Precise Maths, an educational mobile app, recently completed a Series A funding round. They are now looking to scale and expand into the Spanish market. The development team is working on a feature enabling users to book lessons with tutors. Meanwhile, the customer success team is improving documentation for a feature released a few months ago. This allows users to share their scores on social media. The weekly leadership sync has just ended. Tim, the CTO, is distracted. He can’t shake off the feeling that something feels off. At such an exciting time for the company, it's almost like the teams are not working in harmony. Are they at risk of losing focus?

Although both teams contribute to the product, their goals are not fully aligned. They are working towards their own set of priorities in silos, and they run the risk of moving in totally different directions. When multiple metrics are focused on, this can be further compounded, Tim knows from experience this could be catastrophic. The teams need aligning and refocusing. The company needs a North Star Metric to help them stay on track.

What is a North Star Metric?

Coined by Sean Ellis, the North Star Metric (NSM) is a single measure of a product’s value to its customers. It can act as an anchor aligning teams around a shared and common goal. The metric should be simple and focus on what the most loyal customers find the most valuable when interacting with the product. Overall, it should help a company measure its progress and provide a refined view of how well the company is doing. As such, the risk of misalignment is reduced, decision-making is improved, and sustainable growth is promoted. 

Why is a North Star Metric important?

A North Star Metric is important for a few reasons. Primarily, it will assist the entire company in remaining aligned around a single goal. The goal itself represents the core value that the product is attempting to deliver to its customers. When startups move quickly, teams can start moving to their own rhythms, each pursuing different interpretations of success. By knowing your North Star Metric, you can be sure that every employee is working towards the same point, promoting focus and collaboration and reducing silos.

How do I find the North Star Metric?

There are certain rules to put in place when you start to decide on what to use. The North Star Metric needs to be a single metric. It can change over time, but you need to keep it in place for a long time to perform an adequate evaluation. If you collate all your metrics, the North Star should be at the top-a bit like the star at the top of a Christmas tree! 

So how do you decide what to use? You will need to explore what is most critical to your business. Dig deeper than revenue-focused metrics and look for the why and what behind them. What is it that customers value the most about your product? What is the stand-out factor that makes them want to invest their time and money using it? Looking at things from this stance will enable you to explore what you need to achieve in order not just to bring in the revenue but to sustain it in the long term. You will definitely want to ensure you have the NSM clearly documented and easily accessible to everyone.

Examples of a North Star Metric

One approach you could take when looking to find your North Star Metric is to explore your top five or ten metrics. Slowly start to reduce these down to what you consider to be the most important two or three. At this point, you should begin to see some commonality, and you will find the most important one. Here are some examples:

  • Holiday Accommodation: The number of nights a customer books
  • Transport application: How many journeys a user undertakes
  • Online beauty store: How many purchases a user makes every month
  • Fitness application: How many users complete a workout every week 

Precise Maths: discovering their North Star

For Precise Maths, if the CTO discussed with the development team what they felt would be the most important metric they may state it needs to be how long the user is engaged with the application. The customer success team may wish to focus on the number of positive ratings the application has received. While these both address surface-level problems, they do not truly represent what keeps the customers returning to use the application or the heart of the product itself. As such, for Precise Maths, an example of the North Star Metric could be the number of lessons completed by the application users every month. If the company's main goal is to help users improve their maths the number of lessons completed should align with how much a user's maths skills are growing.

Why choose the number of lessons completed rather than how many lessons a user books? It is a much more valuable metric because it allows us to see a user's engagement with the product over time. This will encourage both teams to work together to maximise user engagement and retention.

With the teams now focused on the same goal, they have a new filter for all the new work that arises. Meetings will be far more valuable, and teams will be much more motivated. The development team can focus on prioritising features that make it easier for users to take and complete lessons. The customer success team can prioritise creating documentation and supporting users to take the lessons frequently. They can also explore how to help users understand the value of doing so. When the company starts to expand in Spain, growth and user satisfaction can be quickly measured.

Conclusion

As you start to break down your growth into how you deliver value to customers, it becomes easier for your team to see how they are or could contribute. This makes it much simpler to motivate them. Without a metric in place, things can become ambiguous and hazy. What makes your product unique, and what value do you bring to your customers? What actions do users take to gain the full value of your product? 

For Precision Maths, defining the North Star Metric could be a turning point in their growth strategy. By quieting the noise in the hectic startup or scaleup environments, they now have a metric that can be worked on by all the teams. So, what is your North Star? Discovering it can help you steer through the complexities of growth and scaling and ensure all your teams are working towards success. If you want help to find your North Star Metric, Smooth Sailing helps start-tups with design, product management and research.