As mentioned in CS177, Christina Wodtke calls a North Star the “single metric that captures core value delivered to customers.” It is a leading indicator that “makes the news.” However, as Airbnb, Facebook and Slack show, every North Star can be gamed.
Airbnb’s North Star was nights booked. Revenue could be affected by exchange rates, trip length and what hosts charge, so, as Lenny Rachitsky put it, they picked a metric “one level removed.” It represented a match between a guest and a host, the core value the company provides. However, heavy discounts or one-night stays could game it, lowering trip quality and host income.
Facebook’s North Star was 7 friends in 10 days, the number at which users were likely to stick around, according to Chamath Palihapitiya’s growth team. It represented an “aha moment”: a News Feed populated by people users care about. However, it could be gamed by pushing users to friend people they do not care about, filling their feeds with those people.
Slack’s North Star was 2,000 messages sent. CEO Stewart Butterfield explained that a team that sent this many had “really tried” Slack, and 93% of these teams kept using it. It represented a team using Slack together. However, counting pings from bots and integrations could game it.
As Goodhart’s Law states, “When a measure becomes a target, it ceases to be a good measure.” Wodtke’s golden rule is “If a metric won’t change how you behave, it’s a bad metric.” However, once it changes behaviour, people may focus on the metric rather than what it represents. As Chamath stated, optimising a stand-in can “destroy a lot of value,” so it is important to keep in mind what behaviour a North Star represents.
