North Star Math Formula

A framework for breaking down complex business goals into simple, actionable equations that provide clear direction and targets.

Core Concept

• Break down business goals into simple multiplication equations
• Creates clarity and focus on key metrics needed for success
• Helps work backwards from end goal to required actions

Examples of North Star Formulas

• Hampton's $100M Formula

  • 10,000 CEOs paying $10,000/year = $100M business
  • Focus becomes: Can we provide enough value for $10k/year?
  • Secondary focus: Can we acquire 10k CEOs?

• Tiny Capital's Growth Formula

  • $6M initial investment → $600M outcome
  • Required 45% annual compound growth
  • Focus becomes: How to compound at 45% through business acquisitions

• Recent Startup Example

  • $18M investment → $10M/year free cash flow
  • Creates clear target for return on equity
  • Helps define required business performance

Benefits of This Approach

• Provides clarity on what needs to be achieved
• Makes complex goals more digestible
• Helps identify key metrics to focus on
• Creates actionable targets
• Allows for working backwards from end goal

Key Principles

• Keep equations simple and memorable
• Focus on key metrics that drive success
• Use multiplication rather than complex math
• Work backwards from desired outcome
• Create clear, measurable targets