🏔️ North Star Metric

align your team around 1 simple metric

Author

Vlad Oleksiienko
July 25, 2023

Hey there,

Welcome to the SaaS Hill, a weekly newsletter that tries to predict the future of SaaS.

Let's discuss North Star Metric 🌠.

⭐️️ Intro

Maybe you notice that the bigger your SaaS company becomes, the harder it is to align and focus a team:

  1. Everyone has their own ideas.

  2. The engineering team wants to rewrite the product from scratch.

  3. The product team wants to add more cool features.

  4. The growth team wants to polish the onboarding process.

  5. The marketing team wants to generate more MQLs.

  6. Every department has its own KPIs or OKRs.

Basically, everyone wants to push their own agenda.

For this reason, some of the fastest-growing and well-known SaaS companies implement one simple, high-level metric that could align all departments and decision-makers around one simple goal.

And this goal can be converted into a North Star Metric.

Researching this topic, I put together a list of 46 North Star Metric Examples. So let’s see what’s in 👇

🤿 Deep Dive

If you want to get access to the list right away, feel free to check it right here:

The North Star Metric has three powerful pillars:

  1. You can laser-focus all teams to achieve one simple goal.

  2. You can align all teams around one simple metric (it should be easy to measure it).

  3. You can help all employees channel their "energy", "thinking power", "brainpower", and "engagement" (whatever you call it) to achieve this result.

Based on Lenny Rachitsky’s research, there are several types of North Star Metrics:

  1. Revenue (MRR, ARR, Revenue Growth, MRR Growth)

  2. Growth Efficiency (Rule of 40, margins, profitability, CAC/LTV, lower CAC, increased LTV, NRR)

  3. Customer Growth (MRR Generated by our Clients, Resolved conversations for our customers, Teams using Dropbox Business)

  4. Consumption Growth (Number of videos viewed, number of signed documents, emails sent by a team)

  5. Engagement (WAU - Weekly Active Users, MAU - Monthly Active Users)

  6. User Experience (NPS, CSAT, Positive Reviews)

  7. Strategy (Optimize X, e.g., CAC, market share, unit economics, user activation)

So here are some examples of a North Star Metric.

46+ North Star Metrics by 🏔️ SaaS Hill

Hope you will enjoy the list!

In the meantime, feel free to share the list with your friends and colleagues.

Wishing you find your North Star Metric 🖖

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Thanks for reading. See you next time 👋

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