Should Razorpay Build it’s UPI App? PM Interview | Product Strategy.
Imagine you are PM at Razorpay, and the CEOs asks you to evaluate if Razorpay should develop their own UPI app.
Product Strategy questions are a fundamental aspect of Product Manager interviews, designed to gauge a candidate’s ability to make informed business decisions.
These questions delve into the candidate’s strategic thinking, problem-solving skills, and their approach to understanding and navigating the complex dynamics of the market.
These questions offer a glimpse into how a candidate thinks about markets, products, and the interplay between the two.
They are designed to unearth a candidate’s ability to synthesize complex information, envision a product’s trajectory, and align it with business objectives.
Effective handling of these questions demonstrates a candidate’s readiness to steer a product through the ever-evolving landscapes of technology and consumer needs.
Why Are Product Strategy Questions Asked?
Product Strategy questions are the cornerstone for evaluating a candidate’s ability to navigate the multifaceted challenges of product management. They serve two primary purposes:
Assessing Decision-Making Skills
Strategy questions are pivotal in determining how a candidate approaches business decisions. Do they have a structured thought process? Can they differentiate between assumptions and concrete data?
These questions reveal a candidate’s ability to analyze situations, consider various factors, and make decisions that align with the company’s goals and market realities.
Evaluating Structured Thinking and Conclusion Drawing
Another crucial aspect of these questions is to evaluate whether the candidate jumps to conclusions or builds their reasoning on well-thought-out assumptions and analyses.
The way a candidate processes information and arrives at conclusions can speak volumes about their strategic planning skills and their potential as a Product Manager.
Tackling Product Strategy Questions: The 5C Framework
When faced with a product strategy question, such as whether Company X should enter Market Y, a structured approach is vital. One effective method is the 5C framework, which encompasses:
Company
Analyze the strengths, weaknesses, resources, and capabilities of the company. How do these align with the demands of the new market?
Understand the company’s vision, mission, and current strategies to determine how entering a new market aligns with these elements.
Collaborators
Identify key partners, suppliers, and other collaborators who could play a role in this market entry.
Assess how these relationships can be leveraged or need to be adapted for the new market dynamics.
Customers
Understand the target audience in the new market. What are their needs, preferences, and behaviors?
Evaluate how well the company’s offerings can meet these needs compared to existing solutions.
Competitors
Conduct a thorough analysis of the competitive landscape. Who are the key players, and what is their market share?
Understand the competitors’ strengths and weaknesses to identify potential opportunities and threats.
Climate
Examine external factors such as market trends, regulatory environment, economic conditions, and technological advancements.
Assess how these factors could impact the company’s ability to enter and succeed in the new market.
Note: In real life, the strategic analysis takes a lot of research and thinking. The answer will not be straight forward. But these interview question are meant to analyse your thinking style and thought structuring.
Now that we have Understood how the Product Strategy questions needs to be tackled lets dive into a case study of an Indian Fintech company Razorpay.
Problem Statement:
Imagine you are PM at Razorpay, and your CEO asks you to evaluate if Razorpay should develop their own UPI app.
PS: To the users who don’t know Razorpay. Its a Payment gateway like Stripe which accept payments, send payouts, automate financial processes etc. Razorpay is India’s biggest payment gateway, which helps businesses integrate payment system into their platform.
Candidate: So here we are talking about Razorpay the online payment solution platform that enables businesses to take online payments?
Interviewer: Yes
Candidate: By a UPI app, are we thinking of creating an app or creating a service like Bharatpe for businesses to receive UPI payments from Razorpay-based QR code?
Interviewer: Here we are talking about the app. Like Gpay.
Candidate: Ok, So Razorpay wants to get into a market of UPI payment apps like Gpay, Phonepe, and Paytm.
Interviewer: Yes
Candidate: OK, here is how I would proceed with this problem statement. I would first like to analyze the company Razorpay, their business, mission goals, etc.
Then I will deep dive into their customers and the new target customer they are trying to target. After that, we will look at the competitor landscape and how the company can make entry into the market.
Then lastly based on the analysis I will evaluate if we should create an app or any other suggestion.
Does this sound good?
Interviewer: Yes, please go ahead.
Candidate: OK, let me evaluate the company first, Razorpay is a B2B payments company. The company provides a payment platform for businesses that want to service their customers online.
The mission of the company is to simplify payment integration for businesses.
Razorpay has many products in its portfolio including POS, Payment gateway, subscription, etc. Razorpay makes it simple for companies to integrate payment systems. With Razorpays simple plug-and-play payment solutions.
Now that we have understood the Company let’s understand the customers of Razorpay. Does this sound good till now?
Interviewer: Yes, continue.
Candidate: Since Razorpay is a B2B company its customers are also businesses. Razorpay clients include SMBs, enterprises, and startups.
The pain point Razorpay is currently trying to solve is making payment integration simple for these users
How does Razorpay reach its users? As most B2B companies do, through their BDR or sales team. Razorpay’s current reach to its customers is via sales and this is where their expertise lies.
Now let’s talk about the competitors.
Razorpay currently has multiple competitors in its current market space. Some of them are Billdesk, PayU, Stripe, etc.
All there competitors are also focused on the B2B market and none of them have a separate app targeting a B2C market.
Does this sound good till now?
Interviewer: Yes, let’s see if Razorpay can enter the market.
Candidate: Yes, now that we have a 360 view, let’s do a SWOT analysis to determine if Razorpay should enter the market or not.
Strength:
1. Razorpay has a strong fintech background, It understands the nuances of. finances and has a strong foundation in the same.
2. Razorpay has already supported multiple UPI application payment platforms. So based on these integrations, it understands the tech.
3. Razorpay has integrations with multiple businesses it can use to push its product to acquire users.
Weakness:
1. Razorpay has always been a B2B company and never entered a B2C marketplace. This will be a different environment for the company.
2. Companies in B2C space takes a long time to break even, so the company should be ready to inject a significant amount of capital.
3. The in-house team doesnot have the expertise to build an App.
Opportunity:
1. Razorpay’s products time to market for the app can be very quick. Since the knowledge about financial product is already present in the house.
2. UPI currently is the preferred way to do online transactions. So makes sense for Razorpay to capture the market.
3. Huge market opportunity for the company to venture into a new market with a new segment of users.
Threat:
1. Detoriating relation with multiple UPI apps due to the launch of the new app.
2. There is a high chance of failure due to a lack of app ecosystem knowledge due to which the company might need to partner with other agencies.
Based on the above SWOT analysis it’s evident that Razorpay is best placed to succeed with the UPI app but 2 factors go against them.
The first one is, hurting existing relationships with UPI partners and causing a risk in existing B2B business.
Second, the risk of entering a new ecosystem with already has established competitors will require a lot of hard work and cash burn to compete.
Interviewer: So what’s the final result?
Candidate: I believe Razorpay should not directly jump into creating a UPI app, for it to maintain relations with its partners.
It should start with Start building expertise in-house about Mobile Application development, B2C ecosystem and then venture into the space.
Interviewer: Ok that sounds fair.
PS: Here the goals, Purpose and other aspects are not been asked by the candidate. Because the problem statement is one liner. You can ask more clarifying questions to the interviewer like, What is the goal of creating the app? Are we talking about just UPI app payments from user to user or User to Business? These questions might have broken down the problem statement.
Conclusion:
Mastering Product Strategy questions in Product Manager interviews is an art that blends analytical prowess with strategic foresight.
By employing frameworks like the 5C model, candidates can showcase their ability to dissect complex market scenarios, align strategies with business objectives, and envision a path for product success.
It’s about demonstrating a keen understanding of the market, the product, and the unique interplay between the two.
Excelling in these questions is a testament to a candidate’s readiness to take on the challenging yet rewarding role of a Product Manager, guiding products to thrive in dynamic markets and delivering value to both the business and its customers.
