[askldfhjkasfhd]

I think of it like a rough heuristic. It's a coarse-grained, single metric, but it does have some meaning if you don't use it as the end-all, be-all.

Replying to your comment made me wonder: what would a better metric be? The requirements are that it has to be numeric, a single number, and represent the "success" of any company, in all lifecycles (before fit, growth, mature, yellowpages, etc.)

[blowski]

If Company A hires lots of juniors while Company B only hires seniors, Company A is going to need a lot more people to achieve the same level of 'success'. So using this as a 'rough heuristic' would suggest Company A is doing much better than Company B, even though their wage bills may be about the same. What's more, we know nothing about the performance of either company.

In another scenario, Company C has outsourced most of its operations work, while Company D does it in-house, so Company D has more employees. Again, this tells us nothing about performance.

What's wrong with using net income as a single number?