“North Star & The Magic Moment” — not a band name, rather 2 of my favorite points from Alex Schultz’s Startupclass talk.

Link to his lecture:

What is the North Star in startupology — it is the single metric which is used to guide the building of your company.

Alex noted that as you are managing growth, you cannot “control” everyone on your team. You can certainly “control” one or two by giving them direct orders, but the others you will be “influencing”. So how do you make sure your team is working towards a common goal when goals are seemingly endless for a startup??? New user signups, monthly active users, revenue, etc. You must give the company ONE metric that guides each of their actions, so that when they sit down to discuss features, marketing, etc — they know they end goal.

Mark Zuckberberg was notable because he did not use “registered users” like many competitors at the time he used “monthly active users”. He used it as an internal benchmark and published that number publicly so that Facebook would be held accountable.

Yam published a “daily sends number”, AirBnB uses “nights booked”, ebay uses “gross merchandized volume” (how much stuff did people buy through ebay?).

What is the Magic Moment?

That moment when a user truly understands the value of your application and wants to use it again. For Facebook, it’s a friend showing up in your news feed for the first time. For ebay it’s seeing that thing you want to buy.

You need to drive to that magic moment that gets users stuck on your service.

Why are the North Star and the Magic Moment so important?

Your team is now pushing towards that North Star. Every feature works towards that goal. And relatedly, that goal seeking is supported by driving your users to that magic moment where they go from simply a signup to an active user. So they want to use the service and recommend it to their friends. Those combine into an improved retention rate. The above “retention graph” shows percent active users in comparison to the days from their cohorts’ signup date. You need this to asymptote — level off so that users are becoming lifelong users.

I highly recommend watching this lecture. You can also read the books that Alex gets for every new member of his team:

• Viral Loop — Adam L Penenberg
• Ogilvy on Advertising

As always, questions or comments — interact with me via @STHoward.