Define the North Star Metric

Over the last couple years a business concept has dramatically increased in popularity: the North Star Metric. As expected, the North Star Metric represents the most important indicator of the health of the business. Put another way, if you were to only track one single metric for the entire company, this would be it. And in the spirit of the Simple Strategic Plan, the North Star Metric brings clarity to an area that’s often over complicated: measuring what matters.

Lenny Rachitsky has an excellent post up titled Choosing Your North Star Metric where he goes through a number of ideas on the topics. First, there are six general categories:

  • Revenue
  • Customer growth
  • Consumption growth
  • Engagement growth
  • Growth efficiency
  • User experience

Then, he goes through a framework for choosing a North Star Metric based on the type of company.

Lenny Rachitsky North Start Metrics

Every entrepreneur should head on over and read Choosing Your North Star Metric.

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