A north star metric is the single number that best captures the core value your product delivers to customers. It aligns every team around one definition of success. Pick the metric that, if it grows, everything else in the business improves.
The Three Criteria
Your north star metric must pass three tests:
1. It reflects customer value delivered. Revenue is not a north star because it measures value captured, not value delivered. "Weekly active users who complete a workflow" is better because it measures actual product usage that correlates with the value customers get.
2. It is a leading indicator of revenue. The metric should predict future business success. If your north star grows, revenue should follow within 1-2 quarters. If the correlation does not exist, you picked the wrong metric.
3. Your product team can influence it. If the metric is primarily driven by sales or marketing, product cannot own it. Pick something that changes when you ship better features, improve onboarding, or fix friction points.
Use the North Star Finder to evaluate candidates against these criteria and select the best fit for your product type.
Examples by Business Model
SaaS/B2B: Weekly active teams completing core workflows. Not just logins. Active usage of the feature that delivers value.
Marketplace: Transactions completed per week. Both sides of the marketplace benefit when this grows.
Consumer subscription: Hours of content consumed per subscriber per week (Spotify, Netflix model).
E-commerce: Purchase frequency per customer per month.
Setting It Up
Step 1: List 5-8 candidate metrics. Pull from your analytics, not your imagination.
Step 2: Test correlation. Does each candidate correlate with retention? With revenue? With NPS? The metric with the strongest correlation across all three is your best candidate. The NPS Calculator can help you measure the satisfaction component.
Step 3: Decompose it into input metrics. Your north star should break down into 3-5 levers your teams can move independently. For "weekly active workflows completed," the inputs might be: new user activation rate, feature adoption rate, and return frequency.
Step 4: Set targets using the OKR Generator to translate your north star into quarterly objectives for each team.
Common Mistakes
Picking a vanity metric. "Total signups" only goes up. It does not tell you if the product is healthy. Pick an active metric that can go down.
Changing it too often. Your north star should stay stable for 12-18 months minimum. If you change it quarterly, teams cannot build momentum. The business model should dictate the metric, not the latest board meeting.
Ignoring counter-metrics. A north star without guardrails creates perverse incentives. If your north star is "messages sent," teams might optimize for notification spam. Set counter-metrics (unsubscribe rate, churn) that prevent gaming.