The One Metric That Made Slack, Netflix, and Duolingo Billions

Thousands of startups raise millions of dollars but still stall out or fail after just a few years. Why? Because they're chasing 50 metrics instead of focusing on one core metric. The world's fastest growing companies. They align everyone, their engineering, their sales, their marketing around one single number. It's not just a vanity metric. It's not always just revenue either. But it's called your North Star metric, and it's the compass for scaling with clarity. Today, I'm going to show you how to find yours, track it weekly, and how to use it to drive unstoppable growth. They call it the NSM for short, the North Star Metric. It's the one metric that reflects the core value you deliver to your customers. And when this number grows, your business grows. And it's not just revenue, it's the value your users actually experience. Companies like Facebook and Airbnb and Slack made this famous, and the founders today still use it to rally their teams around what actually matters. You probably heard me talk a lot about you need to measure what matters. It's one of the greatest books ever. I highly recommend you go and pick it up. But how and why does a Northstar metric actually work? Well, most companies get lost in data. They're spread across many spreadsheets. You can go into Everyday Entrepreneur and see how we formatted our scorecard to actually learn about what metrics matter and what you should be tracking week over week, month over month, quarterly, annually, etc. And they track like 20 or 100 KPIs. And then they wonder why nothing ever actually gets done. There should only be a few that really, really matter, like your North Star metrics. The NSM cuts through through all of that noise. And here's what you're going to get out of it. You're going to get clarity. One metric or two metrics, not 50 alignment. Everyone on the team knows exactly what they're moving towards and working on. And then the compounding growth of focusing on one metric for an extended period of time really differentiates the companies that win. In fact, companies with a clearly defined North Star metric usually get 2.1 times more likely to hit all of their growth targets, as well as they're three times more likely to report that their team is aligned or it was improved by the North Star metric. Now, that is real leverage within your business. But knowing your North Star metric is just step one. But tracking it every single week, that's where the magic actually happens. Enter your weekly scorecard. You can go and see a few other videos about this in the everyday entrepreneur or on my YouTube channel. I highly recommend building out a weekly scorecard. I use a weekly scorecard for my personal finances still. And I've been an entrepreneur for 10 years. It was just so valuable within my businesses that I implemented it into my personal life. And so a great scorecard always includes your North Star metric, the number one metric that matters the most, maybe four to six other inputs that drive the signups, the sales, your marketing grows, your product goals, your engineering goals, and then you just have a weekly check in. Are you trending up? Are you trending flat? Are you declining? What are you actually going to do about this? And. And how do you make sure the number keeps going up to the right? And one of my favorite quotes of all time, as Peter Drucker once said, what gets measured gets managed. What gets reviewed gets improved. Scorecards make strategy real. They give you the signals before it's too late. Let's talk about some real world examples of North Star metrics for Facebook. An incredible one. It was Daus Daily active users. And when they started scaling in the 2000s, they didn't focus on ad revenue or signups. All they cared about was daily active users. Because they knew if users came back every single day, they form habits, stay longer, and then they could eventually monetize those users. And at one point, Facebook was growing daily active users by 10 million per month. That laser focus helped Facebook go from a million daily active users in 2004 to 100 million daily active users in 2008. 1 billion daily active users by 2015. And today Meta's platforms have over 3.24 billion daily active users. Across Facebook, Instagram and WhatsApp. They have a trillion dollar market cap. And it all started with their North Star metric of daily active users. Let's move into another one Slack tool we all use every single day. For entrepreneurs, Slack had a deceptively simple metric. Messages sent per team. Why not downloads of Slack? Because downloads didn't actually mean anything. The real value was in the communication happening on the platform. The more messages sent, the deeper the team adoption and the less likely a customer is ever going to leave. Slack saw that when a team had sent nearly 2,000 messages, they were guaranteed to stay. Their laser focus on that usage metric helped them scale from 15,000 daily active users in 2014 to 1.25 million in 2016, 12 million in 2020. And in 2021, Slack was acquired by Salesforce for $27.7 billion. And it wasn't because of their app store ranking or anything. It was because of their retention and depth of use. Another great one. Netflix. What do you think their North Star metric was? Netflix never obsessed over signups or app downloads. Their North Star metric was always hours watched. Why? Because more time equals more value, equals more retention and more profit. And as Netflix shifted from DVDs to streaming, they saw that increased viewing hours predicted the subscriber growth and reduced the churn. The result? In 2011, 2 billion hours were streamed per quarter. By 2016, 6 billion hours per quarter now. Today, 100 billion hours are streamed per year on Netflix. And their obsessive focus drove Netflix revenue from 3.2 billion in 2011 to 4.40 or 50 billion in 2024. Their global subscriber base went from 25 million to 260 million. Households have Netflix now. And their market cap went from $9 billion back in the day to today it's valued at over $250 billion. They scaled by tracking one simple thing. Are people watching? Now, the last real world example is Duolingo. I talk about Duolingo a lot because I think it's an incredible business. Duolingo never prioritized downloads or flashy user growth. Their North Star metric was daily lessons completed because that's what drives habit formation. They found that if users completed just one lesson per day for two weeks, they were 80% more likely to become a long term user. The small behavior compounded into massive outcomes for Duolingo. 300k daily active users in 2012 to 30 million daily active users in 2024. I'm one of those active users. They went public in 2021. They had over $530 million in annual revenue and a market cap of $10 billion. All fueled by one metric. Are people learning and completing one lesson today? So none of these companies scaled by accident. They found one signal that mattered and then they aligned their teams, their product and their strategy around it. And that's the power of a North Star metric. Find yours and you don't just grow, you start to compound. So how do you actually find your North Star metric? I think you should ask yourself three different questions. What outcome does my customer care about the most? Not vanity the actual result. They're hiring you or purchasing your product for what action reflects the value being delivered? What shows that they're succeeding? Like completing one lesson a day or how many hours are they actually watching? Every single day? And then what metric can I track weekly to improve that? Delivery should be measurable, actionable and predictive of the growth of your business. And then a bonus tip. Your North Star metric isn't forever. These things are going to change. As your product evolves, so will your metric. But it should always bring clarity and focus. So once you have defined, your North Star metric becomes the headline of your weekly scorecard. Are we winning or not? What's changing this number and where do we focus? This week, teams that review their North Star metric weekly are four times more likely to hit their quarterly goals. It's not just data, it's actually direction. So in business, what you measure is what you move. Your North Star metric is more than just a number. It's proof of product market fit and a signal for scale. So to recap this whole video, your NSM reflects the core value you deliver. Use a weekly scorecard to track your inputs and progress. Align your team around value, not vanity. I hope this helped you clarify and I hope it helps you scale. Smarter than hit like subscribe join the Everyday Entrepreneur and Mr. Josh Fraser, my YouTube channel here where I have a hundred of the best business lessons that have ever existed and they're just templates that you can go and take and implement into your business. And I just want to say, if you have the time, drop a comment in this video and let me know what the North Star metric of your business is. For my rental properties, it's usually either night stayed or income generated. For my software businesses, it's usually wrapped around user growth and revenue and then it's going to be different for every single business. And this can change and evolve over time, so don't get too sticky with it. But you need to track something every single day. So thank you for joining Hit like and subscribe. Join me next Friday for the next one.