North Star Metric was invented in business to give companies a singular emphasis on a single target. Everyone should measure progress by whether or not they are progressing the organization using this metric instead of being distracted by day-to-day matters or individual projects.

1. North Star Metric - NSM
North Star Metric was invented in business to give companies a singular
emphasis on a single target. Everyone should measure progress by
whether or not they are progressing the organization using this metric
instead of being distracted by day-to-day matters or individual projects.
6 steps to discover your NSM
Presentation by - Archna Yadav
Get in touch - LinkedIn

2. Article and topics we’ll cover
What is a north star metric
Benefits of north star metric (NSM)
6 essential steps to choose your north star metric
7 examples of a good north star metric
How to implement the north star metric (NSM)
Let’s dive in!

3. What is a North Star Metric?
Companies use North Star Metric (NMS) as a focus for their growth. The North Star Metric came from Silicon Valley
companies with explosive growth. It helps teams to look beyond the surface-level growth and concentrate on
long-term customer and product growth.
A north star metric must have these three factors:
● Add Customer Value
● Measure Progress
● Drive Revenue

4. Benefits of a North Star Metric (NSM)
Let’s see how this metric helps growth hackers and makes sure that the company grows:
● Focused on One Goal: The entire company is focused on one goal. The numbers and tasks can be different for
each department, but the north star metric is the single aspect for everyone to focus.
● Simplified Strategy: It simplifies the overall company strategy into actions that everyone can understand,
remember, and execute.
● Enhanced Customer Value: Adding value to the customer is one of the crucial factors in NSM. As a result, it
improves customer engagement and customer experience.

6. 6 essential steps to choose your NSM
1. Close to the customer’s success moments: A good NSM is always close to the moment when the customer
gets the intended result from your product. For Airbnb, the NSM is the number of nights booked, close to the
ease of trip booking or booking facility in general (customer’s intended result moment).
2. Adds value to your customers: The NSM should not be just for the company profit; it should add value to your
customers. For example, if your NSM is the number of orders made, it means you are not focusing on the
quality of service. Hence, the number of orders delivered without complaints would be a better NSM.
3. Measurable: Continuing with the above example, you cannot measure ‘satisfaction’ in general. Thus, you will
have to figure out a way to measure quality. Reduced number of complaints against X orders or the number of
orders delivered before the anticipated time can be considered measurable NSM.
A good north star metric must indicate future success, and every product should have a north star metric. While
the other key metrics like monthly revenue gives you an insight into what happened in the past rather than
predicting future revenue.

7. 6 essential steps to choose your NSM
4. Time-bound: You NSM should be measurable based on a certain period, which can be an hour, day, week, or
month to help you in clearly seeing the growth over time. For example, the number of orders delivered without
complaints in a week metric helps compare against the previous weeks’ data.
5. Not influenced by external factors: You NSM should only be influenced by your customers and no other
external factors. For example, in the tourism industry, the weather, flight delays, or the local people act as
external factors. Thus, the number of 5-star ratings per month is not a good NSM for the tourism industry.
6. Reflect your growth: Your NSM should be directly proportional to your business growth i.e. if the NSM is
increasing (positive), your business should grow too, there cannot be an excuse for that. For example, if the
product or service is related to the reports generation and download. In this case, the NSM should be the
number of reports downloaded by unique customers instead of the total downloads.

8. 7 good examples of North Star Metric
● LinkedIn’s initial NSM was the number of endorsements given because it was a relationship-building factor
between the users. But LinkedIn soon realized that endorsements were falsified and they changed their NSM to
monthly active users (MAU).
● Spotify’s NSM is the time spent listening on the platform. This NSM measures the value that customers get
from the platform.
● Hubspot is a CRM and its NSM is the number of weekly active teams. It captures the new accounts that are
getting value and providing a signal of future trial conversion and subscription revenue. Hence this metric
indicates or predicts the future revenue.
● Airbnb has the number of nights booked as their NSM because it perfectly combines the booker’s and owner’s
value.

9. 7 good examples of North Star Metric
● Intercom is a messaging platform with the vision to build a suite of products that makes easy communication
with the users of your business. It offers services for both B2B and B2C segments. Their NSM is the number of
customer interactions.
● Slack helps in-office collaboration with the mission to keep teams organized and its NSM is messages sent
within the organization.
● Quora north star metric is the number of questions answered, which is aligned with their mission of being a
knowledge-sharing platform.

10. How to implement NSM?
When you are all set with NSM, the next course of
action is its execution within the company.Every
department of the company should have their goals
that are aligned with your North Star Metric.
So that every department, every team, and every
contributor chase their metric, resulting in NSM
growth. And then, the requirement is to set up a
fertile ground for NSM to grow i.e. nurturing NSM
with the right infrastructure and culture.
Your company will also need to set up the right
analytics tools to measure the NSM progress.
What are you waiting for? Do the exercise to lock
your NSM and then see the wonders! Also, feel free
to load comment sections with your questions and
feedback, I will be happy to address them.

11. Thank You!
Looking for information about North Star Metric?
Add your questions in the comments below and I will address them. You can also drop me a
message on LinkedIn.