TLDR: a consumer thinks about how a product makes life better; a product builder thinks about the pixels and the bigger picture, and how it can evolve with time
“What’s your favorite product?” is a common PM interview question. It’s deceptively simple because it sounds like it’s asking for your opinion as a consumer. In reality, it’s a tool for assessing your product thinking. It’s also useful beyond the interview.
When you understand how to analyze your favorite product, or any product for that matter, you can build stronger businesses.
Let’s say Spotify is your favorite product. A typical consumer might say:
I love Spotify because I can listen to any song I want, whenever I want. It’s easy to use. It saves me time and money.
A consumer talks about how a product has made life better. It might even serve as compelling social proof.
A product builder, however, appreciates the pixels of the experience, but also zooms out to see the bigger picture, and imagines how it can evolve. Rather than jumping right to the answer, she unpacks the original question into sub-questions. Here’s a guiding framework:
- What is it? Be clear and crisp.
- Why is it important? Show it’s worth caring about.
- What is the unique insight? Describe why the product is a heavy hitter today, and why will it continue to be relevant.
- Who is the target customer? They experience the problem most acutely.
- Who is the expanded customer? Show there’s a market beyond early adopters.
- How does it attract new customers? This fuels growth.
- How does it retain existing customers? This sustains growth.
This might seem like overkill. You don’t need to go down each branch, but it shows you the breadth and depth of possibilities when evaluating any product.
Most of us approach problems like a test. we try to get to the perfect answer as quickly as possible. It’s easy to forget that the best explorations are a dialogue, not a monologue.
The most common mistake in interviews and real life is diving headfirst into an answer without fully exploring all the paths that can be taken. Unpacking a question into sub-questions helps set up a more nuanced response.
Let’s see the above framework in action, applied to Spotify.
Spotify is my favorite product. It's done a killer job solving the core problem of finding and listening to any song under the sun, at any time; and getting new recommendations that fit my taste profile. I also appreciate how they've expanded beyond their music niche to own the overall audio category.
If you'd like, I can share my approach for thinking about Spotify's product. [Wait for interviewer to give you the green light]
- Prior to streaming, there was a lot of friction in consuming & discovering music
- Consumption was constrained by the à la carte model of buying or downloading a song. If you wanted to listen to more music, you had to spend more money. What if you offered access to a universal catalog?
- Discovery was largely constrained by mainstream channels and friend circles. What if you parsed the DNA of every song to power recommendations?
- Spotify's early target customer: people who want easy access to music
- Expanded target customer: people who want to fill and enhance time with audio
- For new customers: iPod came up with: 1000 songs in your pocket. Spotify is: infinite songs wherever you go
- For existing customers: Spotify knows your audio taste profile better than you do. It consistently recommends novel and relevant content. It also shares nostalgic gifts from the past (e.g., Your Year in Rewind). Audio is tied to memories, and evoking memories is a powerful way to connect with people
Common follow-up from the interviewer: what could be better about this product? Here's another guiding framework:
- What is the product / team uniquely able to do? There are many promising ideas, but the best one depends on what the team has built competencies and incentives around
- How does it expand beyond its original target market?
- What are your assumptions? Be clear about what you believe, and what you should probably de-risk before going all-in
- What is your hypothesis on the biggest blocker?
- How do you validate the hypothesis?
- How do you solve the blocker?
Again, applied to Spotify:
- Spotify has developed strong muscles in music recommendations, acquiring music rights, and creating a beloved brand for millions of consumers
- Music, however, is but one slice of the bigger pie that is audio. Expanding into podcasts is an effective first step towards becoming an audio destination, particularly because demand is high but supply is highly fragmented, which suggests better margins than the well-consolidated music industry
- Assumptions on customer value: Existing Spotify customers listen to podcasts, and would benefit from doing it all in one place. Podcast listeners not on Spotify would be interested in joining given the expanded offering
- Assumptions on business value: Getting Spotify customers on the ads-supported plan to adopt podcasts unlocks new, under-monetized supply. The expanded offering also reduces churn of existing paid subscribers and decreases acquisition costs of new customers
- Hypothesis of biggest blocker: Podcast listeners have already built a habit and library elsewhere, and habits are sticky
- Validate: Compare % of customers that have listened to podcasts on Spotify vs. % overall population that listen to podcasts. Expect former to be much lower than latter. To get really precise on addressable audience, Spotify could survey its customers
- How to solve the blocker: Port over my downloads from another app, or ask me what types of podcasts I listen to, and create a personalized library. Develop a cross-audio network effect — do music genres correlate with podcast genres? How can Spotify create world-class audio discovery?
Most of life is just filling in the pixels without questioning the bigger picture. When it comes to building products, it doesn’t matter if the pixels are perfect when the picture is incoherent. Start with the picture.
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