North Star Playbook
The guide to discovering your product’s North Star
About the North Star Framework
The North Star Framework is a product management model based on a single metric—your North Star Metric—that best captures the value customers derive from your product.
The North Star Metric is defined by three core qualities:
- It represents the value users get from your product.
- It’s within product and marketing’s sphere of influence.
- It’s a leading indicator of revenue.
In addition to the metric, the North Star Framework includes a set of key inputs that collectively act as factors that produce the metric. Teams can directly influence these inputs with their day-to-day work.
Product and marketing teams may use very different inputs to move the North Star, but they reference the same North Star when deciding which inputs to prioritize. This serves three critical purposes:
- Helps prioritize and accelerate informed but decentralized decision-making.
- Helps teams align and communicate.
- Enables teams to focus on impact and sustainable, product-led growth.
This simple tree-like visual of the North Star Framework below is a scaffold containing assumptions, beliefs, and causal relationships. Once you assemble and field test it, this framework acts as a formula for your company’s and product’s fundamental characteristics.
Let’s dig deeper into each of these elements.
North Star Framework elements
The North Star Metric
The heart of the North Star Framework is the North Star Metric, a single critical rate, count, or ratio that represents your product strategy.
This metric is a leading indicator that defines the relationship between the customer problems your product team is trying to solve and sustainable, long-term business results.
Let’s consider a throwback—yet tangible—example. In 2005, when Netflix was still focused on shipping DVDs, the Netflix product team established the following North Star Metric: Percentage of customers placing three or more DVDs in their queue during their first session with the service. The team determined that this key statistic encapsulated Netflix’s differentiation strategy. Increasing this metric would improve customer value and key business results—like customer retention and, ultimately, subscription revenue.
Results and value
The North Star Metric is a leading indicator of sustainable business results and customer value. As you see it change, you can expect your business results to change accordingly.
Inputs
North Star inputs are a small set of influential, complementary factors that you believe most directly affect your North Star Metric.
Your inputs are just as important as your metric. These are typically a set of three to five influential, complementary factors that you believe most directly affect your North Star Metric and that you can influence through your product offering.
For example, let’s say a grocery delivery service has a North Star Metric of total monthly items received on time. Four key inputs to drive that metric could include:
- Driving customers to place lots of orders
- Encouraging orders with lots of items
- Fulfilling lots of orders
- Delivering orders on time
Inputs vary greatly by industry, business model, and a product’s unique characteristics. The trick is to identify the key factors that contribute to the North Star Metric for your business. We view the North Star Metric as a function of key inputs that are both descriptive and actionable.
Inputs are the tools product and marketing teams deploy in their day to day work to influence the North Star.
The North Star Metric is an outcome, an output, meaning its value depends on changes in your inputs.
You shouldn’t be able to influence the North Star directly.
“If you can move your North Star directly, it’s probably not a good North Star,” explains John Cutler, former Amplitude Product Evangelist and co-author of The North Star Playbook. “The goal of the North Star is to be one level out of reach. It’s to get people thinking about why is that going up, or why is that going down. It’s meant to be a composite of the parts of the company working in tandem together.”
"The work"
Your North Star Metric and inputs should be connected to your team’s daily tasks—research, design, software development, refactoring, prototyping, testing, etc. We call this “the work.” No matter how your team operates, the work you do should align with the strategy that your North Star guides.
The workshop(s)
In a focused, collaborative North Star workshop, colleagues from different parts of your organization should come together to breathe life into your North Star Framework, participating in generative activities to produce results. And with just a little preparation—and our how-to guide—you can run your own North Star workshop.
A North Star workshop doesn’t need to be overly complex. We’ve run many successful workshops in less than two hours. In this workshop, your team will develop strong candidates for your own North Star Metric and inputs.
However, your first workshop is just round one of your North Star journey. Most teams go through subsequent rounds and conduct additional workshop sessions to:
- Gather perspectives from additional stakeholders
- Pull data and pressure test ideas from the initial workshop
- Precisely define their North Star Metric and inputs
- Strengthen the connection between their North Star and their strategy, or to
- Align the North Star to their existing development processes
Your North Star Metric won’t be ready for primetime after just one workshop.
Whether you do this deeper work in additional collaborative workshop sessions or in smaller subteams, we suggest you start together in a focused workshop session.
Check out our How-to Guide: Running Your North Star Workshop for more workshop best practices.
Identify the “game” you’re playing
In our North Star workshops, before we dig in, we typically ask teams to identify and understand the “game” their business and product are playing because it helps identify their North Star.
- Attention game: Your user gets absorbed in your product, and the more time they spend using it shows increased satisfaction.
- Transaction game: Your user is looking for the right product for their needs, to easily complete transactions, and track production and delivery.
- Productivity game: Your user chooses your product because they have a job to do.
“Defining the game they’re playing is usually the first point of contention of the workshop. But it clarifies the teams’ thinking and often changes the whole focus of the North Star.”—Ted Clark, Senior Customer Success Architect, Amplitude
One North Star Metric
An obvious characteristic of the North Star Framework is that there’s only one North Star Metric. Certainly, larger enterprises with multiple or diverse divisions, product management and development departments, and customer bases could have different North Star Metrics, each with their own inputs.
But if a team contributes to a single profit and loss (P&L) statement with a single product development department, and a single product or even a product portfolio that serves a single customer base, we recommend having a single North Star with one metric and its inputs per product. It’s unlikely that one product leader should be managing more than one North Star.
We’ll explore more traps to avoid in Chapter 4.
Burger King’s digital team used the North Star Framework to define a North Star Metric their team calls “digital transactions per user” with three inputs: new user activation, registration, and frequency. They then mobilized teams—called “squads” in Burger King’s organization—to drive these inputs, as illustrated in the following figure.
The Burger King squads trace their prioritized feature development to these inputs and then to their “digital transactions per user” North Star Metric. For example, one squad prioritized a “mobile order only coupons” initiative to drive the “frequency” Input—a factor in the metric.
“[Our North Star Framework] is actually what we use across the teams to drive growth.” —Elie Javice, former Head of Technical Product Management at Burger King
Key concept: creating a product-led organization
The North Star Framework works especially well in companies that use a product-led growth (PLG) model. Product-led growth has become a hot topic—especially for B2B SaaS companies—since “growth at any cost” is out and “sustainable growth” is in. PLG is a growth motion that leverages the product, rather than marketing or sales, to drive acquisition, retention, and monetization.
A product-led organization optimizes team structures, funding cycles, communication channels, and other processes to ensure the success of its products. To be clear: Calling an organization “product-led” doesn’t mean it’s led by a department or job title with the word product in it. Product-led means being guided by the potential of products and product teams.
“The backbone of product-led growth is about your user experience. Is the user getting something out of the product that’s satisfying their reason for engaging, and is it easy to get to that point?” shares Ted.
He poses an important question: Without a North Star, how will teams guide their developers and know which features to develop? He goes on to explain that without a North Star, PLG teams run the risk of becoming feature factories—and will struggle to sustainably improve the user experience.
Ready to start your PLG journey to build a product users love—and that grows your business? Learn PLG fundamentals from industry experts in this guide. Get your copy.