In business terminology, the "North Star" is a term used to refer to a singular, overarching goal or objective that guides a company's decision-making and strategy. It is the guiding principle that helps the company stay focused on what is most important and drives the company towards achieving its long-term vision.
The North Star concept is often used in agile and lean startup methodologies, where it is seen as a critical tool for staying focused on what matters most, avoiding distractions, and making effective decisions in the face of uncertainty. By identifying a clear North Star, companies can more easily align their efforts, stay motivated, and measure their progress towards their ultimate goals.
For some companies, the North Star is expressed in terms of a key metric, or set of metrics, that the company tracks and seeks to optimize. These metrics might include customer satisfaction, revenue growth, or market share, for example. The North Star is typically tied to the company's overall mission and vision, and represents the key outcome that the company is striving to achieve.
Here is an example of a North Star metric: For Airbnb, their North Star metric is "nights booked". This metric is used to track the company's success in connecting travelers with unique and affordable accommodation options. By focusing on this metric, Airbnb is able to measure the effectiveness of its platform, make data-driven decisions to improve user experience, and stay focused on its mission of providing travelers with a unique and authentic travel experience.