AirBnB’s North Star metric (NSM) evolved over time, changing from revenue per booked unit to number of listings. They eventually settled on number of nights booked, which, Nick Chasinov points out, was “a data point that reflected the fundamental value they delivered to both hosts and guests.” They believed that this was a sign of a healthy business; if customers are booking from listings, the business is functioning as it should. AirBnB could choose to overly focus on this, rather than think about customer satisfaction or loyalty. The team could game this by improving marketing strategies to target specific customer segments, optimizing pricing algorithms, and enhancing search algorithms to provide more relevant results.
Due to Facebook’s high churn rates, the early growth team settled on an NSM that focused on “network density.” They figured that “hitting 7 friends created a critical mass where the news feed suddenly felt alive.” The team could game it by improving tools like “People You May Know,” as well as having posts you’re likely to resonate with show up on your feed, creating echo chamber effects. With the creation of echo chambers, users could be more likely “to engage with, and share, information that confirms their beliefs,” as well as befriend those users.
Slack strayed from typical enterprise software sales strategy, and because of this, they understood their NSM of number of teams that sent 2,000 messages as a proxy for how much a team stuck with a product. This is the hardest to game, as someone could sign up, but 2,000 messages means that people are likely satisfied. How a team could game this would be to count low-quality messages, like bot messages or counting inactive teams forever, versus # of the teams in the past year.
