Exercise 47 – You are a new PM at Facebook. Design an app to help people save money.

Post and review answers and feedback to answers in the comments section of this post.

See also:

How to answer a product design question in a product manager job interview

List of product design questions for product manager job interviews

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Let’s assume we are building a Facebook app and the purpose of the app is to help its users save money.

When I think about the persona’s interested in this service, I can think of a few user groups:

– Teens (pre-college) – They are not responsible for making money. They have very limited budget and sometimes get pocket money.

– College Students – They have limited budget but they do receive grants, loans, financial help from parents they sometimes earn small payments to pay for their living expenses

– University graduates – They work and make money. They spend time into financial planning and career planning. They have more complex financial lives.

For this case, I’m going to focus on the “students” group. I think it’s an interesting group to explore. They are tech and active on the social media. They have fairly simple financial life, making it easier for us to launch a new product.

When I think about the needs of the students, I can think of a few use cases:
– They receive grants and loans from university
– They usually pay rent
– They eat lots of fast food / cheap food
– They go out with their friends a lot and can spend a lot of money on socializing
– They sometimes don’t have any experience in making money
– They share expenses with their roommates
– They work in the summer to save some money to be able to pay for their school year expenses

Now, I’d like to brainstorm a few ideas to solve for some of the use cases listed above:

Idea 1 – A tool that uses student’s social media activities to score their likelihood of returning loans. Pass this information to the banks and obtain low interest fee loans for them
Idea 2 – Enable Facebook friends to create a group and compete with each other on reaching saving targets
Idea 3 – Gamify saving by enabling users to earn badges for reaching certain financial targets
Idea 4 – Connect with their bank account, analyze their historical expenses, estimate money needed for the future (rent, food, etc), and send warnings over Facebook Messenger if they go over budget
Idea 5 – Spending breakdown – Show breakdown of your expenses and show where you’re spending more than your Facebook friends

Now, I would like to evaluate each of these ideas based on impact on customer experience and cost of implementation.
Idea 1 – High on consumer impact, very expensive as you need to work with the banks
Idea 2 – Medium value to consumer (it can be fun and engaging), medium cost (develop capability to create groups, connect to banks to download statements, and create UI for the users)
Idea 3 – Low value to customer (badges are valuable if they can be shared. People are private about their financial status), low cost of implementation
Idea 4 – Low impact on customer (their banks can offer this. There is nothing unique about the service), low cost of implementation
Idea 5 – High value on consumer (it helps them see how they are doing compared to their friends), Medium cost

Out of the ideas above, I would focus on building a product that uses features 2 and 5. My MVP will include idea 5 and my V2 will have idea 2. To build the MVP, I would enable the user to connect to connect their Facebook Money Save app to be able to download statements and analyze transactions, categorize them, and compare users’ financial behaviors. The product will enable a Facebook user to invite their friends to the app and start comparing their financial lives with each other. For example, it will say 30% of your spending was on food last month whereas only 20% of your friend’s spending was on food. This product can be expanded to many additional features over time. Here are a list of few:
– Invite users to congratulate each other for reaching certain financial targets
– Enable users to give feedback to each other like “here is how I reduced my spending on food”
– Allow users to challenge each other (e.g. reduce next month’s entertainment spending by 20%)

Bijan
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Bijan

I like the answer. It’s detailed, structured and well explained. Perhaps you could improve it by thinking about solutions that also leverage new technologies (e.g. AI). It helps the interviewer see your creativity and imagination.

Nandini Shetty
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Nandini Shetty

Would it help here to state the goal of the product and tie the final pick of the product to the goal.
Also state a success criteria for the product?

Bijan
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Bijan

Yes. It always helps to wrap up by describing how the features relate to the goal (if there is time). I think listing the success criteria and even describing an implementation plan will also help you present your execution skills but there might not be enough time. You can ask the interviewer towards the end of the interview if there is time for you to go over the success criteria and implementation plan.

Jvl
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Jvl

Business case
– build an application that helps users save money and leverages FB’s unique strengths (user data and connections)

Users
– Teens
– College
-Young adults
– Middle age
– mature

User Cases
– Summary and feedback how much your spending on different categories of items
– How much your earning from investments vs benchmarks
– How much your earning from your job(s) vs benchmarks
– Your saving goals and how your tracking toward them

ideas
Use friends and family (maybe broader local community) as benchmarks toward spending, saving and earning goals
– Not sure people would like / want this but allow users to pick accountability partner that can see % toward goals

Bijan
Guest
Bijan

Hi JV,
Thanks for posting your answer. I think your answer hits a couple good points. It has user groups, use cases and a few ideas to build the app. However, it’s missing a few key steps:

– First, you want to get some clarity on what sort of app the interviewer is referring to: web app, mobile app, or Facebook app? This can dramatically change your answer.

– After listing the user groups, you should ideally select one particular user group and explain your reasoning behind the selection (e.g. the user group is the largest, the most in need, the one you can resonate with, etc). Then start thinking about use cases for that particular user group.

– I would also list at least 5 ideas / solutions that can help improve the use cases / meet the needs you’d list for a particular user group. After listing the ideas, evaluate each of them from a customer impact and cost of implementation perspective. The evaluation will help you determine which features will be prioritized for version 1 of the product.

Hope it helps.

Jvl
Guest
Jvl

Thanks for the feedback Bijan!

Anonymous
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Anonymous

Since Facebook wants to help people save money, we want to leverage its core competencies in its network with friends and existing data it already has:
– Using social capital to behaviorally nudge users.
– Recently saw this with their donations. It encourages people to share that they donated and its optional the amount.

Users who are most likely to use apps to save money:
– Millenials
– young couples

Lets focus on the millennials and define the problems they face currently:

1- As a millennial, I find it hard to motivate myself to hit financial goals
2- As a millennial, I find it difficult to know how well Im saving or spending in comparison to my peers
3- As a millennial, I don’t know what categories am i spending too much on? What should too much be for me?

With Facebook being the social platform for most millennials, this can be a way for users to share expense data anonymously and also get data driven value from it. Let’s focus on the 2nd and 3rd problems here.

The user will provide basic demographic information (Facebook already knows most peoples’ birthdates, current city and marital status). So, this may not even be required for most users. Users will then have to link their credit card/checking account info.

As most existing financial services offer right now, we’ll provide an analysis of the expenses in a pie chart broken down into categories. But additional benefit comes with another pie chart that showcases the average spending breakdown for that same demographic of people.

Based on that, Facebook can offer actions that the user can take to hit their financial goals.

We can use the same donation model that Facebook has already rolled out for users to advertise when they’ve reached or accomplished their financial goals they set up.

Bijan
Guest
Bijan

Thanks for the answer. I think it has a good structure. You list out the needs of the users really well which is good. However, one can argue that the needs are not unique to the millennials user group. I would have tried to pick use cases that are more unique to the particular user group of millennials.
I also like how you listed a couple solutions. Couple things you can do to improve this part: 1- list out a bunch of solutions to give yourself some options to chose from 2- do an evaluation of the solutions based on some criteria (I’ve seen many people go with impact on customer, and cost of implementation). Once your analysis is done, you can summarize your answer by describing which of your suggested solutions will be part of your MVP. Hope it helps.

Anonymous
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Anonymous

Hello Bijan, I had a different take on this problem.

First, I would ask FB’s goal – Say Increased engagement.

First I would ask the interviewer what saving money is. For this I would explain the following:
Saving money can be achieved by increasing income/interest etc or reducing cost/

So increasing income aspect – I would say the following options are possible – Banking/Financial Services/Credit services/Help find a better job for you

Saving money through reduced cost will include the following options – Apartment finder, Grocery services, Marketplace, travel services, local services – e.g. plumbing, contractor, handyman, carpenter, etc., Realtor, Insurance, Education, Healthcare.
Essentially I analyze all the possible aspects the customer can save money via reduced cost.

So I would understand this first.
Assume the interviewer asks me to choose one branch.
I would choose the reduction in cost. Reasoning being, it is not a completely new vertical like financial services, which would mean significant partnership with banks and financial institutions.

Here the typical customer profile would be – age 20 – 45, who wishes to use FB as her one-stop place for accessing services that are needed in daily life.
Further I would then prioritize among the various services that I have listed using 3 dimensions – Benefit, Cost and Risk. Essentially Benefits would include Business, Strategy as well as customer benefit, Cost – operational and developmental cost and Risk could include – business, legal, time of development risks etc

I will then prioritize this and then if the interviewer further asks me to show the way I would design each of these apps, I would then use the CIRCLES framework to design each of these apps.

Does this approach sound good?

Anonymous
Guest
Anonymous

Just to add, I’m analyzing the areas where the customer spends money typically in her daily life and see whether FB can help save money in those areas through its expertise.

Bijan
Guest
Bijan

Thanks for the note. I like how you take a more methodological approach in narrowing down the scope of the case. You also covered a broader array of ways to reduce costs which I think is a good approach. It certainly helps the interviewer see you’re not thinking about the question from only one angle and you have the big picture in mind, which is really good.