North Star

Avi Siegel

•

5 min read

What is a North Star?

A North Star is a strategic framework that guides companies toward their ultimate vision of success. It consists of two parts: the North Star vision (your ambitious, qualitative goal) and the North Star metric (the single number that best indicates progress toward that vision).

Why do companies specify a North Star?

The primary goals of implementing the North Star framework are to:

  • Align the entire organization around a clear definition of success

  • Create clear connections between team-level work and company-level impact

  • Enable data-driven prioritization of initiatives (which can be further informed by OKRs that feed into the North Star)

  • Measure progress toward the long-term vision

How do you establish a North Star?

Creating an effective North Star framework involves three key components. Of course, you need to define the vision and select the metric - but then, you also need to bring the rest of the company along for the ride and ensure teams are doing work that pushes the company forward toward its goal.

Define the vision

Your North Star vision is your ultimate goal - the future state you’re trying to create. This goes beyond a bland corporate vision statement; it must truly paint a picture of the outcome you want to provide for your customers.

Your vision should be:

  • Customer-focused: Centered around benefits for your users, not the company itself

  • Value-based: Focused on outcomes, not outputs

  • Enduring: Stable enough to guide the company for years to come

  • Ambitious: Just out of comfortable reach to drive innovation

Here are some examples of great North Star visions:

  • Slack: Make work life simpler, more pleasant and more productive.

  • Zoom: Make video communications frictionless.

  • LinkedIn: Create economic opportunity for every member of the global workforce.

You’ll notice something quite purposefully missing from the above visions: the "how". The vision does not specify a solution. Rather, it paints a picture of a better future where a problem has been solved.

Pro Tip: Avoid industry jargon. Your vision should be understandable by everyone. This of course includes internal employees - from engineers to designers to sales reps to product marketers to every other team. But more importantly, it includes customers - because after all, if customers don’t know what you’re talking about, your vision probably isn’t very customer-focused, is it?

Select the metric

Your North Star metric is how you measure progress against your North Star vision. The goal is to find a single metric which truly encapsulates what you’re trying to do. This is not the place for KPIs, OKRs, or top-line metrics - those miss the point entirely.

Your metric should be:

  • Value-based: Again, focused on outcomes, not outputs - but this time, quantifiably

  • Simple: Easy to understand and communicate

  • Gaming-resistant: Not easily manipulated (i.e., keep in mind Goodhart’s law)

Here are some examples of great North Star metrics:

  • Spotify: stream time

  • Airbnb: nights booked

  • Quora: questions answered

  • Amazon: monthly purchases per user

  • Uber: rides booked

  • Coinbase: transacting users

  • Netflix: watch time

Pro Tip: Avoid vanity metrics at all costs. "Total users" doesn’t mean they’re actively getting value. "Time in app" can just imply that you’re not helping users be efficient. "Social media followers" doesn’t guarantee engagement. Focus on what matters.

Cascade goals throughout the organization

Once you have your North Star vision and metric, the next challenge is getting teams throughout the organization to effectively work toward them. This requires building a clear hierarchy that connects everyday work to customer (and company) success.

A common way to do this is through a metrics pyramid - and this is where OKRs come into play.

  • The North Star should come from the top company executives or founders, as mentioned

  • Layers of leadership and management should set OKRs as appropriate to funnel specific goals toward individual teams - note that this does not mean there is a level of OKRs for every level of management, but (especially for larger organizations) there will certainly be some breakdown here

  • Teams themselves (specifically, product managers owning respective capability areas) should drive the creation of their own OKRs (although the OKRs still need to be approved by higher levels in the chain)

Pro Tip: Don’t force artificial connections here. If a team can’t draw a clear line between their metrics and the North Star, either their metrics or their work needs to be reconsidered.

Who should establish a company’s North Star?

The answer here is a definitive one: leadership. This can be the executive leadership team more generally, or the CEO/founder(s) specifically.

Of course, it is wise for said leadership to consider input from knowledgeable and experienced colleagues when establishing (or rarely, changing) the North Star vision or metric. But the North Star framework is there to guide what the rest of the company is doing, so you want to ensure there isn’t a cyclical decision process.

When should you measure progress against the North Star?

Meaningful change takes time. While it should ideally be easy to run the required calculations, checking the result daily, weekly, or even monthly will too easily lead to short-term thinking and bad decisions.

Instead:

  • Track the metric continuously, but evaluate change quarterly or annually

  • Look for sustained trends, not short-term fluctuations

  • Maintain patience with new initiatives - impact will lag behind implementation (sometimes significantly so)

And avoid these common mistakes:

  • Over-reacting to short-term changes

  • Not accounting for seasonality or cyclical patterns

  • Confusing correlation with causation (especially when multiple initiatives launch around the same time)

  • Abandoning promising initiatives before they’ve had time to show impact (or lack thereof)

Best practices surrounding North Stars

  • Keep it simple. If you need complex formulas or countless caveats, you’ve probably chosen the wrong metric.

  • Don’t compromise on value. Resist the urge to choose metrics that are easier to move but don’t indicate real success

  • Remember Goodhart’s law. When a measure becomes a target, it ceases to be a good measure. If it can be gamed, it will be gamed (and most metrics can be gamed). This doesn’t necessarily mean the metric itself is flawed, but do pay attention to the ways the metric is being improved.

  • Maintain clear connections. Every team should understand how their work drives the North Star. If there is no clear connecting thread, it may be that the work the team is performing is not as valuable as you thought.

  • Be patient but vigilant. Give initiatives time to show impact, but be ready to adjust if you’re not seeing results.

  • As a rule, never change course (but also, never say never): Your North Star should be stable enough to guide decision making far into the future. Changing the North Star should really only occur when the company pivots, or if the original North Star was simply not good enough (in which case, the next one better be).