What Success Metrics would you set for Spotify? PM interview
Imagine you are Product Manager for Spotify, what success metrics would you define or lookout for?
Navigating the landscape of a Product Manager (PM) interview can be challenging, especially when it comes to questions about execution style and analytics.
Among the most critical topics in these interviews are questions related to Root Cause Analysis (RCA) and success metrics.
This article aims to demystify the latter, providing insights into why success metrics questions are asked and how to approach them effectively.
In the rapidly evolving world of product management, the ability to define and measure success is what separates great product managers from good ones.
Success metrics are not just indicators of a product’s performance; they are the guiding lights that inform strategic decisions, shape product development, and ultimately, determine the product’s impact in the market.
As such, understanding and effectively communicating these metrics is a cornerstone skill for any aspiring Product Manager.
During interviews, questions regarding success metrics are not merely academic. They are a litmus test for a candidate’s practical acumen and strategic thinking.
These questions delve into how a candidate perceives and values different aspects of a product, from user engagement to financial performance.
The interviewer is looking to uncover not just the candidate’s technical expertise, but also their ability to align product goals with broader business objectives.
Why Are Success Metrics Questions Asked?
Success metrics are integral to the role of a Product Manager. They help in understanding not just how a product is performing, but also in aligning the team’s efforts towards common goals.
During interviews, these questions serve two primary purposes:
- Evaluating Product and User Understanding: A proficient PM must deeply understand the product and its user base. Success metrics questions probe your ability to identify and empathise with the users’ needs and expectations from the product.
The idea is to evaluate if the Candidate is able to understand the product and the customer the product serves. - Assessing Prioritisation Skills: Prioritisation is a key skill for any PM. These questions test your ability to discern what matters most for the product’s success and how you prioritise different aspects of product development and management. If you are able to identity the right metrics which would have impact all the different Stakeholders and able to provide the true picture of success.
Tackling the Success Metrics Question
When faced with a question about success metrics in an interview, a structured approach can make a significant difference. Here’s a step-by-step guide to navigate these questions:
1. Clarify the Question
Begin by ensuring you fully understand the question. Ask for clarifications if needed. This shows your attention to detail and willingness to engage deeply with the problem. This also helps to bring both the party to the same page.
2. Define the Product, Its Users, and Value Proposition
Provide a brief but comprehensive description of the product, its target users, and the value it offers. This sets the stage for discussing the metrics by establishing the context in which these metrics operate.
3. Identify Core Metrics/North Star Metric
The North Star Metric is the key measure of the product’s success. It should align with the product’s core value proposition and long-term vision. For instance, for a social media app, this could be “daily active users” or “time spent on the app per day.”
It should also consider all the users of the platform and help understand if the platform is able to provide value to those users.
4. Derive North Star Metrics Using a Metrics Tree
Break down the North Star Metric using a Metrics Tree. This involves identifying sub-metrics that directly influence the North Star Metric. For example, if the North Star Metric is “user engagement,” sub-metrics could include “number of posts per user” or “average session duration.”
This breakdown helps in understanding what actions can positively impact the North Star Metric. So if questions are asked like: What might be th reason for change in the success metrics? Then breakdown of the success metrics will help in this case.
5. Discuss Counter Metrics
Counter Metrics are essential to ensure that the pursuit of the North Star Metric does not lead to negative outcomes. For example, increasing user engagement should not come at the cost of user privacy or satisfaction. Counter Metrics help maintain a balanced approach to product growth.
Now that we have a structure for the Success metrics type Product interview question, lets dive into the case for today “Spotify”
Problem Statement: Imagine you are Product Manager for Spotify, what success metrics would you define or lookout for?
Me: OK, Here we are talking about the Spotify the music app. Are we considering the entire platform or just Music streaming, podcast?
Interviewer: Let’s consider the entire platform.
Me: Spotify is available at multiple different country, are we looking for a specific country or region for deciding on the metrics?
Interviewer: How would it matter in deciding the Success metrics ?
Me: Yes, it would matter since in different location or regions where Spotify is currently serving its customer, it might me in different stages of product life cycle.
I believe in many developed markets its in Maturity stage, where as in specific country like India its still in the Growth stage. So in the growth stage the company would prefer to prioritise Adoption and Acquisition over revenue and engagement.
Interviewer: Lets say its for the global product , then in which stage would you suggest the product is?
Me: For the global product I believe the product is in the growth stage, its still trying to enter new market and acquire customer. While the mature phase is still in small percent of its users.
So if we are considering the product in all regions I would suggest it in the growth stage.
Interviewer: Sounds fair, go ahead.
Me: So here this will be a birds eye view metrics which the management or other senior leaders can also refer to provide an overall platform performance?
Interviewer: Yes.
Me: Ok, Now that I have an understanding of what we are looking for. Lets understand Spotify as a company and their users, different interaction points and goals of the company.
Interviewer: Ok, go ahead.
Me: Spotify is a premier music streaming platform that offers an extensive library of songs, podcasts, and playlists. Our users range from casual listeners to serious music enthusiasts.
Spotify’s USP lies in its personalised, easily accessible, and diverse music experiences.
Spotify’s song discovery and recommendation has made it a differentiator in the market as compared to its competitor.
Spotify address the pain points of Music Creators as well as Music listeners. It provides new upcoming musicians a platform for their music/songs and Music listeners with a wide variety of music which suites their taste.
There are 3 parties involved in this entire discussion. The music creators, Music listener and the Spotify platform.
The goal/mission of the company is to become goto audio platform for all the music needs.
Are these right assumption?
Interviewer: Yes.
Me: Ok, Now that we have the understanding of the product, Lets decide on the Success metrics, or the North Star metrics which would help us understand the success or failure of the product as a whole.
A North Star metrics is the one which helps us in understanding the value provided to all the Users. By User here I mean the Music listeners, Music creator and the company.
The value generated for all these users can be evaluated by the amount of time spend listening. This helps us understand if the user is really loving the content he/she is listening, And also for music creators it signals that more people are listening to the song.
And for the company, more time spend means more session time of users in the platform and more chances of generating revenue.
Based on this I believe the north Star Metric should
NS: Average time spend listening to Music / week.
Any questions do you have in my approach?
Interviewer: Why have you considered it weekly, why not daily or monthly.
Me: I believe weekly is the right approach here because Monthly is too long of time for metrics evaluation. Till then we might not know if anything happens in the platform.
And daily, is something I believe should be tracked but as a secondary metrics. It will be only evaluated if we see fluctuation in our weekly metrics.
Monitoring daily might not be that accurate to evaluate or analyse. Because metrics might fluctuate significantly and we will not get to see any patterns.
The best way to have a long term based view is to have weekly metrics.
Interviewer: What would be the reason of change in your Success Metrics?
Me: To understand what would impact the Success metrics we need to break down the success metrics.
Average time spend listening to Music / week
= # of user in the platform * Avg Time spend by each user
=(# of trial Users + # of free users + # of premium user ) * Avg Time spend /user
Avg Time spend /user = (Avg time /session) * (# of sessions)
So the change in the below metrics can impact our Success Metrics
- # of trial Users
- # of free users
- # of premium user
- Avg time /session
- # of sessions
So in order to make sure we have a positive Success metrics we need to see a positive impact of these metrics as well.
Interviewer: Ok, any other metrics you would track?
Me: Average time spend listening to Music every week will be my success metrics. Other metrics that I would also like to track is
- Average time spend/user.
- DAU
- # of songs shared.
- New User to Subscribers /week.
- # of songs added to Spotify/week
- # of playlist created /week.
These are some of my other metrics that I would like to track along with my success metrics.
Interviewer: Anything else?
Me: Apart from the success metrics and supporting metrics I would also track counter metrics.
Sometimes there is a chance that my Success metrics might be misleading.
Maybe there is a drop in # of songs listened, And increase in number of podcast listened at the same time.
This change or shift in user behaviour might not reflect in the success metrics appropriately.
To make share we are able to counter it, I will also track the below counter metrics.
- # of songs played /week
- # of podcast played/week
- Time spend listening to songs/week
- Time spend listening to Podcast /week
These counter metrics will help me to make sure we are on the right track.
Interviewer:That was a good breakdown and explanation.
Summary
Success metrics are more than just numbers; they are a reflection of a product’s health and direction.
As a Product Manager, your ability to define, understand, and interpret these metrics is crucial.
In interviews, articulating your approach to these metrics can set you apart as a candidate who not only understands the product but also cares about its sustainable and holistic growth.
Most candidates would go with AARRR metrics in this case. But providing a analytical and well structure approach to define a Success metrics can set you apart.
Remember, the goal is not just to answer the question but to demonstrate a thoughtful, analytical, and user-centric approach to product management.
Your understanding of success metrics is a testament to your potential as a Product Manager who can guide a product to achieve its true potential.
