uncorrelated with growth,” Denny concedes. “It’s just not very well correlated with growth. And there are other measures that are better correlated with growth.”
For technical founders—the people who understand statistical significance and measurement validity—Denny’s message is simple: trust your instincts about methodology. If something feels scientifically unsound, it probably is.
The alternative isn’t complicated: measure what matters, make it ungameable, focus on actual business outcomes. “You’re better off on kind of ungameable. Like, net gross retention is. You can’t game it,” Denny says.
Revenue doesn’t lie. Customers either renew or they don’t. They either expand or they don’t. The accountants add up what customers paid last year versus this year. That’s real data.
Everything else is just noise in the system.
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