Product Management Study Guide (Tech Industry)

To use our interactive study guide product, visit InterviewX.co

Overview:

When I was in college (2006–2010 at UPenn) finance jobs were all the rage. Investment banking jobs were the most coveted, and it seemed like all my classmates rushed to figure out how to break into high finance.

Since then, tech has absolutely boomed, and the best and brightest students have been moving to tech companies in droves, many spurning banking and finance. There are a million reasons you could point to, but watching the financial crisis unfold in 2008 was a factor, watching tech founders strike it rich was a factor, and seeing the rise of the insane tech offices and tech perks was a striking comparison to the horror stories of 18 hour days at an investment bank.

So with that development, the role of product manager has become one of the most highly sought after jobs among the world’s elite students. But the role is unclear to many, so we will break down the role and what it’s like to interview for it.

What is “the product?”

You can’t define a product manager until you define “the product.” The product is essentially the app or website that a tech company creates. A car company’s product will be the car, a tech company’s product will be the technology they build. Tech company products can contain a software and/or hardware component.

Apple, for example, makes physical computers (hardware) as well as software (computer programs) like iTunes, iCloud, iMovie, etc. Product managers are required on both sides of the house, but new grads and MBA grads could be software or hardware product managers- companies like Linkedin, Facebook, Twitter, etc. would most typically be interested in software product managers.

What a product manager does

A product management team is in charge of what the app, website, (and even sometimes hardware) that users interact with feels like, what features are available, and the core capabilities the product has.

As products develop, different teams will contribute ideas for how the product should evolve over time and why. The responsibility of the product manager is to take the philosophical changes that a company wants to make in their product, often driven by strategic goals (more growth! More users! More revenue!) and make sure those changes are implemented effectively.

What constitutes an effective implementation?

When you change a product (add a feature, change the layout or design, etc.) you will always create changes in user behavior, which have the ability to change your business for better or worse. When you, as the product manager, attempt to implement things that your company wants to add, you have to make sure that you’re not causing anything else to not work well.

Key traits for a product manager

Companies hire both new grads as product managers, as well as MBA students in more senior roles. The traits that elite tech companies looks for in product managers: people who are analytical, work incredibly well in team settings, possess strong leadership qualities, and past experience building tech products. An intuitive sense for the impact that a product change could have is important. Next, a willingness to speak to real customers is a great trait, as it can be dangerous for a product manager to assume that he or she alone knows more than a survey of hundreds of their users.

Thoughtfulness, decisiveness, and the ability to use data to inform your strategy and your decision making is key. Additionally, understanding overall business strategy is incredibly helpful as a product manager. The changes in product that you make as a product manager must directly tie back to a business or strategic rationale- this is why MBAs are highly sought after as product managers, especially if they have a strong design sense.

Technical skills

Working with languages like SQL (which is a programming language designed to manage large sets of database data) is a plus, as is engineering experience, even if it’s lightweight and not heavy duty coding. Design skill/sensibility is an important technical trait. But perhaps most importantly, the ability to understand technology metrics and analytics is absolutely key.

Additionally, a concept called “consumer product mastery” is important. This is the ability to speak intelligently, clearly, and concisely about a tech product strategy (usually one you like or admire) and the user experience. You should be able to analyze what product choices the team behind them has made, and the effect that these choices likely have had on the important metrics and analytics at play. Don’t be intimidated by the phrase “product choices”- it essentially means how the product looks and feels, and what actions you’re allowed to take within that product, app, or website.

What are analytics and metrics in the PM context?

Think about it this way- every action that a user takes in a tech product is tracked somehow. It’s absolutely key for tech companies to be able to track how users are interacting with their “product” or website or app, whatever they build and however they interact with their customers.

So if you think about a product like Facebook, some metrics might include how long people stay on the site, how many clicks they make per session, which buttons and tabs they click most often, where they spent the majority of their time, what features are most popular, how much revenue the site is able to generate, and how many sessions per time period a user initiates (how often they visit the site).

Think of the wealth of metrics and analytics that Facebook (and similar companies) have access to. They know how many photos the average user uploads per day. They can track which features might be confusing based on how low engagement is. Any behavior you can take in an app or website can be tracked, and must be tracked to improve the performance and usability of the product.

Imagine a tech product you like and use a lot- what do you think are the metrics and analytics that the team behind that product cares most about?

What else do analytics and metrics affect?

There is a concept in technology world called “the funnel.” The funnel represents how effectively you move a user from one status to another. A “sign up flow” can be a funnel- how effectively are we converting people who visit the sign up page to being a fully signed up user? Monetization can be a funnel- how effectively do we convert free users to paid users, and in what time frame?

Being able to track metrics and analytics is essential in optimizing your funnel (basically, getting the highest conversion percentage you possibly can). That means: with all the wealth of information and data that we can track, how might we be able to make more money from this product than we’re currently making?

If you have a product that doesn’t yet generate revenue, a similar question is at play: with all the wealth of information and data that we track, how might we be able to drive the core analytics and metrics (like daily active users, page views, sessions, connections made, etc) that we care most about, and that are most valuable to the company?

An example for why usability matters

Imagine if the checkout process on Amazon.com were exceedingly confusing. That confusion, multiplied by all Amazon’s users, could end up costing them millions of dollars per day. A product manager, who is responsible for the oversight and management of the metrics and analytics that a tech company can track, would be in charge of identifying the weakness in the site’s “conversion rate,” and would have to create a plan of action to fix it.

Conversely, sometimes everything seems to be running smoothly, but a product manager could have a great idea (supported by data they’ve observed or compiled) that suggests the performance, conversion rates, revenue generation, etc. could be even higher. At a high level, the product manager would have to put a plan together, work with engineering, design, and other teams to “fix” it. They would have to track the changes in performance, and would have to constantly re-check their assumptions and make sure that the changes they make and products they release drive positive changes, as reflected by the new metrics and analytics.

What’s an A/B test?

Again, metrics and analytics can help tell the story. Another key concept at play here is an “A/B test” which is a key tool for product managers in the quest to holistically compare the performance of a new feature, new design, or any other change their team is considering.

With an A/B test- you can release two versions of your product to your user base. Companies do this all the time. Imagine if Google wanted to build a new feature in Google Maps. They could push a different experience (release the feature) to 50% of their users, and compare the new feature performance to the metrics reflected in the experience of the other 50% of users, who would be using the old feature set.

A/B tests (and the data and metrics they generate) allow you to tangibly and objectively view how one version of the product performs compared to the other. That analysis leads to valuable lessons, and can inform the features that you choose to keep, vs. which ones become experiments that you ultimately don’t choose to implement.

Tradeoffs

Another key concept for product managers is the idea of “tradeoffs.” When you propose a product change or a new feature, you often times will have to make sacrifices that will be reflected in other metrics. With technology, directing attention towards one thing will often take attention away from a different thing. So how do you decide which “thing” is more valuable, and deserves the most attention from your users? How do you decide where you, as the product manager, would prefer that attention to go? That is the essence of the tradeoff concept- when you take action, you will often cause a reaction. It is always better to foresee and predict what the reaction might be than to be taken by surprise.

In a product manager interview, you’ll be asked to provide your opinions on certain product changes, and will have to understand the concept of a tradeoff. If you propose a change that you think could be valuable to a product, what might the tradeoffs be? What else could be impacted negatively by your proposal?

Usability

Related to the concept of tradeoffs is the idea of usability. Snapchat is a great example of a very simple tech product; the simplicity is not an accident, and does not mean that they don’t have an army of talented product managers and engineers.

The simplicity comes from their prioritization of a few metrics and analytics, and a cautiousness around making decisions that could negatively impact the analytics they hold most sacred. Adding more and more features to Snapchat would make the product more complex. The tradeoffs could be confusing new users, slowing the number of daily active users they can add each month, and decelerating the rate at which content is shared.

Snapchat experiments with dozens upon dozens of new features each year, but add them very slowly due to concerns with tradeoffs, and a refusal to damage the metrics and analytics they value most. A simple product best serves their coveted metrics: daily active users, user growth, user engagement, content shared and viewed by others, and advertising revenue.

Common product management mistakes

There might be some product management organizations with more freedom, fewer checks and balances, and less structure in the way they make product decisions. Despite the freedom you might have in this org, you still must test your product ideas extensively before building them, and you must track the metrics that your changes create like a hawk.

Product management novices will assume they know what to build, will not interview end users, will not test their hypotheses, can risk building features that are not useful, and do not deliver an ROI (even if they may have sounded like good ideas in principle.) Your approach as a product manager must be scientific, and requires you to constantly check your assumptions and seek data driven feedback. This ensures that you don’t waste time, money, and engineering resources building something that doesn’t add value to the business, which is a cardinal sin of product management.

Product management orgs (organizations)

Associate Product Manager- often a junior PM position; this would be a position for most new grads (undergrad)

Product Manager- a more senior PM position, could be for MBAs, or more experienced associate product managers who have been promoted. The issues that a product manager tackles will be slightly more complex than the challenges undertaken by an associate product manager.

Director of Product- a manager of other product managers. A company with a lot of different products will have a product manager or product management team in charge of each product. For example, a company like Facebook likely has a product management team in charge of photos, in charge of the feed, in charge of different mobile features, in charge of Instagram, etc. These teams must work together and stay incredibly coordinated, because a change in product made by one team will always affect the metrics and analytics of the products that surround it.

VP of Product- usually the most senior product position- the leader of the entire organization. They will usually report to the CTO, who would be in charge of engineering and design teams, or sometimes straight into the CEO.

Groups that product managers work with

Business operations- in charge of the analytical heavy lifting to support the company goals and strategy. If a company needs to grow revenue by 40%, business operations will be the analytical horsepower that figures out how to reach that goal. An example- imagine Youtube’s executives needed to figure out a way to increase their revenue. Business operations might hatch the idea to play short, 15 second videos before each ad, and would create the excel models that calculate how much revenue could be generated by this change over time.

Product Management would have to then take this idea or mandate, and figure out how to execute it without disrupting the experience or alienating their users (again, this goes back to the idea of tradeoffs. The tradeoff of adding a 15 second ad could be angry users, or people who just leave the page before viewing the video.)

Engineers are the highly technical team of coders who can actually build products, and are responsible for managing all the data the product generates, figuring out how to keep the performance of the product lightning fast even as thousands of users use the product.

Designers are the team that will design how the interface looks and feels. They need to maintain the branding of the product and make sure that it’s consistent with the overall brand of the company. Engineers typically don’t design the color scheme you see, what the buttons look like, or even how screens in an app flow together. They will typically build based on however the product mangers and designers recommend.

Product Marketing will help present the features you’re building to the market, and will help to create a go-to-market strategy. They’ll create awareness, and try to ultimately parlay that awareness into buzz and revenue.

Sales- once the product is designed and updated, sales will have to update their customers, and will try to use those new features to attract new customers. When sales makes promises to customers about new features, and those features slip, product managers and engineering teams can find themselves at odds with the sales org, whose performance sometimes slips based on that development.

Tools that product managers use

They live and breath in email, Slack, Atlassian products (Confluence, which is essentially a Wiki-tool) and Jira (a bug tracking product). They can use data in a SQL (pronounced “sequel”) format. The Google Suite is also popular, GDocs, Google Spreadsheets, and GMail.

What makes a great product manager, vs. a good one?

A great PM is someone who is a great leader, great communicator, and great coordinator. It’s someone that people want to work with, that they feel comfortable bringing new ideas to, and feel safe around. It’s someone who is humble, thoughtful, intellectually curious and understanding. It’s someone with great design sense, and someone who has enough experience to recognize potential problems with a proposed plan of action, and the ability to de-risk them before they derail the project. They have a command over metrics, analytics, and the tradeoffs in a product management decision.

Culture

Product management teams need to be very collaborative and communicative. Product management leaders respond to data- you shouldn’t typically try to propose a serious product idea without the data to back it up. Product management is a bit of an art, but probably a much larger percentage would be the scientific side. Metrics and analytics should always guide your thinking; or at least, be a strong tour guide to your creativity.

Product vision

As a product manager, you need to understand the vision and mission of the company, as well as the goals they have committed to. Product decisions are a means to making that vision and those goals a reality, while closely managing the impact your product change/addition/development has on your users. Having a vision for your company’s product, or the sub-product that you manage, will require a strong understanding of where your leadership wants to take the company. If their mandate is to increase revenue by a ton, the changes you suggest in the product will likely need to serve that high level vision.

Other challenges faced by PM’s

Product managers are expected to over-communicate, because the changes they make will have a giant affect on the teams around them. Keeping multiple teams on the same page and informed requires a great deal of progress updates, status updates, tracking, and input from a bunch of different teams. It isn’t always harmonious, but you somehow have to keep the teams on the same page and marching together towards the same vision and goal. It can also be stressful to have to pitch product changes to org leaders- these proposals need to be well researched, well argued, and backed up by data.

Practice Product Management Questions to Study:

1. Tell me about a proposed product idea that failed in the past. How did you figure out what went wrong?

2. You run a test and discover that metric A is up, but metric B is down. How do you choose which metric to prioritize when making a product decision? (Examples: number of photos shared is up, total # of sessions per user is down)

3. Why is a particular metric (listed at random by the interviewer) important?

4. Describe an important product decision you made. How did you make it?

5. What’s the difference between correlation of causation? Can you give an example?

6. What are some problems with using a focus group to price a tech company’s enterprise product?

7. Estimate a large number (brainteaser- for example, how many pieces of pizza the City of New York consumes in a calendar year)

8. Walk me through the difference between mean and median. What does it mean, product wise, if the mean is less than the median?