Think fast: what’s your company’s North Star?
If it’s more than goals and desires, then what is it? Simply put, your North Star is what anchors you to your company’s purpose. It’s a single data point that reflects your strategy to develop and promote your product or service.
Why is this important? Adversity, the unwelcome visitor that shows up usually unannounced, doesn’t have to derail you. When sales are sluggish, you’re feeling burned out, or your competition clinched the contract you hoped for, you can bounce back by revisiting your value system.
Knowing your North Star metric can give you a deeper understanding of your customers, provide clarity about existing challenges, and align you and your team to deliver on the promises of your purpose effectively. It also enables potential investors to envision the future growth of your company.
In 2021, CB Insights analyzed more than 100 post-mortem reports by failed startups. Most issues are caused by a lack of internal alignment and focus too late to correct course.
North Star metrics should lead to revenue, reflect customer values and measure your company’s progress. Here are five questions to get you started:
- What does your customer’s success moment look like? This is the moment your customer gets the intended result from your product or service. Examples include a download, a booking, or a subscription, to name a few.
- Can you define a time range or level of frequency? You want to clearly see that you are growing over time. Examples could be hour, day, week, or month.
- Can the metric be communicated? Ensuring everyone at the company understands the metric is critical to success.
- Do you have control over this metric? Your North Star should not be influenced by other external factors outside of your customers.
- Does a positive increase in this metric drive future growth? If you answer yes, but…then you’re not measuring the right thing.
Examples of company North Star metrics:
- Amazon: number of purchases a month
- Airbnb: booked nights
- LinkedIn: monthly active users (MAU)
- Spotify: monthly paid subscribers
- Uber: rides per week
- Zoom: weekly hosted meetings
Take time to do your research and consider what drives your success. Once you’ve defined, it’s time to start measuring your progress. Your North Star metric may need to be reevaluated as your business moves from early stage to maturity. Remember, by defining your company’s North Star, you are ensuring your business will remain on the path to success, no matter the challenges it may face.
Side note: EBW’s Founder, Ingrid Vanderveldt talks about finding your North Star in her book, “Be The One”, available later this year. It’s also a big part of the work we are doing preparing for the EBW.ONE platform launching in August.
Photo attribution: Fauxel – Pexels
