Quiz Answer to:
28
Growth North Star Metric (OMTM)
Q)
For a marketplace platform (e.g., Uber or Airbnb), what would you select as the North Star Metric to drive growth, and why? How would you break this metric down into sub-metrics to ensure that every part of the business is aligned toward driving growth?
Short Answer:
For a marketplace platform like Uber or Airbnb, the ideal North Star Metric (NSM) is completed transactions (e.g., rides completed or bookings made). This metric reflects the platform’s ability to match supply and demand while driving revenue. Break down this NSM into sub-metrics like active providers, active users, matching rate, and retention. Each team (supply, demand, product, operations) should focus on optimizing their respective metrics, ensuring alignment toward the NSM. Track completed transactions, churn rates, and user satisfaction to monitor growth.
Detailed Answer:
Defining the North Star Metric (NSM)
What is a North Star Metric?:
The North Star Metric (NSM) is the single most important metric that best captures the core value your product delivers to customers. It guides overall business growth by focusing on customer value and ensuring all teams are aligned toward the same goal.
For marketplace platforms like Uber or Airbnb, the NSM should reflect both the demand (customer side) and supply (provider side), ensuring that the platform’s core value is delivered effectively at scale.
Recommended NSM for a Marketplace Platform: