todo How does this differ from mission statement and the like?todo How do you develop and disseminate one?
North Star Metric
A North Star metric “is a single critical rate, count, or ratio that represents your product strategy”1. The North Star metric and accompanying North Star Framework was created and popularized by John Cutler. The goal of the metric and framework is to accelerate decentralized decision making, team alignment, and focus on impact and product. The North star metric should connect your customer’s problems to business value/results. The metric should be leading indicator of business results. Others refer to the north star metric as the “one metric that matters u(OMTM)”2.
Counter argument
Casey Winters of Pintrest argued that OMTM can cause your team to fail to understand how different parts of the system interact, and obscures that for complex systems3.
Others argue that North Star metrics are to big to be actionable. They are output metrics, not input metrics, and so they need to walked back to input metrics that can be worked on. Output metrics are lagging indicators, so you have delayed effects2.
2
The health of the ecosystem can be understood by tracking the relationships between elements, not the elements in isolation.
North star metrics are myopic and only give you insight into a single dimension of your business2.North Star Metrics don’t account for the tradeoffs between metrics. E.g you can increase revenue per user by adding more ads but you may drive users away. If you are only focused on revenue per user you completely miss the churn2.
1. Cutler, J. & Schersclight, J. North Star Playbook. (Amplitude).
2. Balfour, B., Clowes, S. & Winters, C. Don’t Let Your North Star Metric Deceive You. Reforge (2018).
3. Winters, C. Don’t Become a Victim of One Key Metric. (2016).