Estimating the Number of Slack Users: A Guide for Product Management Interviews

This guide will equip you with the knowledge and framework to tackle the common product management interview question: “How would you estimate the number of users for a platform like Slack?”

Introduction

Landing a product manager role at a FAANG company requires navigating various interview questions designed to assess your knowledge, analytical thinking, and problem-solving abilities. One such question might ask you to estimate the number of users for a platform like Slack. This guide, inspired by the book “Decode and Conquer: Answers to Product Management Interviews,” will equip you with the strategies to approach this question effectively.

A Framework for Estimation

To impress your interviewers, deploy a structured framework. Given the nature of this question, a modified version of the Fermi Estimation Technique is ideal. This technique involves breaking down complex problems into smaller, more manageable ones, estimating each individually, and then combining them for an overall estimate.

Here’s a step-by-step guide to applying this framework:

1. Understanding the Question

Begin by understanding the platform’s context. Slack is a business communication platform primarily used by working professionals.

2. Defining the Scope

Clarify the scope of the user base. Are we estimating the total number of registered accounts, monthly active users, or daily active users?

3. Identifying Key Variables

Consider factors like the number of companies in target markets, average company size, industry adoption rate, and platform penetration ratio.

4. Gathering Data

Utilize publicly available data and educated assumptions. For instance, assume there are 200 million companies globally and an average company size of 100 employees.

5. Calculating Estimations

Estimating industry adoption (say, 20%) and platform penetration within those companies (perhaps 10%) can give us a rough figure. So, the number of Slack users = 200,000,000 companies * 100 employees/company * 20% industry adoption * 10% platform penetration = 400 million potential users.

6. Refining Your Estimate

Adjust for factors like multiple accounts per user, dormant accounts, and growth trends. Review industry benchmarks or comparable products to validate your reasoning.

Example in Action

Imagine you’re in your interview, tackling this question by first clarifying your terms and scope. You explain to your interviewer that you aim to estimate the monthly active users (MAUs) as that’s a common metric for platform engagement. You make an educated guess about the total number of companies within Slack’s target demographic, considering size and industry. You then consider Slack’s reported market penetration rates and possibly some recent growth metrics from similar SaaS platforms or industry reports. Considering these factors, you arrive at a reasonable estimate of Slack’s user base.

Remember to check your final estimation against known facts. Is the number you calculated reasonable when considering the number of businesses and professionals worldwide? Always round off to simplify the mathematics where it won’t significantly impact your result.

While communicating your answer, be clear and concise, ensuring you walk the interviewer through your logical process step-by-step. This transparency allows the interviewer to understand not just your final answer but your thinking process.

Conclusion

Estimating the number of Slack users is an exercise in structured analysis and educated guessing. The takeaway is to use frameworks like Fermi Estimations to scaffold your response while relying on sound logic and accessible data points to ground your assumptions. To excel in product management interviews, practicing these techniques and communicating your thought process effectively will set you apart as a candidate. Remember, it’s not just about getting the “right” number, it’s about showcasing a reliable method of estimation.