Product Interviews: Success Metrics (Execution/Analytical)

one of the most common interview questions you need to prepare for to Ace your product interviews is what success metrics would you set for product X in this video I'm going to give you the simplest and most intuitive structure I've developed yet so you can impress your interviews and Ace the interview and the question we're going to go through today is what success metrics would you set for Uber the first thing we're going to talk about is the business and to understand that first which is so key so the first question I'm going to ask

the interviewer is what product are we talking about of Ubers Uber has a multitude of products from its Flagship ride hailing product tuber eats two Uber has a credit card now but let's say the interviewer tells us to focus on the ride hailing app okay great the next question I'm going to try to figure out is who are the users in the ecosystem and what is the value they're getting from the Uber app so with Uber the ride hailing app you know there are the writers which is like myself and the drivers if I think

about the rider the way they get value is when they successfully get from A to B using Uber and if I think about the drivers they find Value when they get a payout after they're driving around Riders hence if I look at the intersection of value between these two users it is the number of completed rides because the more rides that are completed the more drivers are earning and again the number of completed rides means Riders are happy and they get the value of being taken from destination a to destination B so a tip here

is the intersection of value for multiple sides of the ecosystem is a great North Star metric to focus on next I'm going to talk a little bit about how the product works and here whether it's the driver's side or the rider side they first have to sign up now let's talk about the Riders first so their first step is to request a ride which means they would type in the address of where they're going to once I finally request the ride and choose which option of rides whether it's something like an Uber pool or an

Uber X they then wait to get matched with the driver and this might take a bit of time based on what option they ordered and how many drivers are around in the neighborhood and once they get matched on the driver's side what they're seeing is they're getting a request for a rider and they have to accept that request and once they do the writer then gets a confirmed match and a estimated time of when that driver is going to arrive so the driver heads over they wait a couple minutes for the rider to get into

the car and that's when the trip starts the driver then takes them to their destination and at the end the ride is complete and the driver and the rider are asked to rate their ride and the Riders ask if they want to give a tip to the driver and a driver at the end of certain thresholds will get a payout a tip here it is really important to go through the user flow to help you define success which will talk about a little later and lastly in this section I want to talk about the business

model here Uber's revenue is tied to a driver's earnings because Uber takes 20 from the total earnings of the drivers and a driver's revenue is made up of the number of completed rides times the total cost of the ride another tip I want to leave you with here is important metrics are more important than more metrics which is the old age quality over quantity so don't try to exhaust we think of all the possible metrics that you can measure instead weren't the most important key ones that I'm going to tell you about the product's health

and the second Pro to appear is it's not just about what metrics you come up with but the story that you're telling to create this narration of why certain metrics are important how they fit into the bigger picture of what Uber is trying to optimize for so we'll talk a little bit about that in the next section so step number three I now want to start verbalizing qualitatively what does success mean on the Uber platform and here I'm going to aim to talk about the most important things versus trying to talk about everything for example

I'm going to prioritize the number of let's say active writers or drivers over something like number of signups because you can have a lot of sign ups but if you're not getting people to be active on the platform to stay they don't really matter what I'm asking what does success look like I'm also needing to ask what does bad look like on the platform so these are the things that would help me come up with counter metrics and things that I need to watch out for so let's go through a couple examples of success questions

that I would ask and then lead me to come up with metrics to measure those things so first going to be talking about Uber overall and a couple of things that look like success for Uber is are we growing our revenues and hence the question I would try to answer here is how much money are we making so this is the very first step to get right which is verbalizing what a success look like and what question you'd be asking because that would help you then naturally flow into some metrics to reflect that rather than

just coming up with a bunch of metrics this is important because to develop good products you first have to think of the why why are certain things important rather than coming up with a couple of metrics that are metrics from the industry like yes we all know that things like revenue or profit is very important and hence a candidate could just list off metrics that are coming from another company but that does not show product thinking or product leadership instead starting with the why which is what does success look like is going to help convey

that narrative that you're thinking thoughtfully about the product rather than just copying pasting metrics from other products that you've memorized so now that I have the question that I care about what success looks like the metrics will come naturally and that would be measuring things like total revenue and total profit and next another thing that would look like success for the Uber app is are more users using it more frequently and that is something we want to see over time for our product and the question that I have is is usage going up and the

metric that falls out of that after I brainstorm a couple is the number of completed rides which I talked about above is a key North Star another way of defining success for the Uber platform is are we seeing positive Roi return on investment Uber uses a lot of incentives to give drivers or Riders but are those incentives actually turning out to be return on investment positive so that would be the question I would ask and a metric I would use to then measure that is the total earned over the total spent by Uber and now

that I've come up with a couple of metrics for Uber I want to prioritize this is again going to show product leadership that you know what are the most important metrics versus trying to measure everything so if we look through our list of three so far the first two I would say are priority number one and the last one of positive Roi would be a lesser priority and you might ask how did I come up with these priorities well it is all relative to each other I know profits and revenue is going to be the

most important and also usage engagement in general is going to be the most important versus positive Roi might be secondary next I'm going to be talking about the drivers what does it mean for them to be successful on the platform and what questions would we be asking so the first is we want to see drivers staying on the platform that is what success would look like to me in the Uber ecosystem and a question there would be how many drivers are continuing to drive the metrics that I might look at is the number of active

drivers per week and what driver retention percentage looks like after let's say one month so in this case it shows you there are multiple metrics you could use to measure the thing or the success you're trying to represent or the question that you have so in this case I thought one metric wasn't enough I had to look at two main things to know whether drivers are actually staying on the platform another thing that looks like success on the Uber ecosystem is is there a good ratio between writers and drivers in specific cities places so this

is really important and here again emphasis on the story The Narrative why is this important is because the rider driver ratio determines things like the price wait time and these all contribute to the experience if there's not enough drivers to support writers writers are going to be waiting a heck of a long time or Riders are going to be paying really high prices which is not good and they might stop using in the platform and if they stop using the platform then drivers are not going to get any business so it's always important to keep

this balance this ratio this let's say supply and demand for those that are economists to a certain Benchmark so the metric I would look at is actually driver to Rider ratio so that might be something like one driver to 10 Riders another definer of success on the platform that I would want to see is that drivers are having a good experience so my question here would be are drivers here having a positive experience and this is really key to the platform because if drivers are not having a positive experience it's going to lead to churn

and it's going to mess up that ratio we talked about which means Riders might not have enough supply of drivers so take them from A to B and if right writers are not trusting that the platform is sufficient to take them from ADP they would stop using the product and drivers would have less business so it completely messes up the product and hence the metric I would use here is the average rating by a driver on the Uber experience so this might be something where I asked them from week to week to rate from one

to five are they having a positive experience or another proxy of this is Uber drivers are asked to rate Riders so I might take the aggregate of all the ratings across all their Riders to see are they generally having a positive experience with their Riders and lastly success on the platform is to see that drivers are being productive and my question would be are drivers actually being productive so why does this even mean we want to ensure that when drivers are working on Uber they are not spending an entire hour without a ride or that

when they are taking customers from A to B they're not taking longer than and it should Uber's key thing is to maximize Revenue so if a lot of drivers are being underutilized or wasting out a lot of time either taking customers or waiting not being in the right place that is not maximizing Uber's potential and the driver's potential Revenue too so the metric that I would look at here is earnings per hour now let's talk about what success looks like for Riders people like you and I so success for writers look like if more and

more Riders are adopting Uber and using it I remember early on I was very much not about Uber because I didn't want to pay for taxis but over time it became normal for me to use it and to become regular user so the question I have here are the number of riders growing so the point where it's becoming commonplace for most people in society to be using Uber on let's say a monthly basis at least once a month so the metric I would use to measure that is the number of active writers per week why

a week because I think we want to aim for that goal of getting Riders to use Uber on a weekly basis transportation is something people deal with on a daily basis so let's say at least once a week people are using Uber for a work thing or for personal and that should be the standard Norm or the vision that Uber wants to get to when it can say it is successful success also looks like if modes strides that are started are completed because it would not be ideal for the platform to see a bunch of

people starting to request rides but only 10 of that actually being completed because they were either canceled or the driver did not take the rider to the full trip and has a question I would be asking is is there a significant cancellation rate and then metric then I would look at there is the cancellation weight which is the number of total cancels over the total number of rides requested as I mentioned we want to see Riders using the product weekly and at a common frequency so that really defines success because Uber has a transportation product

is something that should be expected to be used on a weekly basis and we want to be one of the key Transportation apps that people are using so a question here I would be asking is what is the frequency of writers and the metric that would help me answer that question is the number of average rides ordered per user per week we know where in a good place and successful if we're seeing Riders spend a significant amount of their dollars on Uber so for example back then I never took taxis and now Uber has become

so convenient and commonplace that I see myself spending more money on Transportation than I did before so a question I might be asking is how much on average are users spending on Uber and my metric here would be the average spend per user per week and similarly success on the platform is when Riders can say they have a positive experience honestly most of my experiences on Uber have been pretty positive I would say even more than on Lyft and that is a good signifier that I'm going to stay using Uber so my question here would

be are writers generally having a positive experience and this is really important because I would say it's a leading metric that would affect the lagging metric that Uber cares about which is things like retention rate and Revenue so the metric here that represents this would be the average rating of uber by writers and this could be either the average of what they're rating their drivers or could be just the rating on the Uber app in the Google Play store or the Apple Store and you'll see here we did another prioritization where the first two metrics

are priority number one and then we have a couple of metrics that are priority number two and then now even one that's priority number three and how do we get to these priorities I would say it's really important to know that the number of writers are increasing on top of that the rides that they're requesting are actually being completed so that's definitely key priority number one we want to make sure the fundamentals are being met in terms of riders expectations after you've gone through these different metrics at the end you would actually then summarize and

circle the p1s to show your interviewer so they know that you have a product leadership type of thinking and choosing the most important metrics rather than trying to convey every metric so you want to get into the habit of thinking like this so here are a couple other examples that will show how we go through questions for other internet products and I will see you guys in the next video