Introduction
Aspiring product managers (PMs) often face a wide array of questions during FAANG interviews, designed to assess their tactical and strategic thinking, as well as their problem-solving abilities. One of the core skills evaluated is the capability to navigate unexpected scenarios, such as a sudden change in product metrics. In this blog post, we’ll dissect a scenario involving Google Workspace, where we encounter a Month-over-Month (MoM) spike of 15% in storage usage. We’ll articulate a structured approach using frameworks from the book ‘Decode and Conquer: Answers to Product Management Interviews’ to formulate a compelling response during a product management interview.
Detailed Guide on Framework Application
For a challenge like a MoM spike in usage, we can deploy the HEART framework, which stands for Happiness, Engagement, Adoption, Retention, and Task Success. This user-centric model helps PMs to zero in on user interactions with the product and understand the data behind those interactions.
a. Choosing the Right Framework
For the situation at hand, the AARRR framework (Acquisition, Activation, Retention, Referral, and Revenue) also seems apt, as it allows us to examine the funnel that might be impacting the storage usage. Since our focus here is on the usage and potential storage capacity challenges, we will apply the AARRR framework to diagnose the issue and propose solutions.
b. Step-by-Step Guide on How to Apply the AARRR Framework
Step 1: Acquisition Analysis – We start by examining whether the spike in usage is due to an influx of new users or existing users. Google Analytics and internal user data would provide insights here.
Step 2: Activation Investigation – Here we explore whether new users are engaging more heavily with the product than expected. It’s important to compare the activation rates and behaviors between cohorts.
Step 3: Retention Scrutiny – We analyze user retention data to understand if long-term users are uploading more data than usual, indicating a possible change in user behavior or product feature adoption.
Step 4: Referral Consideration – We check if there has been an increase in referrals that might have brought in a larger number of heavy users contributing to the spike.
Step 5: Revenue Evaluation – As Google Workspace operates with both free and paid storage options, understanding the impact on revenue is key. We assess if users are upgrading to more storage thus increasing revenue or if the usage spike could potentially lead to additional costs without increased revenue.
c. Hypothetical Examples to Demonstrate the Frameworks
Let’s assume we find through Acquisition Analysis that there has been no significant increase in new users, therefore we focus on existing user behavior. Upon investigating Activation and Retention, we might discover a trend where existing users are starting to use Google Workspace for more storage-intensive tasks, possibly due to a shift to remote work.
Example: A user who previously maintained small text documents may now be uploading high-resolution images. Such changes in adoption patterns need to be taken into account, and product offerings could be adjusted accordingly, perhaps suggesting a new tier of storage plans tailored to these users.
Revenue Evaluation: If the spike has led to an increase in users purchasing additional storage, this could be a positive development. However, if the cost to Google for providing this extra storage outpaces the revenue from upgrades, this is a point of concern that needs addressing, for example, optimizing storage costs or revising pricing strategies.
d. Fact Checks for Realistic Thinking
Conducting market research for comparable services or past internal data can help to guesstimate a baseline for usual storage growth. Fact-checking with financial data will illustrate whether upgrades are keeping pace with storage use and if the costs are sustainable.
Example: An average increase in storage usage could be 5% MoM, so a 15% increase is significantly higher. We can look at the industry standard cost per gigabyte to estimate potential costs to Google.
e. Communication Tips
During the interview:
– Use clear and concise language.
– Present data points to back your thought process.
– Explain your reasoning and show your analytical skills.
– Walk through how you would execute your approach.
– Display willingness to learn from data and adapt your strategy.
– Emphasize user-centric thinking and business impact.
Conclusion
The AARRR framework offers a structural approach to dissecting a significant MoM spike in storage usage with Google Workspace. It helps to systematically analyze various facets of the product’s user acquisition, engagement, and revenue impact. Keep in mind engaging with hypothetical scenarios can sharpen your problem-solving skills and prepare you for real-life PM challenges. Remember, effective communication and structured problem-solving are key in a PM interview.