What is North Star Metric

Aadersh Tiwari
Sep 10, 2022
2 min read

The North Star Metric (NSM) is a metric that a company has to always focus on to be alive with growth. This number shows the amount of value that a company delivers to it’s customers. NSM sets path for long-term growth versus short-term growth.

Why North Star Metric is important

Product and it’s productization process should have mutual and strong relationship, to be always validated and with time. Right from Concierge MVP to MVP planning till and after the product launch we should focus on metrics and find our “NSM” so that we can create and capture an uncontested market space, thereby making the competition irrelevant.

Good NSM Examples

Don’t get confused with other metrics yes even with OMTM

North Star Metric (NSM) is the number on which your entire company focuses to achieve long-term growth during a period of several years to infinity.

One Metric That Matters (OMTM) is the number on which one team focuses to achieve rapid growth for a period of 2 to 6 months.

OMTM and other metrics are supportive to NSM. We can say OMTM is secondary focus to achieve NSM.

Let's get your NSM!

Customer's success moments are close to NSM. If we can point out and measure it, we got the NSM. Like for Uber user, success is to book and get journey completed. So keeping ride numbers consistent is NSM (Rides/Week).

Pirate metric/AARRR and every other funnel are directly proportional to NSM. So keeping focus on NSM means keeping focus on Awareness to Revenue. NSM is not revenue, it is the value your customer will get throughout lifespan of product and get retained.

NSM is timebound but in long-term. I'll suggest take it 1 year duration. Only condition is NSM should be under control. It should not deviate much with situations/market conditions and should be direct reflection of growth .

At the end, even if you are not able to decide your NSM quickly hold the breadth. It requires profound knowledge and time with customer journey to get it right. Keep learning with empathy! Wishing you all the best to get it soon.