Friday, December 24, 2021


Noah Kegan was employee#30 at Facebook. He was a keen, curious and a creative employee. Back in the year 2005, Noah took Mark Zuckerberg into the conference room and shared an idea that he considered as a genius idea. At that time, Facebook's business model was evolving and it was not earning in billions of dollars as it today. Noah was concerned that Facebook wasn't making enough money and his idea revolved around revenue generation but apparently it missed a point. Mark listened to him and then moved to the whiteboard wrote the word, “GROWTH.” He proclaimed he would not entertain any idea unless it helped Facebook grow by total number of “users.”

That was the maniacal focus Mark had on the metric that mattered the most- The North Star Metric (NSM).

Alex Garcia in his comprehensive twitter thread breaks down the concept of north star metric (the summary in my sketchnote). Alex says-

The north star metric is the core metric of your business's growth. It's one metric, but it’s two-fold:
- The value you provide to a customer
- The direction of the company’s long term growth
If your NSM grows, your company grows.

This number best reflects the amount of value that a company brings to your customers. The core idea is that if your company brings more value to your customers, then the growth of your company has to go positive.
A few well-known NSM examples are:
Spotify = ‘Time spent listening‘
Airbnb = ‘Number of nights booked‘
Facebook = ‘Monthly active users‘
Slack= 'Daily active users'

While difficult to nail down in one go (and takes a few iterations), NSM returns focus, transparency and customer orientation to the team executing the business.

What do you think is the north star metric of your work ? Can the concept of north star metric be applied to one's life goals ?

LinkedIn Post:

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