North star metric
The one product metric that best captures the value customers get and predicts long-term revenue, used to align teams, such as weekly active users who complete a key action. It stops teams from optimising their own numbers in different directions. It fails when it is a vanity count or a revenue number in disguise, and when teams push it in ways that hurt what it was meant to measure.
Where it's used
Used in product-led companies, growth teams and startup planning to give product, marketing and sales one shared goal. Good when the metric moves with customer value and can be broken into inputs that teams can act on.
Example
From sign-ups to shared invoices
Illustrative scenarioAn invoicing app has tracked sign-ups, and sign-ups keep growing while revenue stays flat. Looking at paying customers, the team finds that people who send three invoices in their first month almost always stay. The north star becomes the number of businesses sending at least three invoices a month. Onboarding, emails and ads are now judged on that, not on sign-ups.