How to choose signals that drive real progress, not false confidence
Leaders love the idea of a single, unifying metric. One number that cuts through dashboards, aligns the team, and tells you if you’re making progress.
That is what a North Star metric is meant to do.
In practice, many North Star metrics quietly mislead. They trend in the right direction, look impressive in investor updates, and create a sense of momentum.
Underneath however, they often fail to answer the questions that actually matter: are customers getting real value, and is the business becoming stronger over time?
This article explains why so many North Star metrics fail, how to spot vanity metrics in disguise, and how to design North Stars that reflect genuine value creation. It also shows how and when to revise your North Star as the company evolves.
A North Star metric is meant to be useful. At its best, it creates a direct line between customer value and company success.
If the metric improves, customers are better off in a meaningful way, and the business becomes more likely to grow sustainably as a result.
That means a true North Star metric should do three things at once:
This is where many companies go wrong. They treat the North Star as a reporting metric rather than a behavioural one. If it does not change what teams prioritise, what gets built, or what gets deprioritised, it is not doing its job.
A good North Star should occasionally make leadership uncomfortable. That discomfort is often a signal that the metric is telling the truth.
A North Star metric exists to shape behaviour and decisions, not just to summarise performance.
Most misleading North Star metrics are chosen for understandable reasons.
They are easy to measure. They already exist in analytics tools. They move quickly. They provide early validation when confidence is fragile and pressure is high.
The problem is that convenience rarely correlates with truth.
Companies often default to metrics that capture activity rather than impact. Sign-ups feel like growth. Downloads feel like demand. Revenue feels definitive.
However, none of these tell you whether customers are succeeding or whether the business is compounding value.
There are a few recurring patterns behind bad North Stars:
As Matt Lerner regularly highlights in his writing, many so-called growth problems are actually measurement problems. Teams execute well against the wrong goal, then wonder why results plateau.
If your North Star makes you feel confident but does not change hard decisions, it is probably misleading.
Some metrics are not inherently bad, but are often promoted to North Star status when they should not be.
Common examples include:
These numbers can be useful inputs or diagnostic signals. The issue arises when they are treated as proxies for value creation.
For example, user growth without engagement tells you nothing about whether the product is solving a real problem.
Revenue growth without retention can hide churn, discounting, or unsustainable acquisition tactics. Headcount growth can feel like momentum while quietly introducing complexity and inefficiency.
A useful rule of thumb is this: if the metric can be improved without improving the customer experience, it is a dangerous North Star.
Essentially, a North Star should be hard to move without delivering real customer value.
Despite differences in business models, strong North Star metrics share a set of underlying characteristics.
They tend to be:
Growth practitioners often describe the best North Stars as scaled versions of the customer’s ‘aha moment’. That is the point at which a user experiences enough value to justify coming back.
As Matt Lerner argues, growth accelerates when companies identify this moment and optimise for more people reaching it, more quickly, and more consistently.
In practice, this might look like:
These metrics do not just count users. They measure success.
The closer your North Star is to customer success, the more reliable it becomes.
One of the most damaging assumptions founders make is that a North Star metric should remain fixed forever.
In reality, North Stars are stage-dependent. A metric that is healthy at seed stage can become actively misleading at scale.
At this stage, the priority is learning whether you are solving a real problem.
Strong North Stars here often focus on:
Revenue is usually a lagging signal at this point. Obsessing over it too early can mask weak product-market fit.
Once demand is validated, the focus shifts to repeatability.
North Stars at this stage often centre on:
Growth without retention is not success. It is borrowed time.
As the business matures, the North Star often needs to reflect quality and efficiency.
Examples include:
If your business has changed but your North Star has not, misalignment may be setting in.
Many founders resist changing their North Star because they fear confusion or loss of focus. In reality, clarity erodes faster when metrics are left unchanged despite shifting realities.
A healthy evolution process includes:
Metrics are tools, not commitments. When they stop producing good decisions, they should be replaced.
The mistake is not changing your North Star. The mistake is pretending it still works.
Before committing to a North Star, pressure-test it with a few direct questions:
If the answers are vague, defensive, or overly qualified, keep digging. A strong North Star should survive uncomfortable scrutiny.
Metrics shape behaviour. Teams build what gets measured. Leaders reinforce what gets praised.
A misleading North Star quietly trains the organisation to optimise for the wrong things. Over time, this leads to bloated products, burnt-out teams, and cultures that prioritise optics over outcomes.
For founders, this is not just an analytics issue. It is a leadership responsibility.
Your North Star metric is a cultural signal, not just a growth lever.
The best North Star metrics should provide clarity.
They surface friction early. They expose weak retention. They force better conversations about value and priorities. That is precisely why they work.
If your North Star never challenges your assumptions, it is probably not doing its job.
Audit your current North Star. Ask what it truly measures, what it hides, and whether it still reflects how your company creates value today.
An employee share scheme, managed through Vestd, is one way to link your company’s success directly to your team’s rewards and to turn growth into a shared goal.
Book a call to find out how.