Regression to the Mean

Definitions

1. The statistical tendency for unusually extreme results to move closer to average over time rather than persist indefinitely. In startup metrics and hiring, forgetting regression to the mean can lead teams to overreact to outliers.

   In plain English: The tendency for extreme results to move back toward normal over time.

   Example: "The campaign spike looked amazing, but some of it was just regression to the mean after an unusually weak prior month."

Related Terms

• Customer Health Score
• Gross Merchandise Volume
• Monthly Recurring Revenue
• Annual Recurring Revenue
• ARR Growth Rate
• Basis Point
• Net MRR
• Rule of 40