Everyone in the startup world talks about your North Star and Magic Moment – but what are they? Why do they matter? And how do you both find your missing piece and use that insight to grow faster?

How your North Star and Magic Moment can propel both your Startup user / customer growth and fund raising!

Find your North Star and Magic Moment

(Note, this article is part of a series of three articles; the other two focus on Growth Hacking and Seed Fundraising in Europe)

Okay startup founders, have you ever experienced that special feeling when you near completion of a complex puzzle? You know, where the pieces seem to snap home, without effort, as if your hand is guided by some external force?

Or, if puzzles aren’t your thing, then after a long long drive, the car seems to propel itself. The car has a life of its own. It knows where it wants to go and you are just the steady hand that obeys its command?

That’s how you feel the moment you discover the Missing Piece for your Startup’s Growth. That serendipitous insight that can propel your startup to the next stage of growth with less effort and less stress.

So, grab a cup of tea or coffee, this is a long read — but I promise, it will be worth it:

North Star and Magic Moment

What we are looking for — and I will help you describe it and then begin to find it — consists of multiple parts. It is the simple essence or singular focus (North Star, if you like) that you need to discover to raise funding. And, at the same time, drive your user and customer growth.

Note. It doesn’t matter whether you grow your startup through investors’ money, your own money or customers’ money. Your ability to identify and stay headed towards your North Star is the essence of a successful startup.

Oh, and of course, the fun bit is that startup North Stars tend to drift and move. So, the ‘what is our North Star’ is a question to ask *repeatedly*. (Sorry about that).

So, ask ‘what is our North Star?’ and also ‘will it always be this North Star?’ too.

Essentially, if it isn’t clear what you are focused on, then neither you, nor anyone else frankly, will want (or should) invest. And customers will struggle to buy your products because they will remain confused or uncertain.

(I do allow exceptions to this rule, for instance, if your startup is still in idea stage and you are figuring stuff out. However, until you pass this stage, heavy investment is unwise.)

Okay, North Star, what *exactly* do I mean? Okay, let me take you through a few steps to explain this:

Growth Hackers Formula

Growth Hackers use a formula which can help . It can be adapted for any startup to helps us focus on what matters most:

Growth = Top of the Funnel x Magic Moments x Product

I’ll define each part below. But, firstly, note how each part magnifies the total Growth. That means if you build a unique Product but fail to create Magic Moments or Top of the Funnel engagement, you will see zero results! Likewise, great marketers without a great Product will fail too.

So, let’s define these:

Top of the funnel

Top of the funnel is essentially how suspects become prospects by connecting to your business. In marketing we talk about funnels — as we seek to bring as many prospects through the funnel and to the ultimate destination of building retained users or repeat customers.

How you defined the point of connection is up to you and your startup. So, for a shop, it might be customers coming through the door; if are selling a complex service, then an email list is essential (like this one). If you are a media heavy company then prioritise YouTube channel subscribers etc…

Product

And your Product, is well, your Product. Albeit here we really mean how good is your product / service at bringing back customers / users again and again without push notifications or advertising. This is called stickiness and you can read about on VC Sequoia Capital’s blog here.

Magic Moment

Which leaves — Magic Moments! Okay, this one is not so easy to define. And, for you and for each founder, it will be something different, something unique, a vision, or an insight into what ‘really matters’.

Magic Moments are in effect, the essence our North Star measures.

Why?

Simple. Top of the funnel acquisition or product development improvements are largely a process or journey which can be mapped out and with good people and good data, optimised.

Magic Moments, however, are whatever you decide they should be. They are a choice — a decision — to prioritise ‘this’ over ‘that’. The choice is made from your gut feelings — sure, based on years of experience, but it is what you believe moves the dial in the biggest and most impactful way for your users and your customers.

Again, your Magic Moment is the one thing that you would still focus on, if you were forced to choose! Hence, it is the essence of what makes your startup unique, different and special. Whereas the marketing techniques and software developments are more (not entirely) predictable.

Fundraising

Now, hopefully, you can see where fund raising fits here too?

Investors also look for that one single knockout factor that sets you apart from incumbents or legacy businesses or, indeed, other startups. That Magic Moment measured by your North Star!

So how do you find your Missing Piece? Your Magic Moment, North Star etc? Well, the best way is through examples of startups that discovered, lost and then began to rediscover them:

North Star and Magic Moment Examples

First up, Uber

A magic moment for a customer of Uber taxis is when you open the app and see that there are cars that could pick you up within 5 minutes. Wow! Especially, if you’re in an unfamiliar city or location where you don’t speak the local language or it is an odd time of day — this ‘available now’ service is amazing, incredible — like, Magic, right? It makes you want to say ‘how do they do that!?!’

So far, so good! Hence, Uber built a pricing model to ‘encourage’ drivers to be available at busy times and hence, deliver an ‘always ready’ service.

However, once Uber reached the ‘just 5 minutes away’ availability, customers don’t care if the service ‘improves’ to just 3 minutes away or 2 minutes away.

So, the ‘North Star’ that drove Uber to add more drivers and capacity so that people could get a faster and faster response —didn’t impact customers further, once they reached ‘ready in 5 minutes’.

Hence, what is Uber’s North Star now you might ask? Good question, and why are they are now delivering food (Uber Eats) and even vaccines and other packages?

Uber have now switched from ‘ready when you are’ to ‘whatever you want, now’ . They have switched from availability to ubiquity — the ‘anything and everything, now’ model that Amazon moved to.

Hence, Uber’s North Star took them a long way. But then it crashed and they had to refine their Magic Moment, their unique quality.

Next, Facebook

Similarly, Facebook’s early North Star can be defined as ‘connections’. So the more connections you or I added — the more valuable Facebook became. However, once you or I reached 120 or so connections, then we moved from sharing with trusted friends and family to sharing with more distant acquaintances. And once we are no longer in our trusted tribe, we are more hesitant to share personal news!

You can guess the rest, right?

AhHa!

I know this is a long piece — so if you got this far, thanks for bearing with me — but here’s the really AhHa! moment for me.

I work with teams that seed fundraise and we’ve focus on the factor that drives the multiplying network effect. And why that factor will continue to be relevant in the future. (Yes, many early multiplying effects fade — see above).

So, whilst VCs ask about Network Effects and Growth Hackers speak about Magic Moment and others talk about North Stars — it turns out — they’re the same.

This insight that North Star, Magic Moment or Network Multiplier are essentially the same thing solves a long running question that I have had — and maybe you have had too;

Which should our startup focus on: customers/ users or investment?

And the answer is, of course, both . They are both driven by the same North Star or Magic Moment. That is, the ability (and hard work) to distil all the noise into the one critical signal on which all else — user acquisition, customer sales and investment attraction — depends.

Combine this insight with the ability to rigorously and unstoppably focus on your one single metric and you will drive your startup forwards and upwards.

That’s why for me, this was a ‘the puzzle pieces fit themselves’ moment. It no longer matters whether you seek to fundraise or sell more — they should both be driven by the same goal. Move the needle, shift the dial, for the one critical factor — your North Star and Magic Moment.

Hence, focus your market on your North Star goal. Focus your product development plan on the same. Your customer experiences the same too. And your investment pitch is about the same Magic Moment and North Star. And why its multiplier effect will see you grow in the years ahead.

So what matters is that we find, like really, really find our North Star measurement and then direct all our resources (no matter how limited or how excessive) towards it.

And, if we achieve this focus, customers will give us their money. Users will give us their time. And investors will knock on our door.

Apply this question to your Startup:

What is your Startup’s North Star (and, will it be the same if you are x10 or x1000 larger)?

And if you don’t know or are unsure, get some help.

If you enjoyed this, you can check out more of my Founder insights here on Media Modo or watch the video.

A Guide to North Stars and Magic Moments – Neil Lewis, Media Modo