── ── Startups

North Star Metric

The North Star Metric (NSM) is the single metric that most directly measures value delivered to customers and predicts revenue over time. Popularized by Sean Ellis and Amplitude. Revenue is the goal; the NSM is the leading indicator that predicts it early enough to act — picking revenue itself produces a lagging dashboard, not a steering wheel.

How it works

1. Articulate customer value in customer units — the customer's outcome, not your product's mechanism. 2. Generate 3–5 NSM candidates — each proxies that value as a measurable metric. 3. Apply the 3 criteria (Amplitude §2): (a) Customer value? (b) Strategy fit? (c) Leads revenue? All three required; two-of-three = supporting metric only. 4. Time-shifted correlation — does the candidate lead revenue over 6–12 months? 5. Perverse-incentive stress test — could the team game this in a way that hurts customers? 6. Pick one. Put it on the wall. Explicitly name supporting metrics as supporting, not NSMs. 7. Re-evaluate quarterly — early stage → engagement; growth → retention; scale → revenue-adjacent.

When to use it

• ** teams are optimizing conflicting metrics
• dashboard has 30+ metrics with no priority
• a leading indicator of revenue is needed
• someone says "NSM," "OMTM," "what should we optimize," or "we measure too many things."

Worked example

Facebook's "Seven Friends in Ten Days" (2007–2010)

A worked example. Not Silicon Valley legend — discussed publicly by Chamath Palihapitiya, head of Facebook's growth team 2007–2011, in lectures and interviews.