Understanding a North Star Metric : Measure what matters

Every product needs a North Star Metric and it is the key measure of success for the product team. The North Star Metric captures the core value of your product to the customers.

What is a North Star Metric ?

North Star Metric is the metric that captures the core value that the product delivers to the customer. It helps in measuring how successful the product is and evaluating other metrics from the product. The North Star Metric is derived from understanding the value your product provides to the customers.

How to find a North Star Metric for your product

The North Star Metric comprises of three components :

• Unit of Value : What are you measuring ?
• Quality : What type of value ?
• Frequency : Defining the timeframe

You must define what is truly essential to the product and business. A metric that provides revenue without giving the customers value will fail in the long run, As well as a product that gives value to the customer and doesn’t give revenue. A North Star Metric must

• Give customers value
• Generate revenue
• Measure progress

Examples of North Star Metrics

• Facebook: Daily Active Users
• Quora: Number of questions a user answers
• WhatsApp: Number of messages a user sends
• Airbnb: Number of nights booked

A North Star Metric should be a leading indicator of product growth and serves as a leading indicator that acts as a connective tissue between the product and broader business.

As Product Managers, we need to understand the relationship between the North Star metric and other quality metrics.

Thank you for coming this far and feel free to reach out if you’d like to have conversations around products or for partnerships.

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