North Star Metric
The North Star Metric is the single key metric that best captures the core value a product delivers to its customers. It serves as a long-term compass for all teams, ensuring that strategic decisions and OKRs are oriented toward sustainable, long-term growth.
What is a North Star Metric?
The North Star Metric (NSM) is the one metric that best describes the core value a product delivers to its users. Unlike KPIs, which measure various business areas, the North Star Metric focuses on the central value-creation moment – the moment when customers experience the greatest benefit.
Why a North Star Metric?
- Focus: A single metric creates clarity and prevents teams from optimizing in different directions
- [Alignment](/en/glossar/alignment): All teams can orient their work around a shared compass
- Long-term thinking: The NSM prevents short-term optimization on vanity metrics
- Customer centricity: It forces you to put customer value at the center
Examples of North Star Metrics
| Company | North Star Metric | Why |
|---|---|---|
| Spotify | Time spent listening per user | Measures core value: enjoying music |
| Airbnb | Nights booked | Measures core value: travel experience |
| Slack | Messages sent per team | Measures core value: team communication |
| Northly | Weekly active OKR users | Measures core value: OKR engagement |
North Star Metric vs. KPI
- The North Star Metric is exactly ONE metric representing overall success
- [KPIs](/en/glossar/kpi) are multiple metrics for various areas (revenue, retention, performance)
- [Health Metrics](/en/glossar/health-metric) monitor that NSM growth doesn’t come at the expense of other areas
Criteria for a Good North Star Metric
- Value representation: It measures the core value for the customer, not just revenue
- Leading indicator: It signals future business success
- Influenceable: Teams can positively impact it through their work
- Understandable: Everyone in the company understands it immediately
- Measurable: It is quantitative and can be tracked regularly
North Star Metric and OKRs
The North Star Metric and OKRs complement each other ideally: the NSM sets the long-term direction, while OKRs define the quarterly steps to improve the NSM. Every team OKR should have a traceable contribution to the North Star Metric.
Tracking the North Star Metric with Northly
Northly lets you define a North Star Metric as an overarching compass and align all team OKRs to it. The dashboard visualizes how OKR progress contributes to the NSM’s development.
Related Terms
KPI (Key Performance Indicator)
A KPI (Key Performance Indicator) is an ongoing metric that monitors the health and performance of a business process. Unlike OKRs, KPIs measure the status quo and keep running operations in view, rather than driving targeted change.
OKR (Objectives and Key Results)
OKR stands for Objectives and Key Results – an agile goal-setting framework that helps organizations define ambitious goals and track measurable outcomes. Developed in the 1970s at Intel by Andy Grove and later popularized worldwide by Google.
Health Metric
A Health Metric is a metric monitored alongside OKRs to ensure that pursuing ambitious goals doesn't negatively impact critical business functions. It serves as a guardrail for OKR execution.
Frequently Asked Questions
What is a North Star Metric?
The North Star Metric is the single key metric that captures the core value of a product or company for its customers. It serves as an overarching compass and helps all teams work in the same direction. Example: For Spotify, it’s listening time per user.
How do I find the right North Star Metric?
Ask yourself: "What moment represents the greatest value for our customers?" The NSM should measure core value (not revenue), be a leading indicator for growth, be influenceable by teams, and be understandable to everyone.
Can the North Star Metric change?
Yes, but rarely. The NSM should remain stable for years. A change makes sense during fundamental strategy shifts or when the company matures and the core value shifts. Frequent changes indicate that the NSM was not well chosen.
What is the difference between a North Star Metric and a KPI?
The North Star Metric is ONE overarching metric that measures overall success from the customer’s perspective. KPIs are multiple metrics for different business areas (revenue, churn, NPS). The NSM is the compass, KPIs are the instruments.