The North Star Metric (NSM) is a key performance indicator (KPI) that measures the overall success of a business or product. It is a single metric that is considered to be the most important measure of the business's or product's success and aligns everyone in the organization towards achieving a common goal.
The North Star Metric is typically derived from the business or product's value proposition and represents the ultimate goal of the organization. It is a metric that is not only important to the company's bottom line, but also provides value to its customers.
For example, for a social media platform, the North Star Metric could be the number of daily active users (DAU), as this metric directly correlates to the platform's overall success. By focusing on increasing the DAU metric, the company can align its efforts towards improving user engagement, retention, and satisfaction.
The North Star Metric is often used in conjunction with other metrics and analytics to gain a comprehensive understanding of a business's or product's performance. It helps organizations prioritize their efforts and ensure that everyone is working towards a common goal.
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