Growth Factorials

For startups, growth can feel like juggling a dozen priorities at once. With so many metrics to track—revenue, user sign-ups, app downloads—it’s easy to lose focus. That’s where the North Star Metric (NSM) comes in.

The NSM, a concept popularized by Sean Ellis, is a single, guiding metric that reflects the value a company delivers to its customers. It helps startups align teams, make better decisions, and grow sustainably.

This article explores why the North Star Metric is a powerful tool, how it outshines other metrics, and how companies could potentially define their NSM to ensure customer-centric growth.

What is a North Star Metric?

The North Star Metric is the one number that best captures the core value your business provides to its customers. It ensures everyone in the company—whether in marketing, product, or operations—works toward a shared goal that delivers the most impact.

Why is an NSM Important?

1. Customer-Centric Growth: Keeps teams focused on what matters most to users.
2. Simplifies Prioritization: Helps startups decide what to build, fix, or optimize next.
3. Unites Teams: Aligns different functions under one clear, measurable objective.
4. Encourages Long-Term Success: Drives growth that’s based on creating value, not short-term wins.

Illustrating NSM with Swiggy and Duolingo

While these examples are hypothetical and may not represent the actual metrics used by Swiggy or Duolingo, they demonstrate how an NSM can be applied.

Swiggy: Total Orders Delivered On Time

Swiggy’s mission is to deliver food reliably, quickly, and conveniently. A fitting NSM for Swiggy could be “Total Orders Delivered On Time.”

Why It Works:

• It reflects Swiggy’s ability to meet customer expectations for speed and reliability.
• It aligns operations, products, and marketing around improving delivery performance.
• It drives customer satisfaction and loyalty, leading to repeat orders and sustainable growth.

How to Improve This NSM:

1. Optimize Delivery Logistics: Use better algorithms for routing. Match the availability of delivery partners with the demand dynamically.
2. Streamline Restaurant Prep: Partner with restaurants to reduce order preparation delays.
3. Improve Communication: Provide customers with real-time updates on delivery status.

Duolingo: Total Lessons Completed Per Week

Duolingo’s mission is to make language learning accessible, engaging, and effective. A potential NSM for Duolingo could be “Total Lessons Completed Per Week.”

Why It Works:

• It captures user engagement and learning progress, reflecting meaningful value.
• It drives retention, as users who complete lessons consistently are more likely to stay active.
• It aligns teams to focus on improving content, gamification, and notifications.

How to Improve This NSM:

1. Enhance Gamification: Add more rewards, streaks, and badges to motivate users.
2. Personalize Lessons: Use AI to tailor content to each learner’s pace and preferences.
3. Re-engage Users: Send reminders and encouragement to complete lessons.

How the NSM Helps vs. Other Metrics

The North Star Metric is a strategic tool that helps companies navigate growth challenges. Here’s why it’s more effective than traditional metrics:

1. Puts Customers First

The NSM ensures startups prioritize the value they deliver to users. It’s not just about what benefits the company (like revenue), but what keeps customers coming back.

• Example: Swiggy’s illustrative NSM of “Total Orders Delivered On Time” focuses on reliability, a key factor in customer satisfaction. Metrics like “revenue” might encourage upselling, but they don’t ensure a positive user experience.

2. Avoids Vanity Metrics

Metrics like app downloads or daily active users can inflate a company’s sense of success without delivering real insights.

• Example: Duolingo’s potential NSM, “Total Lessons Completed Per Week,” emphasizes meaningful engagement. Metrics like “time spent on the app” might rise due to distractions, but that doesn’t guarantee learning progress.

3. Align teams Under One Goal

Startups often suffer from misaligned priorities across teams. The NSM ensures that everyone is working toward the same outcome.

• Example: For Duolingo, “Total Lessons Completed Per Week” unites marketing (to drive user engagement), product (to optimize lesson design), and operations (to ensure platform stability).

4. Drives Long-Term Growth

A well-defined NSM encourages habits and loyalty, building sustainable growth instead of short-term spikes.

• Example: Swiggy’s focus on timely deliveries fosters trust, ensuring customers repeatedly choose the platform. Short-term metrics, like discounts redeemed, might drive usage temporarily but don’t create lasting relationships.

Takeaways

The North Star Metric is the foundation of a startup’s growth strategy. Unlike traditional metrics, it focuses on delivering core value to customers and ensures teams work toward a common goal.

For companies like Swiggy and Duolingo:

• Swiggy’s potential NSM, “Total Orders Delivered On Time,” ensures reliability and trust, critical for customer retention.
• Duolingo’s possible NSM, “Total Lessons Completed Per Week,” emphasizes meaningful engagement and learning progress.

While these examples are hypothetical, they highlight how the NSM can drive sustainable growth by focusing on what truly matters to customers. Startups that define their NSM well are better equipped to scale, align their teams, and create long-term value.

So, what’s your North Star Metric? Find it, focus on it, and let it guide your journey to success.