define-north-star

Define North Star Metric

When to use: During strategy planning, when metrics feel scattered, or when teams are optimizing different things

Framework source: Aakash Gupta's "Do you really need a North Star Metric?"

Quick Start

1. Tell me: "Help me define our North Star metric" (or "Validate our current North Star")
2. I will check [[business-info-template]] and thoughts/shared/pm/frameworks/ for your business model, growth stage, and existing metrics
3. I will ask about your core value, retention drivers, and business model to narrow candidates
4. We work through: Core Value identification, Metric formula (Frequency x Core Action x Breadth), Validation tests, Input metrics, and Guardrails
5. Output goes to thoughts/shared/pm/metrics/north-star-[quarter].md

Key decision: Not every product needs a single North Star. Marketplaces, multi-product companies, and complex B2B may need a constellation of 2-4 metrics instead. I will help you decide which approach fits.

Context Routing Logic (Internal - for Claude)

Automatic Context Checks: When this skill is invoked, immediately check:

| Source | Files/Folders | Search Terms | What to Extract | | --------------- | ---------------------------------------------- | ---------------------------------------- | ------------------------------------- | | Strategy Docs | thoughts/shared/pm/frameworks/.md | objective, business goal, success metric | Current metric direction, if any | | Business Model | thoughts/shared/pm/context/business-info-template.md | revenue model, growth focus, metrics | What drives the business | | Metrics History | thoughts/shared/pm/metrics/.md | baseline, trends, retention data | Current metric baselines and movement | | Meetings | thoughts/shared/product/meeting-notes/.md | "North Star", "KPI", "success metric" | Stakeholder expectations | | PRDs | thoughts/shared/pm/prds/.md | success metric, target | Feature-level success indicators |

Context Priority:

1. Business model and revenue drivers FIRST
2. Current product stage and growth focus SECOND
3. Historical metrics data THIRD
4. Stakeholder expectations FOURTH

Cross-Skill Links:

• If building strategy → Link to /write-prod-strategy which uses North Star
• If defining feature metrics → Link to /feature-metrics which should ladder to North Star
• If analyzing retention → Link to /retention-analysis to identify leading indicators
• If setting up metrics framework → Link to /metrics-framework

Step 0: Understanding Your Current Metric State

Before defining your North Star, let me understand where you are...

Checking:

• thoughts/shared/pm/context/business-info-template.md for your business model
• thoughts/shared/pm/frameworks/ for strategic direction
• thoughts/shared/pm/metrics/ for baseline metrics and trends
• thoughts/shared/product/meeting-notes/ for stakeholder priorities

Based on what I find, I'll show you:

Current Metric State

Business Model:

• [How do you make money? Subscription / marketplace / ads / transactions?]
• [Growth stage: acquisition focus / retention focus / monetization focus?]
• [TAM: addressable market size]

Existing Metrics:

• [Current metrics dashboard: what are you tracking?]
• [Metric trends: what's moving, what's flat?]
• [Stakeholder focus: what does leadership care about?]

Metric Gaps:

• [Metrics that aren't connecting to decisions: vanity metrics?]
• [Decisions being made without data: where are you flying blind?]

PM-Specific Diagnosis Questions

1. Business Model Clarity: Are you clear on what drives revenue/value in your business?
2. Growth Focus: Are you optimizing for growth, engagement, retention, or monetization?
3. Team Alignment: Do all teams agree on what success looks like?
4. Data Quality: Do you trust your existing metrics data?
5. Decision Speed: How quickly do you need to make decisions? (Hourly, daily, weekly, monthly?)

What is a North Star Metric?

Definition: The single metric that best captures the core value your product delivers to customers.

Do You Actually Need One?

When a North Star Metric Works Well:

✅ Product-led growth (PLG) companies

• Self-serve product
• Clear activation moment
• Example: Slack's "Teams sending 2,000+ messages"

✅ Consumer products with network effects

• Value increases with usage
• Example: Facebook's "Daily Active Users"

✅ Early-stage companies (Seed to Series B)

• Need focus and alignment
• Limited resources require prioritization

When a North Star Can Be Misleading:

❌ Marketplace/multi-sided platforms

• Optimizing for buyers might hurt sellers
• Need balanced metrics for both sides
• Example: Airbnb tracks host AND guest metrics

❌ Complex B2B enterprise products

• Multiple stakeholders with different needs
• Example: Salesforce has different success metrics by user role

❌ Companies with multiple business models

• Each line of business may need different metrics
• Example: Amazon (retail vs AWS vs ads)

The North Star Framework

A good North Star Metric has three components:

1. Core Action

What is the one thing users do that indicates they're getting value?

Examples:

• Spotify: Time spent listening
• Airbnb: Nights booked
• Slack: Messages sent
• LinkedIn: Weekly active users
• Notion: Documents created

2. Frequency

How often should this action happen to indicate real value?

Examples:

• Daily: Social apps (Instagram, TikTok)
• Weekly: Productivity tools (Notion, design tool)
• Monthly: Marketplace (Airbnb, Uber)
• Per-session: E-commerce (Amazon)

3. Breadth

Who needs to do this action for it to count?

Examples:

• Individual users: Netflix (hours watched per user)
• Teams: Slack (active teams sending messages)
• Multi-sided: Uber (completed trips)

Formula: [Frequency] × [Core Action] × [Breadth]

Examples:

Slack:

• Frequency: Daily
• Core Action: Messages sent
• Breadth: Active teams
• North Star: Daily Active Teams sending 2,000+ messages

Airbnb:

• Frequency: Per transaction
• Core Action: Nights booked
• Breadth: Guests
• North Star: Nights booked

Spotify:

• Frequency: Weekly
• Core Action: Time listening
• Breadth: Active users
• North Star: Weekly Active Users × Hours listened

How to Find Your North Star

Step 1: Identify Your Core Value

Answer these questions:

1. What problem does your product solve?
2. Not features, but the actual problem

1. When do users say "aha, this is valuable"?
2. Look at retention data: what do retained users do differently?

1. What action most correlates with retention?
2. Run cohort analysis
3. Compare churned vs retained users

Use this prompt:

Use /define-north-star and reference [[business-info-template]]

Help me identify our core value:
- Product: [describe your product]
- Customer problem: [what problem you solve]
- Retention data: [describe retained vs churned user behavior]

What action best captures when users get value?

Step 2: Validate Against Criteria

Your North Star should be:

✅ Measurable

• Can you track it accurately?
• Do you have the data infrastructure?

✅ Actionable

• Can teams influence it with their work?
• Are there levers to pull?

✅ Leading indicator

• Does it predict revenue/retention?
• Or is it just a vanity metric?

✅ Understandable

• Can everyone in the company explain it?
• Does it pass the "grandma test"?

✅ Captures sustainable value

• Not gameable
• Reflects real customer value

Step 3: Test for Tradeoffs

The real test: Does it help you make hard decisions?

**Example decision s