Achieving Sustainable Competitive Advantage and Choosing the Right North Star Metric

Aviral Vaid

Hatched by Aviral Vaid

Oct 09, 2023

4 min read


Achieving Sustainable Competitive Advantage and Choosing the Right North Star Metric


In the fast-paced world of business, it is crucial for companies to establish a sustainable competitive advantage to stay ahead of the competition. However, the challenge lies in finding unique ways to differentiate oneself from competitors and create lasting value. Additionally, choosing the right North Star Metric is essential for tracking progress and aligning goals. In this article, we will explore strategies for achieving sustainable competitive advantage and provide insights into selecting the most suitable North Star Metric for your business.

Creating a Culture of Innovation and Learning:

One of the key factors in sustaining a competitive advantage is maintaining a culture of innovation and continuous learning. By doubling the number of experiments conducted per year, companies can significantly enhance their inventiveness and adaptability. This requires creating an environment where employees are encouraged to take risks and learn from failures without fear of retribution. By fostering a culture that values experimentation, companies can uncover unique insights and stay ahead of the competition.

Understanding Customer Experience and Needs:

To maintain a sustainable competitive advantage, it is crucial to understand how customers experience your product and identify the problems they need solving. Often, there is a bias called "the curse of knowledge," where experienced individuals fail to recognize that others may not see the world through the same lens. By bridging this gap and gaining a deep understanding of customer needs, businesses can tailor their products and services to provide maximum value. This customer-centric approach ensures that companies are solving the right problems and meeting the evolving needs of their target audience.

The Power of Patience:

In a world driven by instant gratification, the ability to wait longer than competitors can be a significant competitive advantage. By being patient and taking a long-term perspective, companies can make strategic decisions that may not yield immediate results but have a profound impact in the future. This advantage is independent of intelligence or skill and can help businesses build a solid foundation for sustained success.

Choosing Your North Star Metric:

Selecting the right North Star Metric is crucial for tracking progress and aligning goals. There are six categories of North Star Metrics to consider: revenue, customer growth, consumption growth, engagement growth, growth efficiency, and user experience. The choice of metric depends on various factors such as business model, product growth, and product usage. For example, marketplaces and platforms often focus on consumption growth, while paid-growth driven businesses prioritize growth efficiency. It is essential to refine the ideal North Star Metric based on your specific business needs.

Aligning Metrics with Customer Jobs to Be Done:

An alternative approach to choosing the North Star Metric is to consider the jobs users hire your product to do. The metric should measure what matters most in fulfilling these jobs for the customer. Focusing solely on revenue goals too early can lead to suboptimal decisions and uninspiring goals for the team. Companies with multiple products or a focus on quality may have multiple North Star Metrics. It is crucial to align the chosen metric with the overall mission of the company to inspire and motivate employees.

Actionable Advice:

  • 1. Foster a culture of innovation and learning by encouraging experimentation and embracing failure as an opportunity for growth. Provide employees with the freedom to explore new ideas and take risks without fear of retribution.
  • 2. Gain a deep understanding of customer needs by actively seeking feedback, conducting user research, and continuously monitoring customer experience. This customer-centric approach will ensure that your products and services deliver maximum value.
  • 3. When choosing your North Star Metric, consider both the short-term and long-term impact. Align the metric with your business model, product growth, and customer jobs to be done. Remember to calibrate the input metrics that drive your North Star Metric to enable concrete ideas and goal alignment.


Achieving a sustainable competitive advantage requires a combination of innovation, customer-centricity, and strategic decision-making. By fostering a culture of experimentation, understanding customer needs, and choosing the right North Star Metric, companies can position themselves for long-term success. Remember, patience and a focus on delivering value to customers are essential ingredients for achieving sustainable competitive advantage in today's dynamic business landscape.

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