In this article, we’ll cover how this quantity metric can define product quality, what are the examples from well-known companies, and surprisingly, how we define it for the Startup Community platform.
What is a North Star metric?
A North Star metric is something special to the specific startup that can tell you what to focus on. This should be something leading to more revenue, but not exactly describing it. Read why revenue is a bad case for this metric!
This metric should also declare the value for the target customer. Without that, growth doesn’t make any sense. It’s important to have that metric combine both revenue and customer value. (A value that your user pays for).
There are some good examples of a north-star metric, such as “Time spent listening to the music” for Apple Music.
There are also good examples, such as “Number of nights booked” for Airbnb or “Number of purchases per month” for Amazon. (not revenue) .
Some other examples:
How north-star metric helps?
With a clear vision of your North Star, founders can focus on what’s important for them to deliver move value to users. It’s a great indicator of product success.
The quality metric is all about Focus (for the entire company), clarity, and customer focus.
How Startup Community Platform defines its NS metric?
For our specific startup, it was especially interesting to define this metric. Why? Because the customer value is provided not by the platform, but other users.
Let’s focus on what is a customer value for Projectium. What do we do?
— we help founders build a community around their projects.
You can’t measure good vs bad feedback or the number of constant users each project gained. But we don’t actually need that. In our case, we should ask – what is a project community?
And the answer is – the number of active users that engage with a specific project. In that case, we face another question – how can we measure engagement?
Projectium was built on top social network functionality, which means every user there has an activity feed where he can see what’s going on in his network (projects he follows). We define engagement as everything you can see in that feed… posts, comments, upvotes…
Every time the project founder receives a notification (a reason to visit Projectium again) we treat it as engagement.
So what is our North Star metric? The number of engagements on the platform.