north-star-metric

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# North Star Metric: Value-Driven Metric Definition Manual

The North Star Metric is the single best metric that captures the core value that your product delivers to its customers. It is a leading indicator of long-term business success.

## Checklist

1. **Define Aha Moment** — At what moment does the user realize the product's indispensability?
2. **Select North Star Metric (NSM)** — Must embody: Value representation, Longevity, and be a Leading (not lagging) indicator.
3. **Deconstruct Metric Hierarchy** — Break the NSM down into actionable Input Metrics (L1/L2).
4. **Align Validation Matrix** — Check if the metric meets the "Healthy Metric Standards" below.
5. **Publish and Sync** — Archive the metric definition to `docs/pmpowers/specs/`.

## Metric Hierarchy Architecture

- **North Star Metric (NSM)**: Core Outcome (e.g., Airbnb's "Nights Booked").
- **L1 Input Metrics (Core Dimensions)**:
  - **Reach**: How many people came?
  - **Activation**: How many people felt the value?
  - **Engagement**: What is the frequency?
  - **Retention**: Did they come back?
- **L2 Metrics (Specific Changes)**: Metrics related to specific features (e.g., Search Conversion Rate, Page Load Speed).

## Healthy Metric Validation Matrix

| Dimension | Checkpoint | Status |
| --- | --- | --- |
| **Value-based** | When the metric goes up, does the user get more value? | [ ] |
| **Leading** | Can this metric predict revenue changes 3-6 months in advance? | [ ] |
| **Singularity** | Can the team rely on it when multiple metrics conflict? | [ ] |
| **Actionability** | Can we directly influence it through product changes? | [ ] |

## Anti-Patterns

- **Vanity Metrics**: Such as "Registered Users" or "Page Views." They always go up but fail to explain value.
- **Lagging Metrics**: Such as "Revenue" or "Profit." By the time you see them drop, it's too late.
- **Compound Metrics**: Overly complex mathematical formulas that the team cannot intuitively understand.

From zpower426/pmpowers, MIT.

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