The Mother Metric - North Star Metric!

In this age of startups, managing tons of metrics & KPIs is nearly impossible, organizations need that one single measure that really drives and keeps them focused. Allowing businesses to know whether their end customers value their product/services or if it's all going in vain.  




The North Star Metric also considered as "The Mother Metric" is one such metric that helps to clearly see the value of your offering and act accordingly to stabilize or improve your product strategy and endpoint engagements.

What is a North Star Metric?

The North Star Metric (NSM) is a powerful concept that has emerged in recent years from Silicon Valley companies with breakout growth. The North Star Metric is the single metric that best captures the core value that your product delivers to customers. Optimizing your efforts to grow this metric is key to driving sustainable growth across your full customer base - Sean Ellis, who also coined the term Growth Hacking for the Marketing World. 




AirBnB's NSM is "Nights Booked" rather than "number of devices app was installed". There's very minimal to no contribution to revenue if the app is installed until the end-user books a room. While "Nights Booked" captures value to both guests and the hosts.




Facebook's NSM is "Daily Active Users". With more user's on the FB platform the team is able to optimize everyone's feed to deliver more value to users.





To uncover your NSM you must understand the value your customers get from using your products. Then quantify this value in a single metric. You can derive to multiple NSM's but its better to filter down to ONE.


In his book "Good To Great" author Jim Collins talks about the Hedgehog Concept which advises you to focus on the intersection of the 3 circles (below). Transformations from good to great come about by a series of good decisions made consistently with a Hedgehog Concept, supremely well-executed, accumulating one upon another, over a long period of time.



The good-to-great companies understood that doing what you are good at will only make you good; focusing solely on what you can potentially do better than any other organization is the only path to greatness - Jim Collins


NSM can be divided into 2 factors for its derivation and understanding organization-wide. Keep in mind, NSM is not just another metric but a mindset that must resonate among all departments to make it a success.  Leaving it just for Marketing Teams to derive and practice would be of no use. 


  • Growth  - The growth factor indicates the impact you generate with your product & services. Your aim must be to maximize on this category.
  • Efficiency - The efficiency factor identifies the productivity per business unit. Aim here should be to stabilize the value which indicates a stability & market control.

Considering the examples above:
Facebook's NSM when divided into its 2 components remains,

  • Growth Metric     -> No. of User Minutes on FB
  • Efficiency Metric -> Revenue per User Minute

Google's NSM

  • Growth Metric     -> No. of Clicks per Ad
  • Efficiency Metric -> Profit per Ad Click

*If you have multiple products & offerings find the NSM of each separately.

So dear daring Entrepreneurs, its time to find your North Star Metric and understand where you stand. Once you find your guiding star, align efforts in improving and improvising the values. 
And yes, DONT SETTLE!