Understanding North Star and L1 and L2 Metric.

The North Star Metric (NSM) is a strategic metric that measures the value a product delivers to its users. It’s the one metric that encapsulates the ultimate goal of a product and represents its success. In essence, it’s the guiding light that keeps product teams focused on the most important outcomes they want to achieve.

The NSM should be unique to each product and can vary depending on the business model, customer segment, and stage of the product’s lifecycle. For example, the NSM for a social media platform might be “daily active users,” while for a subscription-based service, it could be “monthly recurring revenue.”

L1 metric is like measuring the total number of mistakes or errors the product has. For example, if a product has a lot of bugs or glitches, its L1 metric will be high.

L2 metric is like measuring the magnitude of the mistakes or errors the product has. For example, if a product has a few critical bugs that prevent users from completing a task, its L2 metric will be high.

In simpler words, L1 and L2 metrics in product management are like ways to measure how many and how big the mistakes or errors a product has, so the product team can work on fixing them and improving the product’s performance.

| Let’s Understand this metric by explaining it to a five year old with a example.

Imagine you have a lemonade stand and you want to make a lot of money by selling lemonade to your customers. Your North Star Metric would be the total amount of money you make. It’s like the main goal you have in mind — you want to make as much money as possible.

Now, let’s say you have a recipe for your lemonade and you want to make sure it tastes good. You could use L1 and L2 metrics to measure how close your actual recipe is to the perfect recipe. L1 would be like measuring the difference between the actual recipe and the perfect recipe by adding up how much of each ingredient you need to change. L2 would be like measuring the difference between the actual recipe and the perfect recipe by looking at how far away the ingredients are from each other on a graph.

So, in summary, the North Star Metric is like the big goal you want to achieve, and L1 and L2 metrics are like tools you can use to make sure your lemonade recipe tastes just right.