How to crack product strategy interview questions

Strategy questions are common in product manager interviews at companies like Google, Facebook, and Amazon. For instance, your interviewer might ask, "If you were the CEO of Instagram, what would you do next?" These questions can feel really unsettling at first.

But the good news is that if you know how to approach them they can become fairly easy to answer. So let's step through our recommended approach as well as an example to help you prepare for your interview.

Here’s an overview of what we will cover:



1. How to answer strategy questions in PM interviews

PMs are responsible for setting the product vision and roadmap to deliver it. In other words, they're in charge of product strategy. In your interviews you'll therefore be given strategic questions to discuss with your interviewer.

We recommend following a four-step approach to answer these questions. Let’s step through each of the four steps one by one:

  1. Set a business objective: You should start by making sure you understand the question properly and by defining a specific strategic objective with your interviewer
  2. Generate solutions: Once you know what the objective is, it’s time to generate a structured list of solutions to solve the strategic problem you face
  3. Discuss solutions: After generating solutions, a discussion will naturally follow with your interviewer around the trade-offs and priorities of different solutions
  4. Conclude: Finally, you should conclude the discussion by making a recommendation and answering the initial question you were asked
Step one: Set the business objective

Many candidates skip this step and start answering the question in an unstructured way. This is a big red flag for interviewers. Here are the things you need to do before starting to answer the question:

  • Confirm your understanding
  • Define the business objective

Strategic questions are often ambiguous; this is why they’re hard. The first step to a coherent answer is to listen and confirm you’ve understood the question correctly. If you don’t understand part of the question or if anything is unclear, you should mention it up front. Your interviewer will be happy to clarify at the beginning of the conversation. But if they realize you’ve started answering the question without fully understanding it, this will definitely play against you.

Let’s imagine you’re interviewing at a ready-to-cook meal delivery service and are asked, "If you were the CEO of this company, what would you do next?" This a very broad question, and you might want to double check with your interviewer that they want you to think about all aspects of the business, not just product features. You could say something like, “That’s an interesting question. Can I just confirm I should be thinking about all areas of the business here including: operations, finance, marketing, product, technology, etc?”

Once you’re 100% sure you understand the question you should start defining a business objective. You could say something like, "A helpful way to focus our discussion on the right topics would be to think about the main objectives at the moment. For example, should we try to increase order amounts per delivery for existing customers? Or is our priority to acquire new users? Or is our main challenge the cost of deliveries?”

These questions will trigger a discussion with your interviewer about what the primary business objective is. Your interviewer should help you pick a specific objective (e.g. increase the average order value). But if they don’t, you should pick the one that feels highest in priority to you based on what you know about the company.

A great way to define the business objective is to focus the discussion with your interviewer on tangible metrics such as: number of monthly active users, revenue per active user, etc. Metrics are really helpful because they remove any ambiguity about what you are trying to achieve. It’s not always possible to use them but you should definitely discuss them when you can.

Step two: Generate solutions

Once you've defined the business objective it's time to generate some solutions to reach that objective. Here's how to do it:

  • Create a structure
  • Generate solutions within that structure

Many candidates also skip past creating a structure, which is a big mistake. When brainstorming, it’s easy to get distracted by fun ideas that don’t actually support your business goal. Establishing a structure helps to keep brainstorming directed on achieving your objective.

Let’s go back to our ready-to-cook meal startup and imagine that, after discussing with the interviewer, we decided increasing average order value is a priority. To outline a structure, you could say something like, “Where in the customer journey can we influence average order value? I can think of three moments: 1) Before the user decides to place the order, 2) while the user is browsing the site to place an order, and 3) while the user is checking out with their order.”

At this stage it can be helpful to draw a table with two columns on a piece of paper or whiteboard. The first column should contain the structure, and the second will contain solutions.

Next, you should brainstorm solutions within the structure. You could say something such as, “What mechanisms can we use to increase average order value in each of the three steps we have identified? Before the user decides to place their order we could send an email with a discount code for buying multiple meals, or simply just raise prices. While they’re placing an order we could create urgency by emphasizing what’s popular and running out of stock, or suggest side dishes that go well with the meals they’ve added to their cart. At checkout we could offer free shipping or discounts on orders over $100. etc.”

Step three: Discuss solutions

At this point your interviewer will likely interrupt to discuss your proposed solutions. Whether they do this or not, you should discuss your solutions by:

  • Highlighting trade-offs
  • Prioritizing as necessary

Given all the solutions you’ve outlined, now’s a good time to talk about trade-offs. For instance, your interviewer might ask you to dive deeper into the opportunity of increasing prices. You could say, “One trade-off in raising prices is accepting that we might lose some customers. This solution will certainly increase the average order value, but we might lose customers to a cheaper competitor and decrease overall revenue.”

In addition to discussing trade-offs, it’s a good idea to prioritize the solutions you will recommend based on how much of an opportunity they offer. The reasoning you'll provide will be debatable as it will be based on assumptions and judgement. But your interviewer is mainly interested in how you think, so as long as you justify your prioritization with sound logic they will think you are doing a good job.

For example, you could say, “Given the discussion we’ve had I’d want to avoid the possibility of losing customers, so I’d deprioritize raising prices. In addition, it looks like the area with the most opportunities is while the customer is placing an order, as this has not been optimized by the team, yet.”

Step four: Conclude

Finally, it's a great idea to revisit the initial question again and summarize with your suggestions. This summary is a simple way of telling your interviewer that you are done answering the question. And again, it's an efficient way of showing you've got great communication skills.

In your conclusion be sure to:

  • Make a recommendation
  • Highlight risks and next steps

For instance, you could say, “So if I were the CEO my highest priority for the business would be to increase average order value. In order to achieve that, my first step would be to focus on exploring solutions like emphasizing when meals are running out of stock or suggesting upsells while the customer is placing their order.”

2. Example product strategy question: How would you turn Facebook events around?

Now that you know how to approach product strategy questions, let's look at a full example.

Try answering the question below following the method we have described. Play both the role of the interviewer and candidate. Leave a comment at the bottom of the blog post with your answer. We will reply to every question in the comments section.

The key is to answer the question without seeing other people’s answers. To do so, scroll down directly to the bottom and leave your answer before reading other candidates’ proposals.

Try this question:
How would you turn Facebook events around?
Answer:

You will find our proposed answer to the question below. Before taking a look at it, make sure you go to the bottom of the page and answer the question by yourself in the comments section. There are only so many opportunities to prepare for product strategy interview questions!

Step one: Set a business objective

First, we should confirm our understanding of the question and define a business objective. The question implies that there’s something wrong with Facebook events. Before starting to answer we should therefore clarify what exactly is wrong, so we can fix it.

Here are some questions that immediately come to mind to set the business objective:

  • What exactly is suffering about Facebook events? Engagement? Revenue? etc.
  • What would a successful turnaround look like?

Let’s assume that the interviewer has explained that lack of engagement needs to be fixed ASAP. And they have expressed interest in exploring solutions throughout the entire engagement funnel. Unfortunately, there isn’t an obvious metric to define engagement here as we’ll be working across the funnel, so we’ll have to do without one.

Step two: Generate solutions

The business objective is set, so now we’ll create a structure for brainstorming solutions. Let’s think about the different levels of engagement Facebook users can have with the events feature:

  1. Awareness: users who are aware of the feature but have never used it
  2. Basic engagement: users who have had some type of light interaction with event features, such as being invited or replying to an event
  3. Deep engagement: users who have deeper interactions with the event feature, such as commenting on and creating events on a regular basis

Now we can generate solutions to increase user engagement within this structure.

1. Solutions to increase awareness of events:

  • Suggestions based user updates: Suggest events based on post / status updates (User: “So bored and feeling lonely” => Facebook: ”You might be interested in the following events this afternoon...”)
  • More ad options for businesses: Let businesses advertise special deals related to events they’ve organized (e.g. “50% off everything at happy hour, tonight only!”)
  • Allow more types of events to be pinned: Expand what type of events can be pinned at the top of user feeds (Like the “It’s time to vote!” event listing on election day - e.g. “Your local football team has a game today!”)

2. Solutions to increase basic engagement:

  • Increase urgency via design: Different UI might encourage more interactions before the event (e.g. A countdown clock “only one day left to RSVP!”)
  • Suggest invitations: For events with low RSVPs, suggest friends and family who aren’t invited yet to the event creator (e.g. “Your friends Shawn and Miles love movies - why not invite them to your movie night event?”)
  • Create a “why users are excited” feature: Add “why you are excited to attend” options for users who RSVP, then expose this on the event listing (e.g. Facebook: ”Let others know why you’re excited to attend: Location, Entertainment, Relaxation, Networking etc.” => Event listing: “Most users are excited for the entertainment at this event!”)

3. Solutions to increase deep engagement:

  • Event creation tips: Add tips for creating more engaging event posts, which in turn would reward the creator with more RSVPs and comments (e.g. pop ups on the event creation page like “Adding a picture increases comments on events by 20%” etc.)
  • Predict and auto-populate events: Predict and auto-populate events to encourage creation (e.g. ”Your birthday is coming up, remember to create an event related to your party. Here’s a basic one we made from your birthday event last year to get you started”)
  • Connect with Facebook Live: Include streaming options so that Facebook event pages are also used during events, and not just before they happen (e.g. broadcasting a concert with Facebook Live integration within the event page)
Step three: Discuss solutions

Let’s discuss the solutions we just brainstormed. Imagine that the interviewer tells us that the biggest drop off is from basic to deep engagement. Then it makes sense to focus on solutions which are designed to increase deep engagement. At this stage it’s a good idea to revisit these solutions and highlight trade-offs:

  • Event creation tips: We’ll want to validate that this solution will actually add value and not just get in the way with extra UI elements
  • Predict and auto-populate events: This solution has some dangerous edge cases, like reminding someone to create an anniversary event for a loved one who recently passed away
  • Connect with Facebook Live: This is likely an expensive and time consuming solution as we’d need to work with another team, and we’d want to avoid cannibalizing engagement for Facebook Live
Step four: Conclude

Finally, let’s summarize by making a recommendation while highlighting risks and next steps. Let’s imagine that “Event creation tips” came out as the most promising option in the previous discussion step. Here’s our conclusion:

  • In order to turn Facebook events around, we need to maximize engagement
  • Given the biggest opportunity is increasing deeper engagement, the first thing we’ll try is adding event creation tips, which should lead to more engaging event posts overall
How did you do? 

Leave a comment below with your thoughts and questions, and we will answer them promptly.

3. List of Product Manager Interview Questions: Strategy

In addition, here are a few more strategy questions that were asked in PM interviews at Google, Facebook, Microsoft, Amazon, and LinkedIn, according to data from Glassdoor.com. If you have any questions about them or would like feedback on how to answer them, you can leave your answer for one of the questions below and our team will get back to you:

  • How would you monetize Facebook Messenger?
  • Imagine you’re a PM at a startup that works with big data from the NHL — what’s the first product you would ship?
  • How would you sell live plants at Amazon?
  • If you were the CEO of Facebook, what are the top three things you would do?
  • How would you bootstrap a product that helps people find apartments?
  • Imagine you’re the CEO of Apple — what product would you eliminate from the lineup?
  • If you were a VC, would you be more bullish on AR or VR?
  • Why do you think Microsoft bought LinkedIn?
  • Facebook is expanding into travel to compete with AirBnB — should they build a standalone app or integrate new travel features in the core Facebook experience?
  • If you were the CEO of LEGO, what new product line would you come up with to increase revenue?

If you are practicing for PM interviews, here are some other question types you should prepare for:


Any questions about PM interviews?

If you have any questions about product manager interviews, do not hesitate to ask them below and we will be more than happy to answer them. All questions are good questions, so go ahead!

Keep reading: product manager interview articles