Joshua Franklin Wiedeman

North Star Metric

A North Star Metric (NSM) is the one measure that best captures the value your product delivers to customers. It aligns every team, from engineering to marketing to customer success, on the same growth outcome. A good NSM makes decisions simpler and keeps teams from chasing vanity metrics.

How it works

A good NSM reflects both customer value and business value. Revenue is a lagging indicator. A good NSM is a leading indicator that predicts future revenue. Airbnb, for example, has used “nights booked,” which reflects both host supply and guest demand. Your teams must be able to move the metric through product and marketing work.

How to do it

  1. List every customer action that shows they got real value, such as finishing a project, inviting a teammate, or buying again.
  2. Check each one against your data. Drop any you cannot measure reliably every week.
  3. For each candidate, check how well it predicts 90-day retention or 12-month revenue across cohorts. The strongest predictor is your lead candidate.
  4. Ask whether a team could raise the number without helping customers. If yes, add a guardrail metric, for example pair “messages sent” with “messages that got a reply.”
  5. Put the NSM on a dashboard the whole company can see. Set a quarterly target. Break it into input metrics that each team owns: acquisition, activation, frequency, monetization.

What to measure

  • NSM growth rate: week-over-week percentage change in the NSM.
  • Input contribution: the change in each input metric (new users, activation rate, frequency) over the period, set against the change in the NSM.
  • NSM-to-revenue correlation: correlation between the NSM and revenue over rolling six-month windows.

Best practices

  • Review the NSM once a year, or when the business model changes (for example, moving from one-off sales to subscriptions).
  • Pair the NSM with two or three guardrail metrics. A music app tracking listening time might also track how many different artists people play, so it does not reward one song on repeat.
  • Build a metric tree so each team owns a sub-metric. Marketing might own qualified signups, product might own activation rate, and growth might own weekly active usage.

Common pitfalls

  • Using revenue as the NSM. Revenue lags. By the time it drops, the cause has been building for months. Pick the behavior that drives revenue.
  • Choosing a metric only one team can move. If only engineering can move it, everyone else disengages.
  • Changing the NSM every time growth stalls. A plateau usually means the inputs need work, not the metric. Frequent changes erode trust in the numbers.