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north-star-metric

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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

Source

git clone https://github.com/phuryn/pm-skills/blob/main/pm-marketing-growth/skills/north-star-metric/SKILL.mdView on GitHub

Overview

The North Star Metric (NSM) is a single, customer-centric KPI that signals the value customers get from your product and acts as a leading indicator of long-term success. It is supported by 3-5 input metrics forming a metrics constellation, and the framework classifies your business game (Attention, Transaction, Productivity) while validating the NSM against seven effectiveness criteria.

How This Skill Works

First classify the business game (Attention, Transaction, or Productivity). Next identify a single NSM that is easy to understand, customer-centric, sustainable, vision-aligned, quantitative, actionable, and a leading indicator. Then define 3-5 practical input metrics that directly influence the NSM and are easier to move in the short term, establishing data sources and dashboards to track progress.

When to Use It

  • When defining your company's key metric framework
  • When setting up a metrics tracking system
  • When deciding what to measure and optimize for
  • When evaluating potential North Star Metric candidates
  • When aligning teams around a shared metric and inputs

Quick Start

  1. Step 1: Classify the business game (Attention, Transaction, or Productivity) for the company
  2. Step 2: Identify a single NSM that meets all seven criteria and clearly reflects customer value
  3. Step 3: Define 3-5 input metrics that directly influence the NSM and establish data sources and dashboards for ongoing tracking

Best Practices

  • Classify the business game (Attention, Transaction, Productivity) before selecting the NSM
  • Pick a single customer-centric NSM that clearly reflects delivered value
  • Validate the NSM against the seven criteria: easy to understand, customer-centric, sustainable value, vision alignment, quantitative, actionable, and leading indicator
  • Define 3-5 input metrics (leading indicators) that are easier to move and directly influence the NSM
  • Align teams with governance, dashboards, and cadence to act on NSM and input metrics

Example Use Cases

  • Attention-focused platform: NSM could be average minutes spent per active user per day to reflect engagement and value delivery
  • Transaction-focused marketplace: NSM could be purchases per active user per month as a leading indicator of platform value
  • Productivity tool: NSM could be tasks completed per user per week, linking user activity to outcomes
  • Social/content platform: NSM could be engaged sessions per user per week to measure ongoing value delivery
  • Collaboration/creator tool: NSM could be projects delivered per user per month as a measure of productive outcomes

Frequently Asked Questions

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