Choosing Your North Star Metric

North Star Metric, as defined by Sean Ellis, is a core measurement of how much value added you are delivering to your target market.[4] Your North Star Metric (NSM) is not just any metric. If improved, it is the one metric that will have the greatest impact on your business. The criteria for selecting a good NSM are the following: Leads to revenue

North Star Metric, as defined by Sean Ellis, is a core measurement of how much value added you are delivering to your target market.[4] Your North Star Metric (NSM) is not just any metric. If improved, it is the one metric that will have the greatest impact on your business. The criteria for selecting a good NSM are the following: Leads to revenue

They determine that their North Star should be monthly revenue per shopper.

If your revenue is highly concentrated, as I learned at PayPal, the total number of customers matters less than the value of each customer. In that case, align the team around usage with a North Star (and pricing) that tracks usage. If your customers are all worth similar amounts, like users of a meditation app, small business accounting software,

North Star Metric, as defined by Sean Ellis, is a core measurement of how much value added you are delivering to your target market.[4] Your North Star Metric (NSM) is not just any metric.

in your first few years, the best advice is to pick one or two North Star metrics (that is, metrics to prioritize rather than trying to achieve everything) and dedicate most of your energy to growing those by 5–10% WoW. With growth like this, you’ll have investors knocking down your door in no time.

Some North Stars count active customers (e.g., daily, weekly or monthly active users), and others track the amount of activity (e.g., nights booked, repeat purchases, minutes of meditation, total storage used). This decision is important. It comes down to how concentrated your revenue is: Does most of your revenue come from a few huge customers, or