Metrics That Matter: Defining North Star Metrics for Your Product
A North Star Metric aligns your team and focuses your product on delivering real value. In this blog, learn how to define your NSM step by step, avoid common metric traps, and see examples from top companies like Spotify and Airbnb. Move beyond vanity metrics and start driving true growth today.
In today’s product-driven world, it’s easy to get lost in a sea of vanity metrics - page views, app downloads, likes. But great product teams focus on one guiding light: the North Star Metric (NSM).
A well-defined NSM aligns your entire team, guides prioritization, and ultimately connects product activities to business outcomes.
What is a North Star Metric?
The North Star Metric is a single, crucial metric that best captures the core value your product delivers to customers.
"Your North Star Metric is the metric that best predicts sustainable long-term growth.”
It focuses on value creation rather than short-term gains or superficial engagement.
Why you need a North Star Metric
Align teams — Engineering, design, marketing, and leadership can rally behind one metric.
Drive focus — Reduces distractions from non-impactful metrics.
Link to growth — Connects day-to-day features to revenue and retention.
Common pitfalls when choosing metrics
Focusing on output metrics (e.g., number of features shipped) instead of outcome metrics (e.g., customer value).
Choosing vanity metrics (e.g., sign-ups) rather than metrics tied to product value.
Ignoring the customer perspective — A true NSM reflects how customers experience value.
Step-by-step guide to defining your North Star Metric
Step 1: Define your core value
Ask: What core problem does my product solve?
Spotify → Access to music anytime, anywhere.
Airbnb → Connecting travelers with local hosts and unique stays.
Step 2: Identify your leading indicators of success
Determine activities or behaviors that best represent customer value realization.
Spotify → Minutes streamed per user per month.
Slack → Messages sent per user per day.
Step 3: Ensure it's actionable and measurable
A good NSM should be:
Understandable to everyone
Directly influenced by the product team
Predictive of long-term revenue and growth
Step 4: Validate against retention and growth
Check if the NSM correlates with user retention or expansion.
If users who reach certain NSM thresholds stay longer or upgrade, you’re on the right track.
Step 5: Align teams and communicate clearly
Integrate the NSM into daily rituals: stand-ups, sprint planning, OKRs.
Case studies: How successful companies define their North Star Metrics
NSM: Messages sent per user per day.
Why: Directly measures engagement and product value (private, instant communication).
Spotify
NSM: Time spent listening to music.
Why: Reflects user satisfaction and deep content engagement.
NSM: Weekly active users who connect with valuable professional opportunities.
Why: Indicates whether the platform is truly helping users advance professionally.
Airbnb
NSM: Nights booked.
Why: Captures the real value (stays) instead of just sign-ups or listings.
Let your North Star guide your growth
A well-defined NSM can transform your product team from feature factories to value-driven organizations.
Next time you're overwhelmed by dashboards and metrics, ask: "Does this directly show the value we deliver to our users?"