North Star Playbook

John Cutler Dec'2019 ebook: The North Star Playbook. Tia was feeling burned out. Her company seemed caught in a perpetual cycle of shiny objects, success theater, false starts, and vague pivots-by-PowerPoint. Just when they hit their stride, something would change. It felt like they were always talking past each other.

A team using the North Star Framework identifies a single, meaningful metric and a handful of contributing inputs. (This document uses "team" to encompass the "entire" Product Team, or/rather the Union of all Product Teams. Not a single small team within a cluster.) (input metric)

(2022 tweet: I went through 100s of North Star Workshops I've done with real companies at Amplitude_HQ. High level ... there are 4 patterns for North Star Metrics and around 8-12 input patterns.)

In the early 2010s, Sean Ellis and the growth hacking movement helped popularize the structure of the North Star that inspired this book.

In this book, we will teach you about North Star Framework, describe how to run a North Star workshop at your company, and help your team converge on a North Star Metric and supporting input metrics

Chapter 1. About the North Star Framework

In this chapter, you will learn…

• The definition of the North Star Framework
• The structure of the North Star Framework
• The three critical goals of the North Star Framework

The North Star Framework, Defined

The North Star Framework is a model for managing products by identifying a single, crucial metric (the North Star Metric) that, according to Sean Ellis, “best captures the core value that your product delivers to [its] customers.”

In addition to the metric, the North Star Framework includes a set of key inputs that collectively act as factors that produce the metric. Product teams teams can directly influence these inputs with their day-to-day work.

The Elements of the North Star Framework

1. 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 that the product team is trying to solve and sustainable, long-term business results

The team understood that this key statistic encapsulated Netflix’s differentiation strategy.

2. Results and Value

customers placing three or more DVDs in their queue during their first session

sustainable business results and customer value

3. Inputs

small set (3-5)

of influential, complementary factors that you believe most directly affect the North Star Metric, and that you believe you can influence through your product offering.

For example, Instacart, a same-day grocery delivery and pick-up service, identified four inputs into a North Star Metric of total monthly items received on time. They need (1) lots of customers placing orders. Those orders ideally contain (2) lots of items. Instacart needs to fulfill (3) lots of orders. And (4) the orders need to be delivered on time.

4. “The Work”

tasks of research, design, software development, refactoring, prototyping, testing, and such.

One North Star

if a team is contributing to a single P&L, with a single product development department, and a single product or even a product portfolio that serves a single customer base, they should strongly consider having a single North Star (group of teams share the North Star - not each team having its own)

A Real-World Example: Burger King

define a North Star Metric called Digital Transactions Per User with three inputs: new user activation, registration, and frequency

Key Concept: Product-Led

The North Star Framework works especially well in organizations that aspire to be more product-led.

calling an organization “product-led” doesn’t mean it is led by the department or job title called “product management” or, as shorthand, “product.” Product-led means being guided by the potential of products and product teams.

Product-led organizations shift from this… To this…

Chapter 2. The North Star Checklist

In this chapter, you will learn…

• The characteristics of a strong North Star, in checklist format.
• What a North Star is not

North Star Checklist

Expresses Value

represents what customers value about your product.

Represents Product Vision & Strategy

Each strategy we had at Netflix—from our personalization strategy to our theory that a simpler experience would improve retention—had a very specific metric that helped us to evaluate if the strategy was valid or not.

Leading Indicator of Success

This is why metrics like monthly revenue or average revenue per user (ARPU) aren’t optimal North Star Metrics

Actionable

Understandable

Measurable

However, don’t fall into the trap of thinking that your North Star must be something you can measure with your current data and tools. In many cases, with just some light instrumentation and investment in new tools, or even just improvements in communication and relationships, you’ll be able to measure what you want.

Not a Vanity Metric

Example Vanity Metrics: Daily Active Users

What the North Star is Not

The North Star Framework is not:

• Your roadmap.
• Your software development process.
• A prioritization framework.
• A goal-setting framework, like OKRs or Focus Cards, though the North Star can be a strong foundation upon which to base goals.

Chapter 3. Getting Started: Running a North Star Workshop

In this chapter you’ll learn:

• Suggestions for conducting your own North Star workshop.
• Who should participate in your initial North Star workshop.
• Several activities you can complete as a team.
• What you should expect to accomplish by the end of the workshop.

Running your Own North Star Workshop

in just 60-120 minutes. At the end of this workshop, your team will develop strong candidates for your own North Star Metric and Inputs.

facilitator

Cross-functional skills

Financial responsibility

Decision makers

Create psychological safety by reiterating the purpose of the North Star Framework

the North Star Framework’s purpose is to use metrics and inputs to guide a product’s ability to satisfy customers and contribute to business success, not to monitor employee performance.

How many people should be included in your workshop?

“seven plus or minus two.”

Workshop Opening Discussion

shared understanding about the North Star Framework

Workshop Discussion: Identify the Game You are Playing

Your company is likely playing one of three games. Understanding which one can help you identify your North Star.

The Attention Game

• How much time are your customers willing to spend in your product?
• The Transaction Game
• How many transactions does your customers make in your product?
• The Productivity Game
• How efficiently and effectively can someone get their work done?

While you might think you are playing all of these games, we’ve found that encouraging workshop participants to pick a single game is most fruitful.

For example, if you are playing the Productivity game, you must understand that your user chooses your product because she has a job to do. She wants to do it efficiently and without errors. In fact, a measure of success may be that she’s using your product less.

The game should be tied to the event that creates value.

If you’re not certain which game you’re playing, ask yourselves which of these sets of statements most closely corresponds to your product, or which of these products is most similar to yours

You are playing the Attention Game… If you find yourself saying this: Our business benefits directly if customers spend more time with our product.

Example of an Attention oriented North Star Metric:

You are playing the Transaction Game…If you find yourself saying this: Our business benefits directly if customers participate in the economy using our product.

You are playing the Productivity Game…If you find yourself saying this: Our business benefits directly if customers efficiently accomplish tasks using our product. Efficiency and achievement are important to us.

Workshop Activity: What Makes a Good (and Bad) North Star

Who to Include

One activity we’ve found fruitful is to spend a few minutes brainstorming what would be a terrible North Star for your company

Workshop Discussion: The Structure of the North Star and the Product Formula

Think About Your North Star as a Formula

consider the things that you, the product team, can truly influence

A Common Input Pattern: Breadth, Depth, Frequency, and Efficiency

Workshop Activity: Build a North Star for Another Product

Workshop Activity: Collect Candidates for Your Own North Star

Rather than everyone collaborating aloud, we like to use a silent brainstorming technique for this. Ask everyone on the North Star team to spend 5-10 minutes in a silent brainstorm with the blank worksheet

Pair and Share

Finally, share candidates with the group

You also can develop options quickly with the help of a fill-in-the-blank template.

“I would be more confident that our current product strategy was working to set us up for sustainable long-term growth, if I observed an increase in (insert customer characteristic behavior or charateristic), which we could measure by (insert formula and tactics for measuring).”

Conclude the Workshop by Converging

coming to agreement and confirming and documenting your decisions. What game are you playing? What are your strongest candidates for a North Star Metric and Inputs?

North Star in Action: Netflix and the North Star

Fifteen years ago... retention was a challenge

the first month retention for new members, during their critical free trial period, was only 88%, which meant that 12% of members were abandoning the service after just one month

realized that retention was a lagging indicator, not a leading indicator.

They learned that if a customer had multiple movies waiting in their queue, that customer had become a more engaged user of the service and was thus far less likely to unsubscribe. So they chose to focus their product work on a very specific metric: the percentage of members who added at least three DVDs to their queue in their first session with the service. (Aha Moment)

At the time, only 60% of Netflix’s customers had three or more DVDs in their queue during the first month

most of their work focused on making the service simpler

Over time, Netflix increased this North Star Metric from 60% to 90%. And this directly influenced first month retention. An improvement of just two percentage points in first month retention (from 88% to 90%) had a significant influence on Netflix’s business results and profitability

Chapter 4. Get Specific: Defining Your North Star

In this chapter you will learn…

• About the two parts of a North Star Metric: the name and the definition.
• How to define your North Star’s inputs.
• How to test your inputs

The Dance of Uncertainty

Don’t get paralyzed by thinking that your North Star needs to be perfect. While it should be precisely defined, it will likely still change and evolve as you learn more

Early stage startups (or companies new to the framework) might find themselves modifying their North Star Metric every 6-12 months. More established organizations shouldn’t need to change their North Star Metric that frequently. Every 12-36 months is more typical.

The Name and Definition

A North Star Metric and each of its inputs should have both a name and a definition

The name of your North Star Metric should be engaging and descriptive

the importance of branding your North Star

A Better Choice: Our North Star Metric: Frequent Content Sharers (FCS). Definition: The number of unique subscribers who share an average of two or more articles per week during the previous twelve week period

When converging on your North Star Metric and inputs, consider the following questions:

most products—especially if you’re thinking about long-term impact—the relationship between the metric and long-term impact are rarely that clear cut.

Amplitude’s North Star Metric, weekly learning users (WLUs), is defined as the count of active Amplitude users who have shared a learning that is consumed by at least two other people in the previous seven days

did we have a bullet-proof case for those precise numbers? The reality: these numbers aren’t magic

The important thing isn’t the exact number, but the combination of customer behaviors that our North Star represents. It’s consistent with our strategy, and we’re open about our uncertainty.

Getting Inputs Right

They are as important to the North Star Framework as the metric is.

A big trap is when teams attempt to move the North Star Metric directly, rather than trying to move inputs that roll up to the North Star

Just like the North Star Metric, the inputs should have both a name and a definition.

Mind-mapping is a helpful technique for identifying inputs and metric

refine the map by combining related concepts

Once you have your inputs defined at a high level, you’ll find it much easier to tackle the challenge of defining an exact metrics for each input.

Testing Your Inputs and North Star

Input Test 1. The Greenfield Test

How many opportunities can you come up with in 2 minutes to influence this input?

If the team quickly runs out of ideas, then you might need higher level inputs. If they are swimming in ideas, many of them overly broad, then you should get more specific

Input Test 2. The Roadmap Check

Make a list of current initiatives and discuss how they could influence the inputs you have chosen.

These Activities May Feel Circular! That’s Okay.

Sharing Your Work

Take Time to Celebrate

North Star in Action: Amplitude’s North Star Metric and Inputs

Amplitude’s North Star is designed around a North Star Metric that Amplitude calls Weekly Learning Users (WLU). Amplitude defines Weekly Learning Users (WLUs) as the count of active Amplitude users who have shared a learning that is consumed by at least two other people in the previous seven days.

This North Star represents Amplitude’s most valuable user persona, the Advocate

Amplitude’s product strategy is to be learning-driven, providing insights to cross-functional teams. WLUs represent this strategy. The core belief underpinning this North Star Metric is that Amplitude is deliberate learning that compounds with collaboration.

Amplitude has identified three inputs

Activated Organizations (AO). These are organizations that have exceeded five WLUs.

Broadcasted Learnings (BL). These are things like charts, dashboards, and notebooks consumed by two or more people in a seven day period

Consumption of Learnings (CoL). These describe the total reach of the BLs in an organization.

better able to evaluate and prioritize feature requests and deliver a product that satisfies customers and builds Amplitude’s business. For example, after implementing the WLUs as their North Star Metric, Abbie’s team evaluated a request for a “Bulk Editing of Records” feature, a common request in B2B products. Because of the North Star, they asked “How does this impact Broadcasted Learnings, Consumption of Learnings, and WLUs?” By asking that question, they were able to see past the surface request to understand the deeper impact on how Amplitude’s users create and share insights.

The team discovered they could solve the customer problem behind the bulk editing of records request and drive the inputs to the North Star Metric with a new “templating” feature.

Chapter 5. Troubleshooting: Fixing Issues and Avoiding Traps

In this chapter, you will learn…

• The two categories of problems you might experience as you build your North Star.
• How to improve shared understanding by mapping beliefs, aligning your North Star to your product vision, and identifying your key value exchanges.
• How to identify and avoid common traps.

Category 1: The team needs shared understanding. If you’re experiencing this, try:

• Surfacing beliefs
• Connecting the North Star to your product vision
• Understanding key value exchanges

Category 2: The team needs help avoiding common traps. If you’re experiencing this, watch out for:

• Jumping immediately to “can we measure that?”
• Focusing on the North Star Metric only, not the inputs
• Insisting you need more than one North Star Metric
• Letting current dysfunction overwhelm your ability to improve

Creating Shared Understanding

Beliefs

Assumptions about what your customers value. Assumptions about causation or results of actions.

How to Identify Beliefs that Inform a North Star

independently filling in one or more of these templates

Belief mapping

Developers should explain what they believe will happen if technical debt continues to mount. Designers should outline how they believe that under-investment in UX will result in customer pain.

Connecting the North Star to Your Product Vision

Examples of Product Vision Statements that can Inform a North Star

Hypothetical Vision Statement 1: “For the film aficionado, our documentary streaming service is the world’s most authoritative source of expertly-curated short films, expert commentary, and informed community.”

What we learn from this statement

Questions this statement raises

Hypothetical Vision Statement 2: “For the boutique maker of bottled goods, our label-design app is the most reliable way to produce high-quality but affordable label designs that fit your manufacturing workflow while distinguishing your product on the shelf and your brand in the marketplace.”

*There are many models for writing a vision statement. One simple template was popularized by Geoffrey Moore in Crossing the Chasm:

For [target customer] who [need or opportunity], the [product] is a [product category] that [key benefit]. Unlike [competitive alternative], our product [statement of primary differentiation].*

The North Star and Key Value Exchanges

handful (3-6) of essential actions or events

important moments where your product solves a problem for the customer or enhances a customer’s ability to accomplish a goal.

Avoiding Common Traps and Resolving

1. Jumping Immediately to “Can we measure that?”

2. Focusing on the North Star Metric Only, Not the Inputs

3. Insisting You Need More Than One North Star Metric

in some cases, when a company has distinct lines of business with different customer bases, this might be true. However, the number of times one metric will suffice outnumbers situations that require multiple North Stars by a large margin.

4. Letting Current Dysfunction Overwhelm Your Ability to Improve

Chapter 6. Making the North Star Framework Stick and Changing Your North Star

In this chapter, you will learn…

• How to sense if your North Star is working.
• What traps to watch for as your North Star is established.
• How to re-evaluate and even change your North Star.

How to Sense if Your North Star is Working

should result in improved business performance and happier customers.

Even before that, though, you may observe changes within your compan

When to Change Your North Star

Changing Amplitude’s Original North Star

we decided to use a ‘query’ as our indicator of value

Over time, however, we recognized that this metric wasn’t truly reflecting the type of impact we wanted to have with our customers. Our mission isn’t to help users build better analyses—it’s to help companies build better products.

Evolving the North Star

By customer impact, we meant completing the Build > Measure > Learn loop

We dug into our data to figure out how we could best represent a user completing the loop.

Benefits of this change

In the past six months, we’ve seen a 50% increase in the number of WLUs per active organization.

Keeping Your Momentum

The major problem with gap thinking, as it relates to any change effort, is that teams become vested in a fixed end-point that never materializes

Bloom contrasts gap thinking with present thinking. In present thinking, you recognize the reality of the present and work to change it.

Teams that successfully implement frameworks like the North Star Framework are never “done.”

Chapter 7. Putting the North Star into Action

In this chapter, you will learn…

• How to think about the relationship between your North Star and your daily work.
• About levels of bets and how to place them.
• How to integrate the North Star Framework with other methods and practices, like OKRs, roadmaps, and organizational design.

We call the activities teams use to make their product “the work.”

No matter which way your team works, the key is maintaining a clear connection between your work and your North Star.

Things to Watch Out For

missing out on the important step of defining the opportunity

Connecting the Framework to the Work through Levels of Bets

we’re describing this model to explain important principles and to help teams avoid common pitfalls—not to claim that there is just one right way.

the North Star is joined to a board-like visualization of work underway and in queue. The North Star and the board are connected through a series of what we call bets. Picture the North Star and the board sitting side by side with decreasing levels of bets labeled across the top. (Thinking In Bets)

Different time horizons for different Bet Levels to acknowledge different feedback loop lengths.

• Level 0: North-Star assumptions (1-3 yrs)
• Level 1: Input assumptions (1-3 quarters)
• Level 2: Opportunities/Problems (1-3 mo)
• Level 3: Interventions/solutions (1-3 wks)

A force-ranked queue of opportunities

Changing the language from “To Do, Doing, Done” to “Focus On Next, Focusing, and Review,” and “To Try, Trying, Review” to separate opportunities from experiments and encourage learning.

Notice the connections between the elements of the North Star, and then the connections between the North Star and the items on the board. You can draw similar lines connecting your North Star and working board. We call these connections bets. You are betting that the work or the input will produce the result.

The more distant the bet is from the ultimate goal of business results, the higher the level. Level 0 and Level 1 bets are connection points within the North Star Framework. Level 2 and Level 3 bets connected to work on the board.

Notice how the Burger King example tells a coherent story spanning the one- to three-week work on functionality (the level 3 bets) all the way up to the bets underpinning the connection between the North Star Metric and long-term business results (the level 0 bets).

I personally like the word experiment. It feels rigorous, scientific, and learning-focused. It feels…right, to me. But, over the years I’ve shifted my vocabulary to more often refer to bets, and less to experiments

Executives, who understand concepts like risk, return, investment, and diversification, dropped their resistance.

Tips on Using the North Star Framework with Related Topics

The North Star Framework and OKRs

Try framing OKRs as the impact your level 2 bets will have on one or more inputs.

Some teams find that linking their work to inputs—and setting goals based on the expected impact of their work on inputs—means that they can safely retire OKRs.

The North Star Framework and Roadmaps

In general, the North Star works best when integrated with theme-based roadmaps that account for uncertainty over time.

It can be hard to wean your organization off of prescriptive, timeline- and feature-based roadmaps. Be patient and focus on impact

Try to link all of the “work” on your roadmap to your inputs and North Star no matter what resolution it is (problem, solution, big bet, small bet). While it might be a tad demoralizing to do this with prescriptive, solution-centric projects, by establishing this connection, you are clarifying the impact you hope to generate with the project.

Rather than drafting requirement documents for items on your roadmap, consider developing succinct one-pagers that make your bets explicit and transparent. A roadmap of one-pagers is far more powerful than a roadmap of one-word project/feature names.

The North Star Framework and Prioritization

When prioritizing, consider both the influence of the input on the North Star and the likelihood of the opportunity to drive the input.

A series of small bets or experiments is preferable to one big bet or experiment

Watch out for big batches of work with infrequent opportunities to learn and pivot.

The North Star Framework and Non-Feature Work

imagine the whole company as a value creation system

The goal of such a system is sustainable value creation, which invariably will involve a lot of support systems

This is why we often suggest that teams consider including a system health indicator input in their North Star.

Examples of factors that can drive a health indicator input include system uptime, cycle times, testing and deployment processes, up-to-date tooling, and even the time it takes for a new team member to get up-to-speed.

flow metrics can be valuable early indicators of drag and health issues.

The North Star Framework and Organizational Design

Conclusion

What we like most about the North Star Framework, though, is the way it inspires valuable conversations.

Think of all the decisions your team makes weekly. Hundreds? Thousands? Imagine improving those decisions—big and small—even incrementally. You’ll see better results for you, your team, your company, and your customers.

She didn’t want work to be easier; rather, she wanted her work to have more impact.