North Star
- Define a crystal clear north star. The best north star is A SIMPLE, measurable metric.
- Hire uncomfortably good people.
- Create a culture of urgency.
- Make sure no one gets blocked.
- Occasionally take big swings. And when you do, go ALL IN!
- Nail the attitude. Enthusiasm, hard work, care for each other.
Now imagine a company with;
- A clear north star
- Exceptional people
- Urgency at every corner
- Empowered teammates
- Fearless risk taking
- And a great attitude
… that’s a WINNER!
What is our current North Star?
The #1 question to start with: Which metric, if it were to increase today, would most accelerate my business’ flywheel?
Type of company: Consumer subscription products (Most SaaS Companies) Most common North Star Metric: Engagement or customer growth
Broadly, there are six categories of North Star Metrics:
Revenue (e.g. ARR, GMV): The amount of money being generated — the focus of ~50% of companies.
Customer growth (e.g. paid users, marketshare): The number of users who are paying — the focus of ~35% of companies.
Consumption growth (e.g. messages sent, nights booked): The intensity of usage of your product, beyond simply visiting your site — the focus of ~30% of companies.
Engagement growth (e.g. MAU, DAU) The number of users who are simply active in your product — the focus of ~30% of companies.
Growth efficiency (e.g. LTV/CAC, margins) The efficiency at which you spend vs. make money — the focus of ~10% of companies.
User experience (e.g. NPS) The measure of how enjoyable and easy to use customers find the product experience, overall — the focus of ~10% of companies.