Quite a number of startups have launched products without any clear product strategy framework. It is quite worrisome because, in the long run, they discover that they can’t clearly tell – what worked, what didn’t work, and what to improve one. They just continue to go round in circles.

For any product to be successful in any market there has to be a clear product strategy framework that clearly states the North Star metrics that will be used to measure the overall performance of your product in the market and your product team.

Guess you are asking -What is a North Star metric and why does it matter to my startup?

A north star metric is the key measure of success for the product team in a company. It defines the relationship between the customer problems that the product team is trying to solve and the revenue that the business aims to generate by doing so.


In many companies, product teams are measured by how the product is performing in the market, not by the overall impact they have on the business, which is not the best. A product team that is not impact-conscious can’t shape the destiny of a business. Without a north star, you can’t have a solid product-led company.

Categories of North Star Metrics

1. Revenue: The amount of money being generated

2. Customer growth: The number of users who are paying

3. Consumption growth: The intensity of usage of your product, beyond simply visiting your site

4. Engagement growth: The number of users who are simply active in your product

5. Growth efficiency: The efficiency at which you spend vs. make money

6. User experience: The measure of how enjoyable and easy to use customers find the product experience, overall

These categories extensively showcase the key elements organizations use to define their North star metric. The 2 critical parts of a North star metric are:

1. A clear statement of your product vision and

2. a metric that serves as a key measure of your current product strategy

Why North Star Metrics is Important to Every Startup (Especially Those that Have Just Launched)

A critical aspect of this metric is that it should be a leading indicator of future success. Your north star metric must be derived from a clear understanding of what action boost realized value to the customer. You need to get as close to impact as much as you can. This invariably means that “Daily Active Users” or “Registered Users” are not the best key performance indicators. They don’t project a true picture of what your customers value the most about your product. This also deprives you of a huge opportunity to provide clarity to your team.

When a product team fails to connect customer value directly to their north star metric, they risk driving their business down the wrong road.


Some of the major reasons why every startup needs product North star metric:

1. North star metrics get everyone in a company focused on one goal

2. It defines the relationship between the customer problems that the product team is trying to solve

3. Also, it helps them track revenue that the business aims to generate

4. It gives your startup clarity and alignment on what the product team needs to be optimizing for and what can be traded off.

5. It communicates the product  impact and progress to the rest of the company

6. It holds the product accountable for an outcome.

How a North Star metric works

Usually, a North Star metric is broken down into smaller metrics that drive accountability and ownership at the individual level. Many of these sub-metrics are team-specific and actionable, so individual contributors can draw a clear connection between their daily duties and the North Star. Take, for example, a logistics startup with the North Star metric “the number of rides daily. ”The marketing manager at that company could contribute to that parent goal by giving a discount on rides within specific locations, whereas the app developer would contribute by reducing app load time. Both contribute, but in their own way. North Star metrics must also reflect the customer journey, and measure against successful user journey. In the case of the logistics company, measuring rides booked indicates that buyers have completed their journey, and improving pieces of the journey-discovery, ease of using the app, finding a driver, and getting to a destination safely- keep customers happy and drive more revenue.

Good Examples of North Star metrics


1. Number of weekly customers completing their first order

2. Value of daily purchases


1. Number of trial accounts with over 3 users in their first week

2. Monthly-recurring revenue (MRR)


1. Total assets under management

2. Number of daily active users

How to find your North Star metric For your Startup

To find their North Star metric, companies must decide what is truly essential to the business. For many teams, it’s making customers happy and generating profit. A metric that simply makes money without satisfying customers will fail in the long run, so will a company that satisfies customers without being profitable. And a metric that doesn’t measure progress in a way that allows teams to act on its insights and change their behaviors isn’t useful. A North Star metric must reflect all three factors, tailored to each business. To find your North Star metric:

1. Ask, what is essential to the business functioning?

2. Ask, what key performance indicators can be used to measure

3. Ask, what metric encapsulates all the above?

4. Build a metric hierarchy, with the North Star metric on top of the pyramid

Like a seed, North Star metrics need fertile ground to grow. It can be an effective strategy for aligning all teams around a singular goal, provided they’re not taken too literally, are supported by a flexible culture, and measured with analytics tools that help teams tell whether it’s still guiding the way.

If you’re a founder with an amazing tech idea you strongly believe will succeed, get in touch with us today…