Quick Answer (TL;DR)
A North Star Metric (NSM) is the single metric that best captures the core value your product delivers to customers. It serves as the focal point for your entire organization, aligning every team around a shared definition of success. Great North Star Metrics are leading indicators of revenue, reflect customer value, and are measurable and actionable. Examples include Spotify's time spent listening, Airbnb's nights booked, Slack's messages sent within an organization, and Facebook's daily active users. This guide walks you through how to identify yours, what input metrics to pair with it, and the mistakes that derail most teams.
What Is a North Star Metric?
A North Star Metric is the one metric that most accurately reflects the value your product creates for your customers. It is not a revenue metric, although it should be a leading indicator of revenue. It is not a vanity metric. It captures the moment when a customer gets what they came for.
The concept was popularized by Sean Ellis and the growth hacking community, but it has been adopted by companies of every size and stage because it solves a fundamental organizational problem: alignment.
When every team --- engineering, marketing, sales, support, design --- optimizes for the same outcome, decisions become clearer, conflicts decrease, and the product improves faster. Without a North Star, teams optimize locally, often at the expense of the whole.
"A North Star Metric is the single metric that best predicts a company's long-term success." --- Sean Ellis
What a North Star Metric Is Not
Characteristics of a Great North Star Metric
Not all metrics qualify as a North Star. A strong NSM passes all six of these tests:
1. It Reflects Customer Value
The metric should increase when customers get more value from your product. If your NSM goes up but customers are not happier, you have the wrong metric.
Test: Can you explain to a customer why this metric matters to them?
2. It Is a Leading Indicator of Revenue
Your NSM should correlate strongly with revenue growth. If customers are getting value (as measured by your NSM), revenue should follow.
Test: If this metric doubles over the next year, would revenue also grow significantly?
3. It Is Measurable
You must be able to track this metric reliably with your existing (or realistically obtainable) instrumentation.
Test: Can you produce this number from your data today?
4. It Is Actionable
Teams across the organization should be able to influence this metric through their work. If no one can move the needle, it is useless.
Test: Can you identify at least three initiatives that would improve this metric?
5. It Is Understandable
Everyone in the company --- from the CEO to a new hire --- should understand what this metric means and why it matters.
Test: Can you explain it in one sentence without jargon?
6. It Is Not Gameable (Easily)
If the metric can be artificially inflated without delivering real value, it will be. Choose a metric that is hard to game.
Test: Could a team make this number go up through manipulation rather than genuine improvement?
North Star Metric Examples from Top Companies
Studying how leading companies define their North Star provides powerful patterns. Here are detailed examples across industries:
| Company | North Star Metric | Why It Works |
|---|---|---|
| Spotify | Time spent listening | Directly measures music consumption value; correlates with retention and premium conversion |
| Airbnb | Nights booked | Captures value for both hosts (income) and guests (accommodation); directly tied to revenue |
| Slack | Messages sent within an organization | Measures team communication value; high messaging = embedded in workflows = retention |
| Daily active users (DAU) | Measures habitual engagement; DAU growth predicts ad revenue growth | |
| Netflix | Hours of content watched per subscriber | Measures entertainment value delivery; correlates with subscriber retention |
| Uber | Rides completed | Captures value for riders (transportation) and drivers (income); directly tied to revenue |
| HubSpot | Weekly active teams using 5+ features | Measures depth of adoption; multi-feature use = stickiness = retention |
| Dropbox | Number of files saved | Measures storage value; more files = more dependent = higher retention |
| Shopify | Gross Merchandise Volume (GMV) | Measures merchant success; when merchants sell more, Shopify succeeds |
| Amplitude | Weekly learning users (users who consume a chart/analysis) | Measures analytics value; if users learn from data, they stay |
| Figma | Weekly active editors | Measures design collaboration value; editing = creating = core value |
| Notion | Blocks created per team per week | Measures collaborative content creation; active creation = team dependency |
Deep Dive: Spotify
Spotify chose time spent listening rather than songs played because time captures depth of engagement. A user who listens to a three-minute pop song and a user who listens to a two-hour podcast are both getting value, but time spent distinguishes casual browsing from deep engagement. This metric is also:
Deep Dive: Airbnb
Airbnb's nights booked is elegant because it captures value for both sides of the marketplace. A booked night means a guest found a place they wanted, and a host earned income. It directly translates to revenue (Airbnb takes a percentage of each booking) while being a genuine measure of marketplace health. If nights booked is growing, the marketplace is healthy.
Deep Dive: Slack
Slack's messages sent within an organization measures whether teams are actually using Slack as their communication hub. A team sending thousands of messages per week is deeply embedded --- Slack has replaced email, meetings, and other tools. This creates extraordinary switching costs and predicts retention with high accuracy. Note that Slack measures messages within an organization, not total messages, because organizational adoption is what drives contract renewals.
How to Identify Your North Star Metric: A Step-by-Step Process
Step 1: Define Your Product's Core Value Proposition
Start by answering: What is the primary value your product delivers to users?
Write it as a simple statement:
Your NSM should directly measure the delivery of this value.
Step 2: Map the Value Exchange
Every product involves a value exchange. Identify both sides:
Your NSM should sit at the intersection --- where customer value drives business value.
Step 3: Identify Candidate Metrics
Generate a list of 5-10 metrics that could serve as your North Star. For each, evaluate:
| Criteria | Metric A | Metric B | Metric C |
|---|---|---|---|
| Reflects customer value? | Yes/No | Yes/No | Yes/No |
| Leading indicator of revenue? | Yes/No | Yes/No | Yes/No |
| Measurable today? | Yes/No | Yes/No | Yes/No |
| Actionable by multiple teams? | Yes/No | Yes/No | Yes/No |
| Understandable by everyone? | Yes/No | Yes/No | Yes/No |
| Hard to game? | Yes/No | Yes/No | Yes/No |
Step 4: Validate with Data
For your top 2-3 candidates, run a correlation analysis against:
The metric with the strongest correlations across all three is likely your best NSM.
Step 5: Stress Test with Scenarios
Ask yourself:
Step 6: Define Input Metrics
Your NSM does not stand alone. It is driven by input metrics --- the levers your teams can directly pull. Typically you will have 3-5 input metrics.
Example: Airbnb
North Star: Nights booked
Input metrics:
Each input metric is owned by a specific team and contributes to the North Star.
The North Star Metric Framework
The complete framework consists of three layers:
Layer 1: The North Star Metric
One metric that captures core value delivery. Reviewed by leadership weekly or monthly.
Layer 2: Input Metrics (3-5 metrics)
Leading indicators that drive the North Star. Each is owned by a team or squad. Reviewed weekly.
Layer 3: Team-Level Metrics
Specific metrics that individual teams track to improve their input metric. Reviewed daily or weekly.
┌─────────────┐
│ North Star │
│ Metric │
└──────┬──────┘
┌────────────┼────────────┐
┌────┴────┐ ┌────┴────┐ ┌────┴────┐
│ Input 1 │ │ Input 2 │ │ Input 3 │
└────┬────┘ └────┬────┘ └────┬────┘
┌─────┼─────┐ ... ┌─────┼─────┐
Team Team Team Team Team Team
Metric Metric Metric Metric Metric MetricThis hierarchy ensures that every team's daily work connects to the company's strategic outcome.
How to Operationalize Your North Star Metric
1. Make It Visible
Display your NSM prominently. Use dashboards on office screens, Slack bots that post daily updates, or weekly all-hands reviews. The metric should be impossible to ignore.
2. Set Targets
Define quarterly and annual targets for your NSM and each input metric. Use a combination of:
3. Connect to OKRs
Your company OKRs should map directly to your NSM and input metrics. Each team's objectives should include at least one input metric.
4. Build Feedback Loops
Establish a regular cadence for reviewing NSM performance:
5. Create a Metric Dictionary
Document your NSM and input metrics with:
Common Mistakes When Choosing a North Star Metric
Mistake 1: Choosing Revenue as Your North Star
Revenue is an output, not a measure of customer value. When you optimize directly for revenue, you risk:
Better approach: Choose a value-delivery metric that leads to revenue.
Mistake 2: Choosing a Metric That Only One Team Can Influence
If only the marketing team can move your NSM, it is not a North Star --- it is a marketing KPI. Your NSM should be influenced by product, engineering, marketing, sales, and customer success.
Mistake 3: Choosing a Metric That Is Too Broad
"Monthly active users" sounds like a good NSM, but it is so broad that it is hard to act on. What does "active" mean? Logging in? Performing a core action? Paying? Be specific.
Mistake 4: Never Revisiting Your North Star
Markets change. Products evolve. Customer needs shift. Your NSM should be reviewed at least annually. Spotify's NSM looked different when they were a music-only service versus a music-and-podcast platform.
Mistake 5: Having Multiple North Stars
The whole point of a North Star is singular focus. If you have three North Stars, you have zero. Resist the pressure from different departments to add their own metric to the top level.
Mistake 6: Confusing Correlation with Causation
Just because a metric correlates with retention does not mean improving it will improve retention. Validate your NSM hypothesis with experiments, not just analysis.
Mistake 7: Ignoring the Input Metrics
Defining a North Star without identifying the input metrics is like setting a destination without planning the route. The input metrics are where the actionable work happens.
North Star Metric by Company Type
Different business models naturally gravitate toward different types of North Star Metrics:
Marketplace (Airbnb, Uber, Etsy)
Pattern: Transaction volume
SaaS / B2B (Slack, HubSpot, Amplitude)
Pattern: Depth of usage
Consumer Subscription (Spotify, Netflix, Peloton)
Pattern: Consumption time or frequency
E-commerce (Shopify, Amazon)
Pattern: Gross Merchandise Volume or purchase frequency
Social / Content (Facebook, TikTok, Medium)
Pattern: Daily active users or content creation
Fintech (Stripe, Square, Robinhood)
Pattern: Transaction volume or assets under management
When to Change Your North Star Metric
Your NSM is not permanent. Consider changing it when:
When you do change your NSM, communicate the change clearly across the organization, explain the rationale, and give teams time to adjust their strategies and OKRs.
Tools and Resources
Analytics Platforms for Tracking Your NSM
Frameworks and Templates
Dashboard Tools
Putting It All Together
Finding your North Star Metric is not a one-afternoon exercise. It requires understanding your product's core value, validating with data, and building organizational buy-in. But the investment pays off dramatically. Teams stop arguing about priorities because the priorities are clear. Experiments have obvious success criteria. Leadership can track company health with a single number.
Start with the core value your product delivers. Find the metric that best captures that value. Validate it against retention and revenue data. Identify the input metrics your teams can influence. Then make the metric visible, set targets, and review regularly.
The best product organizations are not the ones with the most sophisticated metrics stacks. They are the ones where everyone --- from the intern to the CEO --- can tell you what the North Star is and how their work contributes to it.