Should Your Product Have a North Star Metric?

One Metric to Rule Them All?

Product “north star” metrics provide benefits in team alignment and product improvement. However, boiling down all stages of the user lifecycle to a single number also has the risks of lack of ownership, disempowerment, and metric “hacking”.

The concept of the product “North Star Metric” has seen a lot of buzz in the last few years. The concept means having a single metric that measures the success of the product and therefore also of a product team. Examples given of north star metrics include “nights booked” for AirBnB or daily active users (DAU) for Facebook.

Having a single metric for the entire team to rally around has obvious benefits: Firstly, it provides the ability to massively boost alignment, since everyone knows what is important. Secondly, according to management guru Peter Drucker’s famous quote “you can’t improve what you can’t measure”, so measuring the single most important metric for the product is a necessary first step to improving it.

However, making a single metric your “north star” and using it to me measure the success of the product team also has downsides, like the following quote from “Product Leadership” (Banfield / Ericsson / Walkingshaw 2017) illustrates:

Most metrics suffer from this — a single point of measurement. Try to begin with establishing an outcome, not an output, and that outcome should be based on your customer and the problem you are trying to solve. Then use several metrics in the experience to measure that outcome so that you don’t rely on a single metric organization-wide to drive your product strategy forward. The results will speak for themselves. Actionable, measurable, and time-bound metrics that balance the short term and the long term are the best practice by the world’s best practitioners.

Expanding a bit further on the downsides of a single metric eluded to in the quote above, having a single north star metric comes with particular risks: lack of ownership, disempowerment, finger-pointing, and metric “hacking”.

A north star metric, almost by definition, needs to cover the work of all teams and the entire user lifecycle from acquisition through churn. That means no one “owns” the metric and it’s…