Introduction
Welcome to this section of the blog that tackles a critical question you might encounter as an aspiring product manager gearing up for FAANG interviews. These interviews can be challenging, and it is imperative to navigate them using structured analytical frameworks. In the spotlight today is a question that examines your ability to estimate and rationalize costs, specifically: How much does it cost Google to run Google Photos?
Detailed Guide on Framework Application
Choosing the Right Framework
For estimating operational costs, a modified version of the Cost-Based Pricing framework can be adapted here, incorporating aspects of business acumen and understanding the scale of tech operations.
Applying the Framework Step-by-Step
- Segment the Cost: Break down the operational costs into broad categories—servers, storage, bandwidth, maintenance, development, and support.
- Analyze Each Segment: Make reasonable assumptions about the cost of each segment based on market standards and available data.
- Add Contingencies: Include additional percentages to account for unexpected costs or variations from assumptions.
- Sum the Costs: Add up the segments to get an estimated total operational cost.
Example and Fact Checks
Let’s hypothesize:
- Storage: 1PB (petabyte) of cloud storage costs approximately $23,000 per month. If Google Photos has 1 billion users, and each uses an average of 10GB, we have about 10 million TB or 10,000 PB. This rough estimation leads to $230 million per month on storage.
- Bandwidth: Assuming Google serves 1 million views of photos or videos per day, at an average of 2MB per view, that’s 2PB of data per day. At $0.12 per GB transferred over the internet, this results in approximately $240,000 per day or $7.2 million per month.
- Maintenance and Development: Assuming Google employs 500 engineers and support staff with an average total cost of $200,000 per person annually, the cost would be around $100 million a year or roughly $8.3 million per month.
- Adding contingencies: If we reserve a 10% contingency for variations, the total is increased by an additional $24.5 million.
Combining these factors, we get an estimated monthly cost to run Google Photos at roughly $275.7 million.
Communicating Effectively
During the interview, articulate your thought process clearly, openly acknowledge assumptions, and mention the need for more accurate data. Also, demonstrate understanding of scale and the technical aspects involved in the service’s operation.
Conclusion
Wrapping up, it’s important for aspiring product managers to practice frameworks like Cost-Based Pricing to estimate operational costs of large-scale services. Remember to dissect the problem, make educated assumptions, and communicate your analysis effectively. Practice this approach to refine your interviewing skills for FAANG product management roles.