Opinion

The second most important metric for every company
Sree Vijaykumar
Sree Vijaykumar
From the Editor's Desk

The second most important metric for every company
Let's start by clarifying the most important metric for every company. It is the North Star Metric (NSM), which Sean Ellis elegantly defines as the "single metric that best captures the core value that your product delivers to customers." Facebook's NSM is Daily Active Users (DAUs), which captures value delivered to users; Square's NSM is Gross Processing Volume (GPV), which captures value delivered to sellers; AirBnB's NSM is Nights Booked, which (since AirBnB is a marketplace) captures value delivered to both hosts and guests. The North Star Metric is necessary and essential for a company to align its strategy, plans and people around. When company leaders set internal goals or talk publicly about the company's growth, they do so in terms of the NSM. But the NSM is not sufficient. Read more

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