Interview Tip: Walk me through a product you are proud of?
The top asked question in product interviews
I diligently review every interview packet for product candidates, whether they are a hire or no-hire. This helps me calibrate interviewers and candidates and ensure all aspects of the role are evaluated. Having read thousands of such packets, I have noticed that the most popular question that comes up is, “Walk me through a product you are proud of?” or some variation of it, like “What is the most inventive or innovative thing you’ve done?”, “Walk me through a product you incubated”, or “Can you give me an example of a soup-to-nuts product?”.
When answering this question, it's crucial to keep in mind that the interviewer is not only interested in the product itself but also in your thought process behind it. You are being evaluated on multiple skills, including your product development expertise and communication abilities.
Here are my thoughts (with a hypothetical example) on how to answer this question.
#1: Are you thinking of the problem broadly, and in the right way from a customer’s perspective. WHO is your customer, and WHAT problem are you solving for them. Give context on industry, competitor, and market size to shape WHY do you want to build this product?
Hypothetical Example: I'll talk about my journey of launching a consumer lending platform in India. [Context] Commerce in India has undergone a significant shift in the last few years, with ecommerce growing from y% to about x% of overall commerce in India in the last 5 years. It is expected to reach $y by 2025, opening up massive opportunities to disrupt related traditional business models like financing by building the right experiences and enablers for consumers. [Additional macro-trends to understand and set the context.] [Industry Trend] Consumer purchasing power is increasing: Driven by India's economic growth and favourable population mix, average household incomes in India are expected to triple over the next two decades. The highest consumer spending is likely to occur in food, housing, consumer durables, and transport and communication sectors. [Customer Insight] "Perceived Value" is a key input in purchase decisions: For purchase decisions, three factors influence the sales channel selection - convenience, perceived value, and trust and safety. User research shows that consumers in India over-index on perceived value, with 70% of surveyed users calling it the most important factor while making the purchase decision. [Market Gap/Opportunity Sizing] Financing, which improves affordability, is one of the key inputs to the perceived value of products. The fast-growing Indian consumer finance market is expected to reach a USD X trillion opportunity by 2025. However, the market remains under-penetrated (x%+ of households have no liabilities of any sort). [Customer Pain Points hinting at Value Prop] The top customer concerns are low reach (only 1% of the population is eligible for traditional financing), long (7-10 days) processing and disbursement times, and high interest rates (ranging from 18% - 25%). There are currently no solutions available in this space that address these consumer concerns head-on. [Close with Painting the Customer Persona] The target customer persona is the middle class in Tier 2 cities, including people with jobs or small businesses and steady income, earning less than 300$/month, and families. They have access to mobile but are still new to technology. Trust is key for them, and they are value-conscious.
#2: Next, Explain your Product Vision and Value Prop.
My vision for the consumer lending platform is to provide customers with easy and affordable access to credit, while solving at scale for millions of customers. The value proposition of our platform includes: (1) Hassle-free and fast access to credit - Our platform will increase purchasing power, providing customers with the opportunity to trade-up. We aim to reduce approval and disbursement times to mere minutes, as opposed to days. (2) Low costs - Our platform will offer the lowest costs in the industry with the right risk pricing built-in. (3) Simplicity, transparency, and fair pricing - We believe in being open and transparent in pricing, payments, and terms. Our pricing will be simple and fair, with no hidden charges or complex, tiered pricing.
#3: Then, talk about Success Metrics. What does success look like? Is it aligned with customer success? How do you know you are heading in the right direction?
We agreed to the following as the key input metrics for the product 1) Product coverage: % of products (greater than pre-defined price) eligible for financing. 12 month goal was x%+. 2) Unique eligible customers: Total number of monthly unique customers eligible for financing. 12 month goal was yM+ customers. 3) Cost Percentile: % of consumers being offered credit at rates lower than market average (offline finance players or credit cards) average. 12 month goal was z%. In addition, we measured guardrail metrics like changes in conversion rates attributed to consumer financing options, drop-offs in the (new) funnel, order cancellations, and loan default rates. The output metric was GMV and retention rates.
#4: Then, talk about Product Strategy, and Roadmap. Show TradeOffs and Prioritization, if possible
The major building blocks for winning in this space are: 1) Simple, seamless user experience: Approval with one click, no disruption or added friction in the purchase process, convenient loan origination at the time of purchase, easy cancellation in case of returns and closure upon completion of payment, and seamless disbursements. 2) Robust risk models: Leveraging existing data (user data, affinities, past behavior) and available third-party data to inform and compute risk, which is a function of two behaviors - capacity to pay and willingness to pay. Building models based on our own data is critical to scale and provide credit to a large number of customers. Additionally, we aim to build the right partnerships to gain intelligence on various risk metrics. 3) Transparent pricing and simple payments process: The core objective is to put the customer first and make the product simple to use with no fine print. Create multiple ways to repay to support flexibility, provide online tools where customers can track their EMIs, recurring payments, and other settings, and set customers up for financial success. In terms of prioritization, here's what the journey looks like: First 6 months - Nail the Consumer Experience. The primary goal during this time is to refine and perfect the customer experience. Customers should clearly understand the value proposition, go through the financing flow without any hiccups, try out the product without any fear of the unknown, and be delighted by the offering. We leveraged multiple levers to drive adoption: a) No-cost EMIs for select products: Provide incentives for trials by giving no-cost EMIs. b) Pre-approved loans: Pre-approve over 1M customers so they don't have to fill in any details for a loan. This enables faster processing times. c) One-touch checkout: Make it as easy to buy through financing as through other payment options. d) Boost discovery of the offering: Leverage customer touchpoints to drive awareness around consumer financing and aid customer education. From 6+ months to 12 months - Build for Scale - Once the consumer experience was solid, and we knew we were on the right track, the next goal was to scale. We needed to build scale for eligible customers and eligible products. This depended on reliable and robust risk models and capital investments. During this time, we refined the risk models in the backend from basic (totally driven by third-party data) to advanced (leveraging internal data + third-party data).
#5: Finally, wrap it up with Results, and demonstrate How you Learnt and Iterated
Consumer financing is now our key differentiators and is driving healthy customer NPS. In terms of success metrics - 1) Unique Users: Grew from xK in the first month, to about xM monthly over 12 month period. 2) Usage Per Customer: Average loans per customer (per 6 months) has grown to y. The industry average is z. 3) Contribution to Sales: Today, this contributes to ~z% of our overall sales in revenue terms, and x% in terms of units. We continue to iterate the product. As our understanding of our customers grew, it helped enhance our customer experience and customer risk profiles. We moved the risk assessment models gradually from Stage 1 to Stage 3 while measuring their efficacy: Stage 1: Bureau data (e.g. CIBIL, Equifax): Reach xM customers. Stage 2: Partner bank data: Reach yM customers. Stage 3: Internal data: Reach zM customers. The eligible customer reach improved from xM customers to zM customers over the 12-month period through better models. We also expanded the offering to all products selling above INR 10,000. This value was arrived at by leveraging user research, third-party data, existing price distribution, and offline industry benchmarks.