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Identifying your North Star
Metric & Using a Growth
Model to move it
Presented by:
Sean Ellis
@SeanEllis
CEO & Founder
Gro...
Identifying your
North Star Metric (NSM)
North Star Metric
Overview
1. What is it?
2. Examples
3. Case study on
business impact
4. Benefits
Most important concept in growth
North Star Metric
- Focal point of fastest growing businesses
- Opposite of a vanity metr...
What is a North Star Metric?
- Single persistent metric for real growth
- Reflects growing footprint of
aggregated value
-...
Examples of Good
North Star Metrics
Facebook
- Value: see friends’ updates
- NSM = Daily Active Users (DAU)
- → to value: ...
Examples of Poor
North Star Metrics
- Registrations
no value delivered
- Repeat usage rate
new users not considered
- Aver...
How to determine a good
North Star Metric
Step 1:
Start with finding value (key “must have” benefit)
Step 2:
Find metric t...
LogMeIn Case Study
- Initially marketing focused on
registrations
- Most new registrations never
used product
- CEO refocu...
Benefits of using a
North Star Metric
- Marketing ROI
tied to value delivered
- Customer retention
tied to value delivered...
NSM is a full company metric
Not just a marketing metric
- Marketers only influence subset of NSM levers
- Right NSM align...
Using a Growth Model to
move the North Star Metric
Growth Model
Overview
1. What is it?
2. Benefits
3. Using a model
What is a growth model?
- A critical tool for growth teams
- Contains inputs, outputs over time
- Tailored to each product...
Example DAU growth model of baseline user base
Growth Model Benefits
- Source of truth
- Forecast changes in user base
- Data-driven planning
- Focuses teams on outcomes...
Example “what if” scenario of a positive change in retention
Example “what if” scenario of a negative regression in acquisition
Example “what if” scenario of a positive retention + negative acquisition change.
Example “what if” referral loop went viral D30+
Real questions from Mozilla’s marketing and product team.
“How much would we need to improve our acquisition and retention...
1. Determine what is “acquisition” for your product
2. Input real acquisition and retention cohorts over time
3. Perform c...
Steps
1. Determine NSM user event
2. Use NSM event as acquisition
3. Use NSM retention input
4. Understand growth ratios
5...
Example of NSM user model (segment of overall growth model)
- A model lets you understand your key variables and how
they impact your growth.
- A model allows your growth team to mak...
Thank you.
Learn more at blog.growthhackers.com.
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Identifying your North Star Metric & Building a Model to Predict Growth

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There are a few things undisputed when it comes to sustainably growing a company. If your product is providing value to customers and is considered a 'must-have', then the next step is laying the groundwork for sustainable growth.

During this GrowthHackers original webinar, Sean Ellis of GrowthHackers and Chris More of Mozilla help you build the foundations of:

1. Identifying your company's North Star Metric
2. Building a model to predict your company's growth

For help identifying your North Star Metric, visit: https://blog.growthhackers.com/what-is-a-north-star-metric-b31a8512923f

Publicado en: Empresariales
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Identifying your North Star Metric & Building a Model to Predict Growth

  1. 1. Identifying your North Star Metric & Using a Growth Model to move it Presented by: Sean Ellis @SeanEllis CEO & Founder GrowthHackers Chris More @ChrisMore Head of Growth for Firefox Mozilla
  2. 2. Identifying your North Star Metric (NSM)
  3. 3. North Star Metric Overview 1. What is it? 2. Examples 3. Case study on business impact 4. Benefits
  4. 4. Most important concept in growth North Star Metric - Focal point of fastest growing businesses - Opposite of a vanity metric - All important metrics key off of the NSM
  5. 5. What is a North Star Metric? - Single persistent metric for real growth - Reflects growing footprint of aggregated value - A way of measuring sustainable growth based on value
  6. 6. Examples of Good North Star Metrics Facebook - Value: see friends’ updates - NSM = Daily Active Users (DAU) - → to value: 7 friends 10 days Uber/Lyft - Value: $ for drivers, rides for riders - NSM = Weekly rides - → to value: First ride/passenger
  7. 7. Examples of Poor North Star Metrics - Registrations no value delivered - Repeat usage rate new users not considered - Average purchase size new not considered
  8. 8. How to determine a good North Star Metric Step 1: Start with finding value (key “must have” benefit) Step 2: Find metric that quantifies delivery of this value
  9. 9. LogMeIn Case Study - Initially marketing focused on registrations - Most new registrations never used product - CEO refocused team on growing usage (NSM) - Focusing on usage NSM = hockey stick growth - Today a $6B value business
  10. 10. Benefits of using a North Star Metric - Marketing ROI tied to value delivered - Customer retention tied to value delivered - Customer evangelism tied to value delivered
  11. 11. NSM is a full company metric Not just a marketing metric - Marketers only influence subset of NSM levers - Right NSM aligns full company to deliver value - All teams should evaluate their impact on NSM
  12. 12. Using a Growth Model to move the North Star Metric
  13. 13. Growth Model Overview 1. What is it? 2. Benefits 3. Using a model
  14. 14. What is a growth model? - A critical tool for growth teams - Contains inputs, outputs over time - Tailored to each product and primary growth levers - Calculates growth ratios between inputs and outputs - Mathematical representation of your user base
  15. 15. Example DAU growth model of baseline user base
  16. 16. Growth Model Benefits - Source of truth - Forecast changes in user base - Data-driven planning - Focuses teams on outcomes (instead of local maxima) - Sizes up potential “what if..” growth lever changes
  17. 17. Example “what if” scenario of a positive change in retention
  18. 18. Example “what if” scenario of a negative regression in acquisition
  19. 19. Example “what if” scenario of a positive retention + negative acquisition change.
  20. 20. Example “what if” referral loop went viral D30+
  21. 21. Real questions from Mozilla’s marketing and product team. “How much would we need to improve our acquisition and retention rates to hit our 2017 key results in December?” “In Q1, we acquired 300k incremental downloads of Firefox from new channels, how much did my team contribute to our DAU targets?” “A recent A/B onboarding test show a 5% improvement in retention after week 3. If we launch it in July, how will it impact DAU in December 2017?” “Should we invest in optimizing our acquisition funnel for the United States or Germany in Q2?” Using a Growth Model
  22. 22. 1. Determine what is “acquisition” for your product 2. Input real acquisition and retention cohorts over time 3. Perform calculations from launch to far future 4. Understand key ratios and growth rate (or stall) or... Follow @chrismore on twitter as I will announcing an open source growth model. Building a Growth Model
  23. 23. Steps 1. Determine NSM user event 2. Use NSM event as acquisition 3. Use NSM retention input 4. Understand growth ratios 5. Size up NSM hypotheses Using a model to move the NSM A model within a model
  24. 24. Example of NSM user model (segment of overall growth model)
  25. 25. - A model lets you understand your key variables and how they impact your growth. - A model allows your growth team to make more better decisions. - After successfully modeling your entire user base, model your NSM cohorts. - Remember: keep it simple! Growth Model Recap
  26. 26. Thank you. Learn more at blog.growthhackers.com.

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