Finding your North Star Metric
Broadly, there are six categories of North Star Metrics:
- Revenue (e.g. ARR, GMV):
- The amount of money being generated — the focus of ~50% of companies.
- Customer growth (e.g. paid users, marketshare):
- The number of users who are paying — the focus of ~35% of companies.
- Consumption growth (e.g. messages sent, nights booked):
- The intensity of usage of your product, beyond simply visiting your site — the focus of ~30% of companies.
- Engagement growth (e.g. MAU, DAU)
- The number of users who are simply active in your product — the focus of ~30% of companies.
- Growth efficiency (e.g. LTV/CAC, margins)
- The efficiency at which you spend vs. make money — the focus of ~10% of companies.
- User experience (e.g. NPS)
- The measure of how enjoyable and easy to use customers find the product experience, overall — the focus of ~10% of companies.
So what are the optimal North Star Metric(s) for startups? I surveyed current and past employees at over 40 of today’s most successful growth-stage companies to compile the table below; the findings provide a helpful framework for organizations seeking their own guiding metrics. [See original article for breakdown]
Most relevant during:
PMF phase
GTM Fit phase
Scale phase
Most relevant for:
ACVs < $15K
ACVs $15K-$50K
ACVs > $50K