How to Set a Great North Star Metric

Summary

In this video, Kevin Way, a product manager, explains how to set a good North Star metric for your product. A North Star metric captures how users derive value from a product and helps teams prioritize work and align decisions. Kevin outlines three key traits of a good metric: it should express value, be measurable, and be actionable. He emphasizes the importance of a descriptive and inspiring name and clear definition. By tracking the right metrics, teams can better understand user behavior and drive meaningful actions, ultimately improving the product's success.

Takeaways

• 😀 A North Star Metric captures how users derive value from using a product and helps teams prioritize work and align decisions.
• 😀 A good North Star Metric serves as a leading indicator of the product’s success.
• 😀 Three traits of a good North Star Metric: it expresses value, is measurable, and is actionable.
• 😀 Metrics like user accounts or daily active users aren't ideal as they don't show how users get value from the product.
• 😀 A better North Star Metric focuses on actions or behaviors that users take, like sharing conversations or creating content.
• 😀 A good North Star Metric should be quantitatively tracked, so it’s easier to measure progress.
• 😀 The metric should be actionable, meaning the team should be able to directly influence it through their work.
• 😀 Vanity metrics like downloads or sign-ups are not good North Star Metrics, as they don't measure long-term success or user engagement.
• 😀 The name of the North Star Metric should be descriptive, punchy, and energizing for the team.
• 😀 When defining a North Star Metric, consider the product's current functionality and its potential future growth.
• 😀 A good North Star Metric has a clear definition, and it should inspire the team to focus on actions that contribute directly to user value.

Q & A

What is the purpose of a north star metric in product management?

A north star metric captures how users obtain value from a product, helping teams prioritize work and align on decisions. It acts as a leading indicator of the product's success.

What are the three traits of a good north star metric?

The three traits of a good north star metric are: it should express value, be measurable, and be actionable.

Why are simple counts like user accounts or daily active users not good north star metrics?

Simple counts like user accounts or daily active users don't tell you how users are getting value from the product. A good north star metric should reflect how users derive value from using the product.

How does a north star metric need to be measurable?

A north star metric should be quantitatively tracked. For example, metrics like the number of conversations being shared about a product can be tracked and used to gauge success.

What makes a north star metric actionable?

A north star metric is actionable if it can be directly influenced by the team. It should not be tied to broader market trends or external factors that the product team cannot control.

What is an example of a vanity metric, and why is it not a good north star metric?

An example of a vanity metric is the number of downloads or sign-ups. These metrics are often short-term indicators and don't directly measure how users are engaging with the product or if they are deriving value from it.

How should you name and define your north star metric?

The name of your north star metric should be descriptive and energizing, while the definition should be precise and clear, explaining how it will be quantitatively measured.

What should the description of your north star metric cover?

The description should cover both the product's current market performance and its potential future. It should balance where the product is now and where it wants to go.

How does amplitude define its north star metric, and what is its name?

Amplitude defines its north star metric as the number of active users who have shared a chart consumed by at least two others in the last seven days. This metric is called Weekly Learning Users (WLUs).

Why is it important to have a punchy name for your north star metric?

A punchy name helps inspire and energize the team. It serves as a memorable way to align efforts and track progress toward a clear, measurable goal.