Pick a North Star metric

To: Exec team From: Staff PM Re: Proposed North Star for the offsite

Recommendation

North Star: completed shifts per month, meaning shifts that were filled and worked, with no no-show and no dispute.

Paired business measure: net take revenue, meaning our 18% take minus all supply incentives (rescue bonuses, sign-up bonuses, no-show credits). Q3 gross take was about $1.76M a month before incentives.

GMV stays in the board pack, shown with a price/volume split, as context rather than as the North Star.

Why not GMV

Q3 looks strong on GMV (+15%, $8.5M to $9.8M), but the underlying picture is weaker:

• Chains drove the growth, and price is part of it. Chain GMV rose from about $2.9M to $4.5M, helped by an 11% holiday rate increase. GMV can't tell price from volume.
• Independents shrank. Their GMV fell about 6%, and their filled shifts fell 11% (44,200 to 39,400).
• The blended fill rate hid the problem. It fell from 82.7% to 77.2%, even though chains (steady at 93% fill) grew their share of posts. Independent fill fell from 79% to 68%.

Completed shifts measure delivered volume, which is price-neutral. They exclude no-shows, and each one is worth roughly $25 of take (18% of the Q3 average shift value of about $138). They also tie directly to the revenue we keep.

Fill rate would have caught the independent decline, but it is a ratio that averages two very different segments. Filled shifts overcount, since they include shifts that never happen. Registrations and active workers are inflated by bonuses.

Metric tree

Completed shifts = shifts posted × fill rate × completion rate

• Shifts posted = active venues × posts per active venue. Owner: Head of Demand.
• Active venues: venues that posted in the last 30 days. Watch 90-day retention: 84% of venues with fill ≥90% are still posting after six months, versus 41% of venues under 70%. Independent churn was 9% in Q3, up from 5%.
• Posts per active venue: includes same-day share. Same-day shifts are 31% of independent posts and fill only 58% of the time.
• Fill rate = filled ÷ posted. Owner: Head of Supply.
• Active workers: workers with three or more shifts in the trailing 30 days.
• Activation rate of new sign-ups: share who work three or more shifts in their first month. Only 2,370 of 7,900 Q3 registrants (30%) have worked at all.
• Completion rate = worked ÷ filled. Owner: COO.
• Verification coverage: share of filled shifts confirmed by the venue. Today it's 64%.
• No-show and dispute rate: 6% of confirmed shifts. Rescue-filled shifts run at 13%, against 4% for the rest.
• Net take (the paired measure) = completed shifts × average shift value × 18%, minus incentives. Owner: Finance lead, to be named. The brief names no CFO.

Paired business measure: net take

Net take is the number that tells us whether incentives pay for themselves. The rescue program is the clearest case. At last month's 6,200 rescue fills, $93,000 in bonuses against roughly $154,000 of take on those shifts (assuming the Q3 average shift value) means the bonus absorbs about 60% of take before counting the extra no-shows. That is a reasonable trade if it saves fills that would otherwise be lost, but we need the net figure to know.

How it could be gamed, and guardrails

1. Fill rate bought with bonuses. Report rescue fills separately, with their cost. Cap incentive spend at 50% of take on each completed shift. Rescue is at about 60% today, so it breaches the cap.
2. Completed shifts inflated by auto-confirmation. The 36% of fills nobody confirms are currently assumed worked. Count a shift only once it is confirmed or its dispute window closes undisputed. Target verification coverage of 90% or more.
3. Sign-up bonuses inflating supply. The North Star doesn't use registrations. The guardrail is the activation rate and three-month retention of each sign-up cohort. Today it is 66% for workers who hit three shifts in month one, against 12% for everyone else.
4. Posting inflated with unfillable shifts. Track fill rate by segment, and 24-hour same-day fill separately. Watch venue retention.
5. GMV growth from price. Show GMV per completed shift alongside total GMV, so price increases are visible.
6. Concentration in chains. Independent active venues must not fall quarter over quarter, and independent churn stays at or below 5% a quarter (the Q2 level). Chains are now 46% of GMV, so this is the risk to watch.
7. No-show rate. Keep it at or below 5% of verified shifts overall.

What each team's metric becomes

• CEO: GMV becomes net take revenue as the paired business measure. GMV stays in the board pack, with a price/volume split.
• Head of Demand: shifts posted becomes active venues and completed shifts from venues we retain. A post counts only as an input, not as success.
• Head of Supply: active workers becomes three-month retained workers, by sign-up cohort. Fill rate is reported with rescue fills shown separately.
• COO: fill rate becomes completion rate and verification coverage, plus cost per completed shift. Fill rate stays as an input.

Data gaps to close before the board

• Baseline. Because 36% of fills are unverified, we cannot state the exact Q3 completed-shift count. Filled shifts (71,000 a month) is an upper bound.
• Enterprise GMV per filled shift fell from about $148 to $143 despite the 11% rate rise. I can't explain this from the data. The rate rise also applies only from August, so Q3 contains only part of it. We need shift-mix data.
• Same-day share in Q2 for independents isn't provided, so we can't say how much of their fill decline is mix rather than demand.
• Rescue economics use the Q3 average shift value as a stand-in. We need actual rescue shift values, and the sign-up bonus cost, which the brief doesn't give.

Decisions for the offsite

1. Adopt completed shifts as the North Star, with the definition above.
2. Adopt net take as the paired measure.
3. Approve the guardrail thresholds, including the 50% incentive cap.
4. Decide the rescue program: keep as is, cap it, or redesign it. My recommendation is to keep it only for shifts where the net take stays positive after the bonus.
5. Name the owner of net take.

MEMORANDUM

TO: Executive Team FROM: Staff Product Manager, Crewmate DATE: October 24, 2023 SUBJECT: North Star Metric Recommendation & Offsite Alignment

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Executive Summary

Next week, we must select a single North Star metric for the board. Currently, our teams are locally optimized: Demand chases posted shifts, Supply chases registrations, and Ops chases fill rate. Meanwhile, the CEO tracks GMV, which is a lagging scoreboard, not a driver.

To fix this, our North Star must capture sustainable marketplace liquidity. I recommend we set our North Star as Completed Shift Value (CSV), paired with a health guardrail of Gross Margin.

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The Recommendation: Completed Shift Value (CSV)

#### Why not the alternatives? * GMV (CEO preference): GMV is vanity. In Q3, our GMV grew from $8.5M to $9.8M, but enterprise chains drove that growth solely by raising hourly rates 11%. Independent volume actually degraded. GMV masks marketplace health and rewards inflation. * Shifts Posted (Demand): Drives low-quality supply ingestion. Independents are already posting shifts that fail to fill, leading to churn (venues with <70% fill rates drop out at a 59% rate). * Active Workers (Supply): Driven by vanity sign-ups ($25 bonus cost us $197k in Q3 for registrants who never worked). * Fill Rate (COO): Can be artificially inflated by restricting demand or via expensive artificial interventions (e.g., Ops’ $15 rescue bonus, which is masking a bleeding independent segment).

#### Why Completed Shift Value (CSV)? CSV represents the actual dollar value of shifts that are successfully worked and confirmed. It directly ties our 18% take rate to real economic activity, stripping out pricing inflation, unfulfilled demand, and ghost shifts. It forces Demand, Supply, and Ops to pull in the same direction: matching real workers to real shifts that actually happen.

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The Business Measure Pair

A North Star cannot stand alone without a quality/sustainability check. * North Star: Completed Shift Value (CSV) * Paired Business Measure: Gross Margin ($)

Why? CSV can be gamed by heavy discounting or expensive operational workarounds (like our $15 rescue bonus, which cost $93k last month alone). Pairing CSV with Gross Margin ensures we are growing profitably, not subsidizing our way to top-line numbers.

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Metric Tree & Owners

To move CSV, every team owns a specific input in the compounding loop.

``` [NORTH STAR: Completed Shift Value (CSV)] | +---------------------------+---------------------------+ | | [Total Completed Shifts] [Average Shift Value] | | +---------------------------+ | | | (Owned by Enterprise [Independent CSV] [Enterprise CSV] & Independent PMs) | | (Head of Demand / (Head of Enterprise Sales) Independent PM) ```

#### Metric Tree Inputs & Owners

1. Independent Completed Shifts (Owner: Head of Demand / Independent PM) * Sub-input: Independent Shifts Posted (Guardrail: maintain >80% fill rate). * Sub-input: Independent Fill Rate. 2. Enterprise Completed Shifts (Owner: Head of Enterprise Sales) * Sub-input: Enterprise Shifts Posted (Q3: 34k/mo). * Sub-input: Enterprise Fill Rate (Q3: 93% — must maintain SLAs). 3. Worker Activation & Retention (Owner: Head of Supply) * Sub-input: 30-Day D1-to-D30 Retention (% of workers completing $\ge 3$ shifts in month one; currently the key predictor of 3-month retention at 66% vs 12%). 4. Marketplace Integrity & Completion (Owner: COO) * Sub-input: Shift Confirmation Rate (closing the gap from our current 64% manual confirmation baseline). * Sub-input: No-show / Dispute Rate (keeping it <5%).

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Gaming Risks & Guardrails

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Team Metric Transformations

To align execution with the new North Star, existing team KPIs must evolve:

• CEO / Board:
• Old: GMV ($9.8M Q3 average).
• New: Completed Shift Value (CSV) and Gross Margin ($).
• Head of Demand:
• Old: Raw shifts posted (incentivized spamming unfillable indie shifts).
• New: Independent Completed Shift Value (ICSV), subject to a $\ge 80\%$ fill rate minimum.
• Head of Supply:
• Old: Raw worker registrations (incentivized wasteful $25 sign-up bonuses that yielded low-intent users).
• New: Worker Activation Rate (% of new registrants who complete $\ge 3$ shifts in their first 30 days).
• COO / Operations:
• Old: Overall raw fill rate.
• New: Net Reliable Fill Rate (Total completed shifts minus no-shows/disputes, excluding unviable rescue-subsidized interventions).
• Enterprise Sales:
• Old: Enterprise shift volume.
• New: Enterprise Contract CSV Yield & Renewal Rate (ensuring our 4 annual contract chains scale predictably without margin erosion).

Conclusion

By adopting CSV and Gross Margin, we give the board a honest reflection of our marketplace health, eliminate perverse incentives across Demand and Supply, and force Ops to solve systemic matching issues rather than masking them with cash. Let’s lock this in at the offsite.

Memo: Choosing Crewmate's North Star

To: Exec team | From: Staff PM | For: Offsite decision; CEO reports to the board three weeks later

Recommendation

North Star: Completed shifts, meaning shifts filled by a vetted worker and worked (no no-show, no dispute), per month.

Paired business measure: Net revenue, which is our 18% take minus worker incentives (rescue and sign-up bonuses). GMV stays in the board deck as context, shown at constant rates and split by segment.

Why not the four numbers on the table

Each can rise while the business gets worse. Q2 to Q3, monthly averages:

• Shifts posted rose 19% (77k to 92k), but filled shifts rose only 11%. Independents posted 4% more and filled 11% fewer (44.2k to 39.4k). Fill fell from 79% to 68%.
• GMV rose 15% ($8.5M to $9.8M), but all the growth is chains. Chain GMV went from about $2.9M to $4.5M (+56%) and independent GMV from about $5.6M to $5.3M (−6%). The chains' 11% rate rise from August also inflates it. That is price, not service.
• Active workers is the most gameable. Registrations rose 30% (6,100 to 7,900) after the $25 bonus, but only 2,370 of the Q3 registrants (30%) have worked a shift.
• Fill rate is now partly bought. Chains hold at 93% and independents have dropped to 68%. Ops spends $93k a month on $15 rescue bonuses, and those fills no-show at 13% against 4% elsewhere. That is not a criticism of Ops. The fill rate simply can't tell a durable fill from a purchased one.

Completed shifts needs demand, supply and reliability to all work, and price can't move it. It also tracks what keeps venues: those filling 90% or more retain at 84% after six months, against 41% below 70%. The average independent is now at 68%, and 9% of independents stopped posting in Q3 (5% in Q2).

Caveats you should know: 1. The headline will look healthy. I estimate completed shifts rose about 11%, from ~60k to ~67k a month, applying the 6% failure rate to filled shifts. Chains are carrying that, so the independent segment must be reported next to it (see guardrails). 2. The baseline is provisional. Venues confirm only 64% of filled shifts. The 6% failure rate comes from that confirmed subset, and the other 36% are assumed worked. Our first board number should be labeled an estimate, with confirmation coverage disclosed.

Metric tree

Completed shifts = Posted shifts × Fill rate × Show-up rate

Supply drives fill, so the Head of Supply's activation target is a stated input to the COO's fill target. Owners agree those two numbers jointly.

How it could be gamed, and the guardrails

What each team's current metric becomes

What I'm asking the exec team to decide at the offsite

1. Adopt completed shifts as the North Star, paired with net revenue.
2. Agree the definition: filled, not no-show, not disputed. The board gets the estimated baseline (~60k in Q2, ~67k in Q3) with confirmation coverage disclosed.
3. Confirm the owners above.
4. Change incentive payouts. Rescue bonuses are paid on completion, and the sign-up bonus on the third shift. I'd keep rescue itself, because fill matters for retention. We just shouldn't count it as organic.
5. Fund confirmation coverage, in-app confirmation prompts and worker clock-in, as the first Product deliverable. Until it lands, the North Star carries a known error band.

What I'm not claiming

I haven't shown that rescue or the sign-up bonus is net-negative. The data doesn't isolate their effects, and rescue covers only about one month of Q3. The point is that neither should be able to move our headline number without proving it produced a completed shift. Over the next quarter, Product and Finance should model the retention value of rescue fills against their cost and no-show rate.