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Shopify's North Star Metric

51+-person team · Canada · shopify.com

Their North Star Metric

GMV of merchants

Reconstructed from public sources. Not officially endorsed by Shopify. Request edit

Why this one won

Shopify wins when its merchants win. GMV (gross merchandise volume) captures that alignment in one number. Tools, apps, payments and capital products are all judged by whether they grow merchant GMV. Shopify revenue is a function of GMV, not separate from it.

The Ray

Input metrics that multiply to produce the North Star. Tagged by dimension.

GMV of merchants=Active stores×Avg order value×Orders per store per month×Store time-to-first-sale
B

Active stores

Merchant base

D

Avg order value

Transaction size

F

Orders per store per month

Commercial activity

E

Store time-to-first-sale

Activation speed

What they considered and rejected

MetricWhy it was consideredOutcome
SubscribersNot tied to merchant successEliminated
GMVMerchant success = platform successKept

Lessons learned

If your business model is 'take a percent of what our customers earn,' make the customer's success your metric. The alignment is automatic.

Related North Stars

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