Choosing Your North Star Metric

Type of company: Freemium team-based B2B products; Most common North Star Metric: Engagement and/or customer growth

Broadly, there are six categories of North Star Metrics: 1) Revenue (e.g. ARR, GMV) 2) Customer growth (e.g. paid users, marketshare) 3) Consumption growth (e.g. messages sent, nights booked) 4) Engagement growth (e.g. MAU, DAU) 5) Growth efficiency (e.g. LTV/CAC, margins) 6) User experience (e.g. NPS)

Type of company: Marketplaces and platforms; Most common North Star Metric: Consumption growth

Type of company: UGC subscription-based products; Most common North Star Metric: Consumption

Type of company: Products that differentiate on experience; Most common North Star Metric: User experience

Type of company: Paid-growth driven businesses; Most common North Star Metric: Growth efficiency

Type of company: Ad-driven businesses; Most common North Star Metric: Engagement

Type of company: Consumer subscription products; Most common North Star Metric: Engagement or customer growth