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Amplitude on Growth

Product-led growth with North Star

May 10, 2021

2 min read

Amplitude, a product analytics service, ran a three-part webinar on product growth.

In “Define Your North Star”, they explain what it is, and how to create your North Star.

In the second part, “Optimize for Retention”, they explain why retention is the most important growth metric.

And finally, in “Build for Product-Led Growth”, they dissect personalisation, and explain its role in product growth.

I recommend watching the three product growth videos, as well as their “Product Analytics” series (first, second), and the “Product-Led in Practice” conversation between Natalia B. (Atlassian) and John C. (Amplitude). Each of these is of excellent quality, presents a coherent product development philosophy, and contains a lot of interesting industry statistics and facts – I include some below.

Growth #1: Define Your North Star

The first part helps you understand the framework, how companies like Spotify, Netflix, or Slack have used it, and how you can use it.

Burger King North Star Map

The North Star Framework helps you identify good ideas, before they’re built.

At the start of the product development journey, teams don’t measure the impact of their work. They’re output-focused, and their goal is to ship software.

As teams mature, they start measuring the impact of what they ship. But because teams can’t yet predict which ideas will be successful, both good and bad ideas need to be built.

There’s a sea of ideas and metrics.

The North Star Framework leads you to focus on metrics that represent customer value, and on ideas to improve them, resulting in customer retention and revenue growth.

Spotify has manual and algorithmic playlists, it tracks app launches, searches, and listening time – not all these are leading indicators of retention and revenue.

Spotify gets 90% of its revenue from paid subscribers. They noticed that 55 hours of listening time, was the threshold for becoming and remaining a paid subscriber.

The lack of enjoyable music or podcasts is a barrier for customers to become paid subscribers. Spotify can therefore predict that content personalisation will deliver customer value, increase listening time, and paid subscribers.

Less than 0.01% of products survive

It sounds simple, but the reality is that many set revenue as their goal, but stop short of mapping out what drives revenue, and many focus on acquisition, but allow their churn rate to remain high, undoing their acquisition efforts.

For more in-dept information about the North Star, watch Amplitude’s video, and check out their North Star Playbook.

Growth #2 and #3

The summary for these will come later.

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