3. Today’s session
Part 1: Foundational Principles
• Characteristics of Metrics
• Types of Metrics
• Dimensions of Metrics
• Metrics and Stages of Business
• Metrics and Business Models
Part 2: North Star metrics +
• Characteristics
• Definition
• Limitations
• Making it real with my product
• Interactive session with your
product
3
31. The ONE thing to know
North star metric should represent,
the realized value for the customer
31
32. Consider…
# Daily active users
# Registered users
# Signups
# Downloads
They say absolutely nothing
about what your customers value
about your product.
A missed opportunity to provide
clarity and purpose the team
32
34. NTM - 3 Critical Goals
Gives your
organization clarity and
purpose
Helps to decide the
trade offs
Communicates
product’s impact and
progress
Helps to stay in
alignment
Product is held
accountable to the
outcome
34
36. The Definition
A north star metric should consist of 2 parts:
▪ A metric that represents customer value led by product vision
▪ A metric that represents your product strategy driven by product
stage
36
38. Example: Amplitude
Customer Value
Easily answering questions on what
drives behavior and powering a better
customer experience
Growth stage [Between Virality and Revenue]
The metric of Weekly Querying Users
(WQUs) reflects breadth –
The number of customers who get
value at least once a week is a leading
indicator of our ability to retain and
expand accounts over time.
38
42. Answer
Can you think of any north star metric that all products
can use?
Not possible. Your product north star should be specific to your
product and what your customers value
42
43. A good north star metric is
Leading indicator of product’s success in relation to
customer value
43
44. Which is a better
NTM?
Revenue retention
Renewing subscription value at
$3M
Usage retention
Weekly querying users at 10K
44
47. 47
When do your customers reach end-result?
Does this apply to all our customers?
Is this moment measurable for us?
Does this metric show the actual engagement
with the product?
Does my NSM metric change frequently? Can this metric determine that the product is
moving in the right direction?
Is NSM growth tied to business growth? Is it easy to understand and communicate
across all teams?
What is the best frequency? [Stage dependent] Can this metric guide you when evaluating
pricing, potential features, plans, and other
important decisions?
What external factors have an impact? Can everyone in the company (marketers, sales,
UX, etc.) relate what they’re doing to this
metric?
Does the full pirate funnel impact NSM? Does it capture the essence of the company and
long term value of your product?
53. LinkedIn
▪ Monthly active users
▪ Growing monthly engagement per user defined by
□ Meaningful conversations / connections / follows /
shares etc.
53
55. The limitations
North Star Metric
Also known as One Metric that Matters can be limiting for
large organizations.
55
56. Example
LinkedIn has teams dedicated to monetization and
engagement
1. Monetization targets revenue from ads
2. Engagement targets activities like connections, comments etc.
56
57. Simplistic understanding
of the scenario
1. Ads will put off people and monetization team will lose
out.
2. Monetization teams’ gain can affect long term
engagement which can affect long term retention.
.
57
58. A more sophisticated
approach
1. Ads can put off people and enable monetization gains
2. The temporary loss of engagement may be worth the financial gains
temporarily
3. This could be a grand experiment to focus on the retention of high
value customers
58
59. So What?
▪ Large enterprises have teams with diverse focus areas. A north star
metric cannot objectively represent the multiple product goals
▪ A north star metric cannot account for one metric affecting another
▪ The NTM that intends to provide clarity can actually increase blind spots
All of the above create a climate for bad decision making in the long run
59
60. What does this
mean?
▪ You should not oversubscribe to the One metric that matters
argument.
▪ You should consult the first principles and choose metrics that
will help you make decisions objectively, proactively and
progressively as the product evolves
60
67. ▪ Reflect on Product principles
▪ Think about your business model.
▪ Reflect on the stage of the business
▪ Begin with a North star metric
▪ Build the constellation metrics with other dimensions
Engagement, Retention, Monetization
▪ Depending on the scale of the product think more input or
supportive metrics that will help you achieve the primary
metrics
▪ Sanity check on product principles
67
69. CareerEQ
Paid Product – Video content and slides
A DIY coaching session to
figure out what’s next for you
and how to get there
▪ launch offer for $39
▪ 15-20 hour course
▪ 100% money back in 3 months
▪ 50% refund when reviews are
shared via social
69
70. Business Stage:
Empathy & Stickiness
Problem Validation
▪ Is the problem real
and do people care
enough about it to
solve?
Solution Validation
▪ Will they use or buy
it for enough money
from you?
Product value
▪ Will my product
grow?
▪ Will they care to
come back and tell
others?
70
72. CareerEQ >NTM
Paid Product – Video content and slides
Engagement
▪ Ratio of positive to
not-so-positive
reviews
▪ No. of people
getting 50% refund
after completion
Retention /
Acquisitions
▪ Ratio of visitors to
purchases
Monetization
▪ Total no. of
purchases
▪ Net revenue
(purchases –
returns)
72
80. Business Stage: Empathy & Stickiness
Before Product Market Fit
Problem Validation
▪ Is the problem real
and do people care
enough about it to
solve?
Solution Validation
▪ Will they use or buy
it for enough money
from you?
Product value
▪ Will my product
grow?
▪ Will they care to
come back and tell
others?
80
82. The Definition
A north star metric should consist of 2 parts:
▪ A metric that represents customer value led by product vision
▪ A metric that represents your product strategy driven by product
stage
82
83. 83
When do your customers reach end-result?
Does this apply to all our customers?
Is this moment measurable for us?
Does this metric show the actual engagement
with the product?
Does my NSM metric change frequently? Can this metric determine that the product is
moving in the right direction?
Is NSM growth tied to business growth? Is it easy to understand and communicate
across all teams?
What is the best frequency? [Stage dependent] Can this metric guide you when evaluating
pricing, potential features, plans, and other
important decisions?
What external factors have an impact? Can everyone in the company (marketers, sales,
UX, etc.) relate what they’re doing to this
metric?
Does the full pirate funnel impact NSM? Does it capture the essence of the company and
long term value of your product?