North Star Metric
The concept was popularized by Sean Ellis (GrowthHackers). It answers the question: "If we could measure only one thing, what would measure our product's real success for our users?"
Characteristics of a Good NSM
- It measures value for the user, not for the business: revenue is not a good NSM because it is a consequence of value, not value itself.
- It predicts growth: when it rises, the business grows in the long term. This causal relationship must be explicit.
- It is actionable: the team can make product decisions that affect it.
- It is understandable: anyone on the team should be able to explain what it measures and why it matters.
Examples
| Company | North Star Metric | Rationale |
|---|---|---|
| Spotify | Weekly listening time | More listening = more value = retention = revenue |
| Airbnb | Nights booked | Every night delivers value to both guest and host |
| Slack | Messages sent per active user | More messages = more embedded in the workflow = lower churn |
NSM and OKR
The North Star Metric operates at a higher level than the team's OKRs: it is the long-term destination that quarterly OKRs gradually move toward. The Key Results for a quarter should connect to levers that influence the NSM.
Common mistake
Choosing revenue or the number of registered users as the North Star Metric. These are business outcome metrics or vanity metrics, not measures of value for the user. "Registered users" can only go up and doesn't reflect whether the product is useful. An NSM focused on user behavior (time spent using the product, completed actions) is more robust and more actionable.
See also
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