This is a structured approach to answering estimation problems in product management interview

1. Product manager Interview
Estimation
Estimation questions are about process you take to solve them
Cracking the PM Interview

2. Step 1: Clarify the
Question
eg: How much money does Gmail makes in ads every
year.
- Repeat the above question
- Ask anything that's ambiguous about the question
- Does money mean profit or revenue
- Gmail.com or even enterprise
etc...

3. Step 2: Catalog
what you know (or
Wish you knew)
See what knowledge you have about the topic and
see what needs to be computed. You can ask the
interviewer about the key facts
Key facts to know
1. Population of US
2. % of population who own Computer
3. Google's annual revenue
4. Cost per click of a typical advertisement
5. Number of ads shown on Gmail
You can ask few of these facts but be prepared to compute
these too

4. Step 3: Make an
Equation
Most important part of the process
- This will help to demonstrate you can tackle
tough problems head on
- There can be multiple approach and not one
single approach
eg:
Bottom up approach
[# of gmail users in US ] x [ annual clicks per user]
x [average revenue per click]
or
top down approach
[Google US revenue] x [% revenue from ads] x [%
ad revenue from embedded] x [% embedded ad
revenue from Gmail]

5. Step 4: Think about
edge cases and
alternative sources
● Show case that you are detailed
oriented and can challenge
yourself
● Think carefully of situations that
might not fall into framework you
created
eg: If you are asked to consider # of
windows to wash in NY City have you
considered car windows and broken
windows

6. Step 5: Break it
Down
● Once you have finalized the equation
which you think will get the right
answer, it's time break it down.
● For each of the main equation
construct sub-equation.
eg:
[# Gmail users in the US] = Population of the US x
% of People with email x % of email users who use
Gmail

7. Step 6: Review &
state Your
assumptions
● Once you have final equation which
is broken down into, You need to
guess some numbers.
● Pick round numbers and state your
assumptions clearly to the
interviewer.
● Be sure to tell the interviewer why
you are making the assumptions you
are

8. Step 7: Do the Math ● Multiply all the values from
the above numbers
● It has to be a ballpark figure
not the exact one

9. Step 8: Sanity
Check
● Make sure the value passes some
quick sanity checks
● Go back through and check your
work. If there's an issue, it's probably
is one of the following areas
○ Original equation
○ Assumptions made
○ Arithmetic
If you # of gmail users in US is 150 Mn
then there is a problem. 50% of US
population cant be using Gmail