Keeping Eyes on Your North Star

Finding the right north star for your startup’s stage of development is a powerful focusing tool to maximize your progress.

What is unique about the North Star? The North Star is famous for holding nearly still in our sky while the entire northern sky rotates around it. Because it is located nearly at the north celestial pole, the North Star marks the way due north. It was used as a navigational beacon for centuries by seafarers trying to find their way across a trackless and constantly moving ocean.

While leading a startup rarely requires a CEO to navigate the seas without instruments, the idea of a “North Star,” an immutable direction to head, is important. And identifying, applying, and communicating the relevant north star for the startup is one of a CEO’s most critical jobs.

One of the things that makes the North Star a useful reference point is that it is stable. Fixating on a steady goal is much more useful than something more transient. Imagine for a moment the difference between keeping your constantly wave-buffeted ship on course by looking at the North Star or the Sun versus looking at the heaving ocean. Yet often, this is what startup leaders get distracted by – the constantly moving waves (aka problems) that require an immediate response to survive can obscure making steady forward progress in the direction you need to go.

The most crucial step is choosing the right north star for the stage of your startup. You are looking for something that you can use as a navigational beacon to bring the rest of your volatile environment into focus. A goal that provides direction and that can be used to frame and shape day-to-day priority and action decisions into focus. You want the chosen goal to be relevant to what you are working on so it can be used as a decision filter as you consider the dimensions and implications of different paths you might take. 

I find that, for startups, there are some common north star goals that prove helpful as you progress through your development stages. Here are a few examples of north stars I have used across startups at various stages, illustrating how I apply the concept.

Stage 1 Business Concept Development

Before raising money, there is the stage of startup development focused on determining a business concept that is sufficiently attractive to form the foundation of a successful startup. Your north star at this stage is finding a significant unmet need worthy of solving. Of course, identifying the need is only half the equation. You will also need to conceptualize an innovative solution, however, I suggest that it is the strength of the need that is the pivotal focus at this stage. Many resources can be brought to bear on solving a critical need. However, lots of resources cannot make a minor need sufficiently important. Essential in this stage is validating the unmet need’s breadth, depth, and importance to ensure you are building on a firm foundation.

Stage 2 Product Development 

When deep in product development, my north star is on building a product that delivers the customer-affirmed value that addresses the previously identified and validated worthy unmet need. This is the solution side of the problem previously identified. I am using the abstract idea of “customer-affirmed value” for the north star of this stage, however, in actual use, this should be a crisp definition of your product vision.

This specific product vision that achieves the customer-affirmed value provides a filter for constantly evaluating every potential feature addition and design decision to ensure that it supports achieving the desired value dimensions in as cut through and clear a way as possible. For example, when we were developing a market-creating flow cytometer, we needed not to get confused about our vision. Rather than trying to compete on all the fancy features that expensive flow cytometers provided (many lasers, detectors, and other features that only a few customers needed, but which added cost to the product), we stayed laser-focused on a solution that would meet the majority of everyday researchers’ needs. Think of a middle-of-the-road minivan that provides essential transportation. Do not load up that minivan that gets the kids to soccer practice with lots of luxury car features and price your product out of reach of the vast majority of families. Knowing that most flow cytometry only requires two lasers and six detectors, we were able to resist the pressure from some in our market that they just had to have that third laser. We became comfortable suggesting they look to one of our competitors for that specialized need. By saying no to feature creep, we could make something extraordinary that cost a fraction of the competitor’s and dramatically expand the market.

When in product development, invest in developing a very clear vision (north star) for what the product is intended to do. Then your north star can keep your team on track, help avoid overbuilding extraneous features, and enable getting to a minimum viable product as quickly as possible.

Stage 3 Commercial Development 

Once you are launching your product, proving product-market fit, and beginning to scale commercially, the north star is almost always revenue growth. While revenue is not the only thing, pursuing it as the primary focus often brings alignment to the other elements required for successful commercial development. For example, to achieve revenue growth, you must be able to attract potential customers, deliver a valuable product, have someone decide it is worthwhile to pay for it, install and support your product effectively, generate repeat business and positive reviews. And you must build processes to do so repeatedly so that revenue grows over time. Revenue growth proves that you have achieved product-market fit and that what you have built is valuable enough for customers to pay for. If you can achieve accelerating revenue growth (while keeping costs under control), you have the makings of an attractive and sustainable business.

Remember that these are just examples of possible north stars for a startup. There certainly are other possibilities. What is essential is to remember that you are looking to identify the single most important focus for the stage you are in that can be used to drive prioritization decisions. Then keep your eyes on that critical success factor. If you find yourself wanting to make a list of north stars, look for the next level up. What does everything important on your list lead to? When you find that unifying theme, you have found your north star. Use your north star as a decision filter for what to spend your precious time and resources on.

My point does not mean that there will not be some secondary priorities that have to be dealt with along the way. Perhaps finding a good attorney, setting up a payroll system, or setting up the software repository needs to be addressed. However, these worthy tasks are secondary to the most important things (north star components), and your whole team needs to be clear that prioritizing tasks related to the north star needs to be emphasized and treated with a sense of urgency.

Make sure everyone on the team knows what the north star is. Keep your and your team’s focus on your north star to generate value as rapidly as possible.