PSP 5: North Star Metrics

Airbnb was steered by nights booked as it gave the team a better way to evaluate performance than revenue, as it showed actual use of the product instead of reflecting the underlying pricing or exchange rate fluctuations. This also gave the team a better metric to evaluate whether changes to the product was increasing actual use in the market. To game it, the team might give out extra free nights that would be unsustainable for the business, or loosen quality checks to get more listings on the platform. That would damage the quality, business model, and trust between the user and the product. 

 

Facebook was steered by 7 friends in 10 days since they realized that having friends on the platform would lead to retention. Thhe 10 day deadline would help make sure new users experienced the value on the platform shortly within joining. It was a proxy for how connected people felt on facebook, and how much they could interact online. To game this, the team might require 7 connections in onboarding, or push random friend requests. This would make connections less meaningful and damage the product. 

 

For slack, they picked the messages sent at 2,000 based off of the data from which companies stuck with the product and which didn’t. The founder said that “regardless of any other factor, after 2,000 messages, 93% of those customers are still using Slack today.” This was a proxy for a team actually using slack and integrating it in their workflow. A team might game it by placing a word limit on messages, or make it hard to send large blast messages. That would make it more inconvenient to use the product, damaging the user experience.



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