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If the ultimate business goal is revenue, the product team's main metrics can’t be about revenue. This is because the primary function of OKRs is not to qualify for a bigger bonus, a promotion or personal validation. They should be used as a tool unjudgementally to *indicate* whether the team’s work is generating the right outcome for users. It gives clues to whether progress made is resonating with customers.
The focus on customer centric metrics eliminates the distraction and worry for the product team. It means they can be laser focussed on building the sharpist product to solve the specific user problems that have been identified by the team to be the most important to solve.
We're Zipping Up Into a New Operational Onesie.
Product Breaks
The North Star Metric:
Delivering high value to your market is not just a matter of altruism; it’s genuinely the best thing you can do for your business. It’s far easier to acquire and retain customers with high-value products, you can charge more for them, and they keep competitors at bay. Many modern product companies understand this and consider growing value-to-customer their most important goal. That’s where the North Star Metric comes in. A North Star Metric (NSM) is a number that sums up the core value we deliver to the market. In the words of growth expert Sean Ellis, it’s your value footprint.
Evidence-Guided
Itamar Gilad
Often, in his work advising companies on the Lean Startup methodology, he meets executives at large enterprises who want to kill small experiments—saplings in this analogy—because they don’t yet “move the needle,” meaning they’re not generating, say, $100 million in revenue, enough to make a difference for the business. They’re not yet giant trees. Eric points out, sure, the experiment is not yet generating that level of revenue, but it’s impossible to know which new experiments will be the next big $100 million line of business. “If you knew which ideas would be hits, of course you’d only do those. But of course, nobody knows ahead of time, so you have to be willing to plant a lot of seeds and watch them grow.” When they start to sprout, don’t step on them, citing how small they are. Rather, water them and give them sunlight. Or, in corporate-speak, invest more.
Ask Your Developer
Jeff Lawson
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