{"id":83095,"date":"2024-10-25T14:09:45","date_gmt":"2024-10-25T13:09:45","guid":{"rendered":"https:\/\/www.prodpad.com\/?post_type=pp_glossary&p=83095"},"modified":"2024-10-25T14:09:46","modified_gmt":"2024-10-25T13:09:46","slug":"north-star-metric","status":"publish","type":"pp_glossary","link":"https:\/\/www.prodpad.com\/glossary\/north-star-metric\/","title":{"rendered":"North Star Metric"},"content":{"rendered":"\n
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What is a North Star metric?<\/h2>\n\n\n\n

A North Star metric is the primary and most important measurement used by a company to track the success of their product and overall business. This North Star metric should guide your team’s efforts and decisions, helping everyone focus on what truly matters for growth and company success.

Your company’s North Star metric is the shining light that helps lead your efforts to get your product to where you want it to be. Just like for the three wise men, looking towards your North Star can stop you from getting lost in a desert wasteland of vanity metrics<\/a> and misleading data all while aligning your whole team to a single common goal. 

Whatever this metric is, it\u2019ll be a measurement that most clearly shows you how successful the business and product are. It\u2019s a single metric that demonstrates how well your users recognize the core value proposition<\/a> of your product and how that perception of value converts into revenue. 

Your North Star isn\u2019t any old metric, it\u2019s one that directly ties customer value to business growth. 

For a product team focused on product-led growth<\/a> business model the North Star is a key measurement of long-term success. It connects the dots between the problems you\u2019re solving for your customers and the revenue generated from doing so, helping you create a better product strategy<\/a>. If each star in the night sky is a metric or KPI that you can measure, your North Star should be the one that shines the brightest \ud83c\udf1f.<\/p>\n\n\n

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Dive deeper. In this glossary we cover:<\/h4>\n

Who invented the North Star metric?<\/strong><\/a>
\nWhat\u2019s the difference between a North Star metric and a KPI?<\/strong><\/a>
\nWhy is it important to have a North Star Metric?<\/strong><\/a>
\nWho is responsible for setting the North Star?<\/strong><\/a>
\nWho is responsible for achieving the North Star metric?<\/strong><\/a>
\nHow do I set a good North Star metric?<\/strong><\/a>
\nExample of a good North Star metric<\/strong><\/a>
\nHow do you measure your North Star metric?<\/a>
\nHow do you report on the progress of your North Star?<\/a><\/strong><\/p>\n<\/div>\n\n\n\n

Who invented the North Star metric? <\/h2>\n\n\n\n

Growth hacking expert and founder of Growth Hackers<\/a>, Sean Ellis, is credited for popularizing the North Star metric, developing it to help companies and business leaders scale quickly by honing in on a single, ultra-important metric. 

Essentially, he put the blinkers on to stop these companies from focusing on unnecessary metrics visible in their peripheral vision. Instead, the North Star metric was designed to help zero in on a single measurement that represented the core value being delivered to active users. This helped clients like Dropbox and Eventbrite win the \u2018Kentucky Derby\u2019 of product growth. 

The reasoning behind having a North Star metric makes a lot of sense. Businesses can often sink in a sea of data, tracking multiple metrics without a clear direction. By finding the one KPI that best demonstrates successful growth your teams can become more aligned around achieving that growth. This metric is the sonar that helps keep you on course through your voyage and anchors your growth strategies.<\/p>\n\n\n\n

What\u2019s the difference between a North Star Metric and a KPI?<\/h2>\n\n\n\n

Let’s clear up some often confused definitions, and really ram home the core differences that make a North Star metric unique. Both North Star metrics and KPIs can measure company success, but they serve different purposes.

Essentially a North Star metric is a KPI – a key performance indicator. But it is THE key performance indicator. The one KPI to rule them all. In that sense, your North Star metric is the leader of your KPIs, promoted above the rest as the most important metric in the organization.

The remaining KPIs are then there to support the efforts that will lead to the achievement of the overarching North Star metric. They are the backup singers behind the headlining megastar. <\/p>\n\n\n\n