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A/B tests must have proper sample size and significance thresholds.
// ❌ FORBIDDEN: Drawing conclusions too early// "After 100 users, variant B has 5% higher conversion!"// This is not statistically significant.// ✅ REQUIRED: Proper experiment setupconst experimentConfig = {
name: 'new_checkout_flow',
hypothesis: 'New flow increases conversion by 10%',
// Statistical requirementssignificance_level: 0.05, // 95% confidencepower: 0.80, // 80% powerminimum_detectable_effect: 0.10, // 10% lift// Calculated sample sizesample_size_per_variant: 3842,
// Guardrailsmax_duration_days: 14,
stop_if_degradation: -0.05, // Stop if 5% worse
};
Quick Reference
When to Use What
Scenario
Framework/Tool
Key Metric
Overall product health
North Star Metric
Time spent listening (Spotify), Nights booked (Airbnb)
Growth optimization
AARRR (Pirate Metrics)
Conversion rates per stage
Feature validation
A/B Testing
Statistical significance (p < 0.05)
User engagement
Cohort Analysis
Day 1/7/30 retention rates
Conversion optimization
Funnel Analysis
Drop-off rates per step
Feature impact
Attribution Modeling
Multi-touch attribution
Experiment success
Statistical Testing
Power, significance, effect size
North Star Metric
Definition
A North Star Metric is the one metric that best captures the core value your product delivers to customers. When this metric grows sustainably, your business succeeds.
Characteristics of Good NSMs
✓ Captures product value delivery
✓ Correlates with revenue/growth
✓ Measurable and trackable
✓ Movable by product/engineering
✓ Understandable by entire org
✓ Leading (not lagging) indicator
Examples by Company
Company
North Star Metric
Why It Works
Spotify
Time Spent Listening
Core value = music enjoyment
Airbnb
Nights Booked
Revenue driver + value delivered
Slack
Daily Active Teams
Engagement = product stickiness
Facebook
Monthly Active Users
Network effect foundation
Amplitude
Weekly Learning Users
Value = analytics insights
Dropbox
Active Users Sharing Files
Core product behavior
NSM Framework
North Star Metric
↓
┌──────┴──────┬──────────┬──────────┐
│ │ │ │
Input 1 Input 2 Input 3 Input 4
(Supporting metrics that drive NSM)
Example: Spotify
NSM: Time Spent Listening
├── Daily Active Users
├── Playlists Created
├── Songs Added to Library
└── Share/Social Actions
How to Define Your NSM
Identify core value proposition
What job does your product do for users?
When do users get "aha!" moment?
Find the metric that represents this value
Transaction completed? (e.g., Nights Booked)
Time engaged? (e.g., Time Listening)
Content created? (e.g., Messages Sent)
Validate it correlates with business success
Does NSM increase → revenue increases?
Can product changes move this metric?
Define supporting input metrics
What user behaviors drive NSM?
Break into 3-5 key inputs
AARRR Framework (Pirate Metrics)
Overview
The AARRR framework tracks the customer lifecycle across five stages:
• Day 1/7/30 retention rate
• Weekly/Monthly active users (WAU/MAU)
• Churn rate
• Usage frequency
• Feature stickiness (DAU/MAU)
Retention Calculation:
Day X Retention = Users returning on Day X / Total users in cohort
Example:
Cohort: 1000 users signed up Jan 1
Day 7: 300 returned
Day 7 Retention = 300/1000 = 30%
• Viral coefficient (K-factor)
• Referral rate (% users referring)
• Invites sent per user
• Invite conversion rate
• Net Promoter Score (NPS)
Viral Coefficient:
K = (% users who refer) × (avg invites per user) × (invite conversion rate)
Example:
K = 0.20 × 5 × 0.30 = 0.30
K > 1: Viral growth (each user brings >1 new user)
K < 1: Need paid acquisition
• Monthly Recurring Revenue (MRR)
• Average Revenue Per User (ARPU)
• Customer Lifetime Value (LTV)
• LTV:CAC ratio
• Conversion to paid
• Revenue churn
## Acquisition- Total visitors: 50,000
- Sign-ups: 2,500 (5% conversion)
- Top channels: Organic (40%), Paid (30%), Referral (20%)
## Activation- Activated users: 1,750 (70% of sign-ups)
- Time to activation: 3.2 hours (median)
- Activation funnel drop-off: 30% at setup step 2
## Retention- Day 1: 60%
- Day 7: 35%
- Day 30: 20%
- Churn: 5%/month
## Referral- K-factor: 0.4
- Users referring: 15%
- Invites per user: 4.2
- Invite conversion: 25%
## Revenue- MRR: $125,000
- ARPU: $50
- LTV: $800
- LTV:CAC: 4:1
- Conversion to paid: 25%
Extended Reference
Detailed material starting at ## Key Metrics & Formulas has been moved to reference/extended.md to keep this skill concise. Load that reference when the task requires the moved examples, command catalogs, checklists, platform details, or implementation templates.