I really hate the phrase “North Star Metric.” It’s painfully corporate and irritatingly buzzwordy, but everyone understands what we’re talking about, so let’s lean into it. (Pause for breath). Among the endless constellation of vanity metrics and meaningless KPIs, the North Star Metric (NSM) does a pretty good job of cutting through the noise. It’s that single, painfully clear metric that sums up whether your customers genuinely care about your product and predicts if you’re doing the right things.

What Makes It Useful?

A real North Star Metric doesn’t just measure how effectively you’re extracting value from customers — it measures if customers actually get real value out of you. It should (at the very least) make your cross-functional meetings less chaotic, simplify your bloated decision-making processes, and keep your teams from sprinting in opposite directions by creating some shared clarity while revealing a measure of actual value.

Who seems to get this right:

Facebook: Daily Active Users (DAU)

They track many things: photo uploads, likes, shares, etc, but DAU is the NSM.

Why this actually works: It directly captures engagement — are people bothering to come back every day? If they do, the rest follows naturally: more interactions, more content, more ads. All of Facebook’s algorithm tweaks and feature enhancements revolve around this metric.

Spotify: Time Spent Listening

Spotify doesn’t obsess over subscriber totals or acquisition numbers (supposedly) — they went straight for Time Spent Listening.

Why this makes sense: Listening time directly indicates if people are genuinely enjoying Spotify or if they’re just there for the free trial. More listening means lower churn and higher ad impressions. It’s why Spotify’s algorithms keep offering you the same playlists until you surrender.

Airbnb: Nights Booked

Airbnb could’ve easily tracked app downloads or “engagement” as revealed by browsing dreamy listings, but they got straight to the point: Nights Booked.

Why it matters: Bookings equal transactions, and transactions equal actual revenue. It indicates real satisfaction, not just idle browsing. Everything Airbnb does, from tweaking search results to simplifying booking processes, boils down to getting more nights booked.

Consistent Traits of Effective North Star Metrics:

• Activity over Acquisition: They focus on what users actually do, not just user counts.
• Value Alignment: They genuinely reflect what customers value about your product.
• Continued Engagement: One-time clicks don’t count — great NSMs measure sustained behavior.
• Revenue Alignment: Clear ties to revenue generation without explicitly being financial metrics.
• Team Alignment: Everyone from sales to dev can understand the impact and get behind using it.

How to Find Yours:

Answer these questions with brutal honesty:

What does your product actually do for customers?

• What actual user problem do you solve?
• Why would a user come back?

What behavior represents your product’s “aha” moment?

• Time spent? Transactions? Creations? Figure it out.

What consistently predicts retention and growth?

• Which repeated behavior reveals long-term loyalty?
• What activity can you amplify to create sustainable growth?
• What’s the single metric you’d bet your business on?
• If improving one thing would make everything else fall into place, what is it?

Can your teams actually agree on this metric?

• Does this metric give your teams a common target? (determining this needn’t be a democratic exercise)

Reality-Checking Your Metric

Don’t get sentimental — put your potential North Star Metric through these checks:

• Actionable: Can your team meaningfully impact it?
• Simple: Could you explain it to your mother (or CEO)?
• Leading Indicator: Does it predict what’s going to happen, not just rehash the past?
• Customer-Centric: Is it genuinely valuable to customers, or is it just useful to you?
• Gaming-Resistant: Is it difficult to manipulate into meaninglessness?

You’ll Still Need Supporting Metrics

Yes, your North Star Metric is your guiding star, but it’s not all you need.

Support it with metrics that:

• Track the rest of the user journey
• Provide warning signs before things crash
• Ensure you don’t destroy your business optimizing the NSM

Final Thoughts

Your “North Star Metric” should be the distilled essence of your strategy. Embracing it should save you from chasing pointless KPIs into oblivion. Finding the right NSM demands introspection, honesty, and ruthless prioritization.

So, what’s the one metric that, if improved continuously, might actually be worth following. Got it? Congrats, you’ve just found your North Star Metric.