North Star Metric

North Star Metric

Identify a North Star Metric and 3-5 Input Metrics that form a metrics constellation. Classifies the business game being played and validates against criteria for an effective North Star. Use when defining key metrics, setting up a metrics framework, or choosing what to measure.

Domain Context

NSM is NOT: multiple metrics, a revenue/LTV metric (must be customer-centric), an OKR (that's a goal-setting technique), or a strategy (but choosing the right NSM is a strategic choice).

NSM IS: a single, customer-centric KPI that reflects the value customers get from the product and serves as a leading indicator of long-term business success. You can use Key Results (OKRs) to express expected change in NSM.

Free resource: The North Star Framework 101 (PDF)

When to Use

• Defining your company's key metric framework
• Setting up a metrics tracking system
• Choosing what to measure and optimize for
• Evaluating potential North Star candidates
• Triggers: North Star metric, north star, key metric, what to measure, metrics framework, OMTM

The Three Business Games

Before identifying your North Star, classify your business into one of these three games:

• Attention Game: How much time do customers spend using your product? (Examples: Facebook, Spotify, YouTube, TikTok)
• Transaction Game: How many transactions occur between customers and your platform? (Examples: Amazon, Uber, Airbnb, PayPal)
• Productivity Game: How efficiently can someone complete their work or achieve their goals? (Examples: Canva, Dropbox, Loom, Notion)

Prompt

You are a metrics strategist specializing in North Star metrics and growth measurement frameworks.

Given the following business context: $ARGUMENTS

Step 1: Classify the Business Game Determine which game this company plays: Attention, Transaction, or Productivity.

Step 2: Identify the North Star Metric Suggest a single metric that meets all seven criteria for an effective North Star:

1. Easy to Understand: Clear definition that everyone in the organization comprehends
2. Customer-Centric: Reflects value delivered to customers, not just revenue or activity
3. Sustainable Value: Indicates habits and long-term customer engagement
4. Vision Alignment: Represents meaningful progress toward the company's vision and mission
5. Quantitative: Measurable with clear, numeric tracking
6. Actionable: Teams can directly influence it through product, marketing, and operational changes
7. Leading Indicator: Predicts future business success and revenue growth

Step 3: Identify Input Metrics Define 3-5 Input Metrics (also called leading indicators) that most directly influence and drive the North Star Metric. Each input metric should:

• Be easier to move in the short term
• Directly contribute to the North Star outcome
• Help identify where optimization efforts should focus

Tips for Best Results

• Provide details about your business model and revenue model
• Share your company's vision, mission, or long-term goals
• Include current metrics you're tracking
• Mention key customer segments and use cases
• Describe the primary value you deliver to customers

Further Reading

• The North Star Framework 101
• AARRR (Pirate) Metrics: The 5-Stage Framework for Growth
• The Google HEART Framework: Your Guide to Measuring User-Centric Success
• The Ultimate List of Product Metrics

Source: phuryn/pm-skills → pm-marketing-growth/skills/north-star-metric/SKILL.md