The North Star metric must do three things: lead to revenue, reflect customer value, and measure progress. The North Star metric is the only metric for your company that produces. It will differ for every company based on the type of product you sell and the audience you sell to. When tracking revenue, you're measuring how much money you get at the end of a month, quarter, or year, but not how much your customers are spending. In the software as a service industry, the customer lifetime value and customer churn rate are great metrics to track success, but they are not exactly North Star metrics.

Choose something your entire company can focus on. The North Star metric should be something everyone in your company can use to improve your product or service. Choose time-bound metrics and take small steps to improve them. If your North Star metric, is increasing over time but your revenue isn't, you may have chosen something that is not relevant to your actual growth. The North Star metric can be incredibly valuable to any company, but it requires a profound knowledge of your target market and product.

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