Let’s start with the obvious. You should measure whether your product is actually successful.

That’s not the problem. The mistake I see PM’s make is not that they don’t have a success metric.

Nope. The mistake I see PM’s make is that they have more than one.

Last week, we talked about my marinade recipe. We also talked about how you need 4 ingredients to give you a 360-degree view of your product.

This week, let’s get into the first ingredient: the North Star metric. And why you really need to make sure you only have one.

North Star: A Definition

A north star metric is the answer when your customer asks, “What have you done for me lately?” They are the numerical form of your product’s purpose, of why it should exist in the first place. Like the explorers of old, north stars are also critical to help you prioritize your product’s roadmap.

Strengths / Weaknesses

Your north star is a critical part of your toolbox for two reasons.

1. They tell you if you’re making progress over the long term.

2. They help your team put into words the nebulous feeling if things are going okay or poorly.

The tradeoff is that north stars are very slow to move. Good products tackle big problems. And big problems take time to solve. Your metric is going to have a lot of inertia, and will be slow to react to current events. If you ship an improvement, expect that it’ll take awhile for you to see the effects, possibly weeks, months, or even quarters after.

Because of their slow nature, north stars are best saved for your big picture strategy meetings, think annual or quarterly updates. They can be useful for monthly team updates as well, just set the right expectation that the thing you shipped last week might not be visible just yet.

Some Good Examples

Let’s go over some examples from famous software products.

What makes these examples great is that there is a clear cause/effect relationship between the north star, the company’s mission, and why their customers purchased.

• Company mission = why customers purchased the product

• Company north star = how much progress the company has made towards its mission

That’s our finish line here. That’s the clarity we want to achieve.

How to Find Your North Star

So we have good examples of north stars. How do we find yours?

The way you’re supposed to start is to look at your company’s mission. Is there a way for you to directly measure against that?

If you’re stuck though, that’s okay. In my experience, a north star’s link to your mission is more obvious in hindsight.

The better way to start is to talk to your customers and users. Ask them why they first bought bought your product, why they continue to use your product, and why they keep renewing their subscription. You’re looking for comments like “You were the best one at XXX.” or “I just need you to solve YYY.”

Think back to those previous examples and what those customers would say.

• Shopify: “I wanted to move my store online where my customers were.”

• Box: “I needed to move this file from my coworker’s computer to mine.“

• Greenhouse: “I couldn’t keep track of all the people we were interviewing.“

• Zoom: “I still needed to meet with my team even though we were in lockdown.“

Find that need, and you’ll have your north star.

Stick to Only One

As you’re brainstorming, you might find it exceptionally difficult to boil down your product to one number. You might say to yourself, “Self, my product is really nuanced and it can’t possibly be described by a single number.”

Yeah. Don't do that.

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Having multiple north stars gives everyone licenses to use the most convenient one for their agenda. Do yourself the favor of having clarity of purpose. Stick to one.

tldr

Let’s wrap this up.

• North stars are the answer to “What have you done for your customers lately?”

• They show if you’re making progress over the long term.

• But they’re also really slow to react to current events, taking weeks, months, or even quarters to see results.

• Use them in annual or quarterly strategy meetings. Possibly monthly if people understand that have a delayed picture of whats happening.

• And make sure to only have one.

You got this. Go point your product in the right direction!

Data centric ≠ a spreadsheet.

I don’t know when it happened. Somehow we all collectively decided that being data-centric meant staring at tables full of numbers. As if they were tea leaves in some fortuneteller’s cup.

But I just sound grumpy. And you still need KPIs and metrics to understand what is happening with your product.

Let me show you how to do that. Without the spreadsheet.

I like metaphors. I like systems. So I’m going to give you a metaphor of a system. I’m going to give you a marinade recipe.

A Recipe for a Marinade

A good marinade needs 4 things to work: fat, acid, salt, and spices. It doesn’t matter which ingredient you use. For example, you could use olive oil, yogurt, or buttermilk for your fat; it all works just as well. As long as you have the 4 basic components, you’ll be working with a great marinade. On top of that, you also can now improvise and make something unique and tasty for any occasion.

Product metrics and KPIs are similar. You could try to memorize or look up recipes for every type of product. It would probably work. But you’re stuck painting by numbers, not really understanding why you’re doing what you’re doing.

Today, I want to teach you to really cook. (Well not literally, but like in a product manager sense.) We will …

1. Go over the 4 parts you need to have a solid data-informed KPI metric strategy for any product

2. Give you a working definition for each

3. Discuss how they interplay with each other.

I first learned this from the Fit for Purpose framework (it’s a book too). I’ve made some adjustments. I disagree on some parts. But the core of what I have here is a direct descendant from their methodology.

Let’s get into it.

Your Metric Recipe

The 4 ingredients to every product’s KPIs are …

• A North Star metric

• Improvement metrics

• Health metrics

• Storytelling metrics

The North Star metric is the number version of the purpose of your product, your raison d'etre so to speak. They help you rank your roadmap over the course of months, quarters, and years. Additionally, they show you if you’re gaining traction with your product.

The Improvement metrics are numbers that react quickly to any actions you take (good or ill). These metrics help you prioritize in the short term. When designed well, they help you figure out if the thing you shipped last week actually works.

Health metrics are ranges of numbers that show you the overall health of the product. This includes both technical health (my servers are alive) or UX health (my users are engaged and productive). Its key trait is that this metric is always a range of expected behavior. If your metric goes above or below the expected range, you know you need to investigate.

Storytelling metrics are numbers that are not useful day-to-day. Instead, they help you tell the story of your product. They're also called vanity metrics, usually in a dismissive tone. But I say they are useful to help you inspire coworkers, leadership, and investors.

Better Together

All 4 “ingredients” are necessary to give you a 360-degree view of your product. Together, they answer the questions …

• Are you headed in the right direction over the long term?

• Are you headed in the right direction over the short term?

• Is your product broken?

• And why should I be excited about your product?

tldr

Let’s wrap this up and bring it all together. Here’s a helpful table!

Summary Table. Click here for an accessible version.

Now go forth and be more data-centric!

I’ve learned two things about product management.

1. It’s not something that can be taught in a classroom. No college or university yet offers a bachelor’s degree. The only way to effectively learn is be an apprentice, either working with a mentor or learning on the job.

2. Every job has a little bit of product management. Learning PM skills can and will super-power your career track, even if it’s far away from tech.

No surprise then there’s been an explosion in all sorts of media trying to teach PM skills. There’s a demand for it. And it’s really hard to fill that demand.

I get it. I was the same. I voraciously read every piece of advice I could and totally faked it until I made it in my first PM role. (Sorry Luke. I’m pretty sure this isn’t a surprise though.) More importantly, I had a lot of mentorship and lucky breaks to get me here. I absolutely owe something back. 

My problem is I’m not quite a traditional expert. I don’t have a FAANG company or Ivy League on my resume. I’m not a founder. I’m not the PM of some famous product. I’m not a VP or CPO. I don’t even work for a VC firm.

​​Some days, it feels like I still have a lot to learn - even after almost a decade of dedicated product experience. I haven't been stress-tested in every environment. There’s almost certainly an edge case I haven’t considered.

But maybe that’s the point.

Every PM feels like they barely know what they’re doing, and yet they keep moving forward. They don’t let perfect be the enemy of done. So maybe it is okay that the advice is still a work in progress. Maybe my journey of still trying to figure out can help you in yours. In that spirit, for what I do know, I offer …

• An explanation of what I currently believe (mostly) works

• The few successes, many mistakes, and related reading that got me here

• Any flaws, shortcomings, and disclaimers in my thinking that I’m aware of

• Finally, a writer who is passionate about taking time to explain anything to anyone

It won’t be everything you need to succeed in product management. But I do hope it’ll be enough to get you started.

This is The PM Help Desk, a blog about product management by and for the PM’s (and future PM’s!) still figuring it out.

I’m Andy. I’m a product manager. I’ve been the first PM at 3 companies now. (I know, I’m a masochist.) I tend to work at small startups no one’s heard of. I’ve been a mentee and a mentor, an individual contributor and a people manager. And like you, I’m just trying to make it work as I go.

Subscribe if you like. Bookmark me if you want. But please tell me what you think.

Find me on LinkedIn, andy@thepmhelpdesk.com, my message box, or in the comment section.

Let’s do this.

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