Breaking into Product: Part 1 — Guesstimates
Post #1
Hey there!
Welcome to our new series “Breaking into Product” - post #1.
If you are planning to enter (or have recently entered) the Product space, you will love our posts! With this series, we aim to share exclusive content and insights on preparing for product management interviews, common Q&A, interview preparation strategies, etc to help you ace your interviews.
Guesstimates can be a frustrating topic, if not tackled properly. In this article, we explain guesstimates and how to solve them. As a bonus, we’ve also penned down some tips and tricks we’ve used to ace these questions.
PS: There are multiple ways to solve guesstimates. In this article, we highlight the step-by-step process we use to solve them.
What and Why?
“Guesstimates”, as the name suggests, are estimation questions asked during interviews as one of the ways to determine the problem-solving skills of a candidate.
At first, it doesn’t really make sense as to how answering a question like “Tell me the number of red cars crossing Sony signal every day” would determine problem-solving skills. Here is why — when you answer such questions, the interviewer is judging you on your approach, not your answer. It’s all about the journey, not the destination.
But why is it relevant? As a PM, you will not always have enough data to make product decisions. In such a scenario, guesstimation will come in handy.
🧐 For example, let’s say you are trying to determine how many people will use your mobile app in a new city. For that, it is important to estimate how many people have smartphones and access to the internet in that city - which is kind of a prerequisite to using a mobile app.
For such questions, you are shooting for a ballpark. Precision is not the goal here.
With a proper structure and some tips and tricks, you can easily crack these questions.
Note: These questions can seem overwhelming at first but practice is the key 💪. So, take a deep breath and take it slow and steady.
Solving Guesstimates
Note: Think out loud throughout this process. Remember, it’s about the journey. The interviewer will not know your approach if you don’t tell him/her.
Step 1 — Ask lots of questions
Wait, what? The interviewers just asked me a question and I should question back? Yes! Absolutely!
Clarifying the question is important here. You can’t answer a question that you yourself don’t understand completely. This shows you are thinking about the question in a 360-degree manner and not diving right into the solution blindly.
🧐 For example, If you are asked “How many iPhone users are there in India?”, a clarifying question can be — Which model of iPhone are we considering?
Step 2 — Jot down what you know (or would like to know)
Once you are comfortable with the question, write down the values of what you already know or what values would you need to do your computation.
🧐 For example, to understand the number of iPhone users in India, you would need to know:
The number of people in India
The number or percentage of people using smartphones
and then try to determine how many of these could and would afford to buy an iPhone.
You can always ask your interviewer for some unknown values. If you get a reply like “What do you think?”, consider a hint to make your own assumptions and computations. If you want to be extra careful you can always say “Could you provide me this value or would you want me to compute it?”
Step 3 — Make an equation
Steps 2 and 3 are usually done simultaneously. This step definitely defines how close you will get to a realistic number. There is absolutely no one way to write the perfect equation but what you need to remember in this step is, to find the most simple equation to solve your question.
🧐 For example, to calculate the number of iPhone users in India, the equation would be :
The population of iPhone users in India = Population of India - Population without any smartphone - population of android users
Remember, you can always pivot and make a new equation, if you feel you are going in the wrong direction.
Note: If you go wrong anywhere, it is always a plus point to accept that you may not have been correct. It displays the fact you are not afraid to be wrong and are always open to new approaches.
Step 4 — Pause
Pause for a moment and think about everything you just wrote down:
Is your equation making sense?
Have you considered the edge cases?
Can you determine realistic values for each part of your equation?
🧐 For example, did you consider the illegal sales of iPhones that make it easier for some people to afford them? Do you know the android market share?
Do not get nervous if you don’t. Simply, explore and pivot.
Step 5 — Break it down
Break down your equation into sub-equations.
🧐 For example, the population of non-smartphone users in the equation in step 3 would possibly break into:
Population without any smartphone = population of children and elderly + population living below the poverty line + population of the lower middle class.
Ensure that when you write everything down, it is clean so that you do not get confused and mix up the sub-equations.
Step 6 — Review and state your assumptions
Once ready with your equation and values, re-iterate it with the interviewer and clearly call out our assumptions. If your interview is virtual, you can also choose to share your screen and show this process for better understanding.
Step 7 — Do the math
Carefully, calculate your answer. Ensure you calculate everything, step by step, to avoid any calculation mistakes. Also, know that you can use the calculator. This isn’t an examination.
Step 8 — Sanity Check
Once you have the answer in front of you, think if it actually makes sense. If it doesn’t, cross-check your work and determine at each step, if the values seem somewhat correct. Make the changes and voila! There it is. Your final answer.
Tips and Tricks:
Having a few tricks up your sleeve always makes your life easier. Here are a few I found helpful:
Rounded numbers — Working with rounded numbers makes it much easier to calculate. For example, India’s population is 1.39 crores, you can always choose to use 1.4 crores for the sake of easier calculation.
Label your units — We all have made silly mistakes and working with the wrong units is one of the silliest math mistakes. So, clearly write your equations and label your values with units at EVERY STEP.
Call out your sources — When making an assumption always call out your sources so you can communicate to your interviewer where are all the magic numbers are coming from.
Be confident — Being confident in your work will take you two steps forward but let me assure you, overconfidence will take you three steps back. So, be careful how you communicate.
Note: Guesstimates are not only important in PM interviews but are also asked in consulting, business analyst roles, MBA interviews, and many more places. Solving guesstimates could easily be a skill.
We hope this helps you structure your “approach” towards guesstimates. Feel free to reach out at thehustlers2021@gmail.com for any questions or guidance.
Will come back with another interesting case study. Bye!