How to Choose a North Star Metric and Stay on Course
A practical guide to choosing and validating a North Star metric for product teams.
In Brief
A North Star is a metric that shows what value the product regularly delivers to users. It becomes the “north” for the team: all initiatives should increase it directly or through sub-metrics.
A correctly chosen North Star simplifies focus: fewer arguments, less chaos, more consistency.
What is a North Star (Without the Mysticism)
A North Star isn't about a trendy term. It's one metric that answers the question:
'If it grows, it means the product is becoming more valuable to users—and the business is healthier.'
Three conditions:
- it reflects value for the user;
- it affects the economics of the business;
- it is driven by product actions, not marketing injections.
Criteria for a Quality North Star
A good North Star should:
- Reflect key user value. Not activity for the sake of activity, but a result.
- Be understandable to everyone: from engineers to marketing.
- Be measurable and stable. Without spikes due to seasonality or reporting manipulations.
- Have a connection to LTV. A direct or indirect correlation is mandatory.
- Be “drivable” by the product. The team should understand: 'What actions increase it?'.
A quick test: if the metric grows, but the business doesn't get better — it's not a North Star.
How to Choose: A Practical Workflow
1. Define User Value
What a person “gets,” not what they “do.”
Example: in a delivery service, the value is delivery in X minutes, not “number of app opens.”
2. Make a List of Candidates
DAU, active sessions, number of orders per user, share of paying users, GMV, views of useful content, etc.
DAU (Daily Active Users) — shows the real daily engagement of the product.
3. Check the Connection to LTV
A simple test:
- metric grows → does LTV grow?
- metric falls → does LTV fall?
If not, you are looking at noise.
4. Exclude 'Marketing' Metrics
Anything that is driven by traffic acquisition without changes in the product, we throw out. North Star ≠ DAU if DAU grows only due to budget.
5. Choose One Indicator
One. Not three. Not a “family of metrics.”
Approximate patterns:
- subscription services → active paying users
- marketplaces → completed transactions
- content services → consumption of valuable content
- fintech → transaction volume per active client
6. Define the Drivers (Sub-metrics)
Each North Star is broken down into 3–5 drivers — levers for growth.
Example for a content product:
NS = Minutes of useful viewing per active user
Drivers:
- viewing depth
- frequency of visits
- share of 'quality' content
Examples of North Stars for Different Product Types
- SaaS B2B: 'Active teams regularly performing a key action' (e.g., 3+ automated scenarios per week)
- Subscription service: 'Monthly active paying users'
- Marketplace: 'Successful transactions per active buyer'
- Health/fitness: 'Useful completed sessions per week'
- EdTech: 'Minutes of quality learning per student'
How It's Calculated: Formula Examples and Breakdown
Below are a few typical North Star formulas with explanations. They can be adapted to your product.
1. Subscription Service (SaaS / B2C subscription)
NS Candidate:
Monthly active paying users (MAPU)
Simple formula:
MAPU = number of unique users,
who have an active subscription
and 1+ target actions per month
Breakdown into drivers:
MAPU = Number of subscriptions
× Share of active users among subscribers
Where:
- Number of subscriptions — the result of marketing and sales;
- Share of active users — the responsibility of the product (onboarding, UX, value).
If only subscriptions grow, but the number of active users is low, the NS honestly shows that you are selling an empty box.
2. Marketplace
NS Candidate:
Successful transactions per active buyer per month
Formula:
NS = (Total number of successful transactions per month)
/ (Number of active buyers per month)
Decomposition:
NS = (Number of active buyers)
× (Conversion to first purchase)
× (Average number of purchases per buyer)
/ (Number of active buyers)
= Conversion to purchase
× Average number of purchases
Logic:
- the product can improve onboarding → conversion to first purchase;
- develop repeat scenarios → average number of purchases.
3. Content Product / Media / Video Service
NS Candidate:
Minutes of useful viewing per active user (per week)
Formula:
NS = (Total minutes of 'quality' content viewed per week)
/ (Number of active users per week)
Can be broken down:
NS = Frequency of visits per week
× Average number of sessions per visit
× Average session duration
× Share of 'quality' minutes
4. EdTech Platform
NS Candidate:
Number of completed 'learning units' (lessons/modules) per student per month
Formula:
NS = (Number of completed lessons per month)
/ (Number of active students per month)
Drivers:
NS = Share of students who completed ≥1 lesson
× Average number of lessons per such student
The product is responsible for:
- a clear learning path;
- motivation and returnability;
- quality of content and feedback.
5. Fintech / Bank / Wallet
NS Candidate:
Transaction volume per active client per month
Formula:
NS = (Total amount of target-type transactions per month)
/ (Number of active clients per month)
Breakdown:
NS = Average number of transactions per client
× Average transaction amount
Product levers:
- convenience and speed of scenarios;
- additional use cases (not just P2P, but also service payments);
- incentives to use the service more often.
How to Link the North Star to OKRs
A North Star is a course-setter, while OKRs are quarterly expressions of how we are moving towards it.
OKR (Objectives and Key Results) — a system for setting goals and measurable results, shows where the team is going and how it measures progress.
The link looks like this:
North Star: transactions per active buyer Objective (O): improve the quality of the buyer experience KRs:
- increase order conversion by 10%
- reduce delivery time to the buyer by 15%
- increase the share of repeat purchases by +20%
That is, OKR — is what we do, North Star — is why we do it.
How to Stay on Course
- Don't change the North Star every 2–3 weeks. Change it only when the company's strategy changes.
- Don't choose a “convenient” metric. It should be complex, but honest.
- Don't turn the North Star into an employee's KPI. This distorts incentives and breaks product decisions.
- Don't let auxiliary metrics control the focus. They are for diagnosis, not for changing direction.
Mini-Questionnaire for Choosing a North Star
Answer 'yes' or 'no':
- [ ] Does the metric reflect key user value?
- [ ] Does the metric correlate with LTV?
- [ ] Can the team move it with product actions?
- [ ] Is it stable enough?
- [ ] Is it unambiguously calculated from data?
- [ ] Is it independent of the marketing budget?
If 'no' to ≥2 points — look for another one.
Conclusion
A North Star is not just a metric. It's a simple tool that maintains focus and forces the product to evolve around value for the user.
When the team looks at one point — decisions become consistent, experiments honest, and growth — sustainable.