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As a part of job interview for Product Management position, I am asked to propose a new product functionality for existing product, determine its business value and calculate the increase on MAU(Monthly Active Users) after launch of the new functionality.

Product is a web app. The only data given is current MAU and DAU.

For example product is an image-sharing site and new functionality is searching the images depending on their dominant colors.

How I can determine the business value and increase in traffic? What are the things to check while determining these? What type of data do I need to make precise calculation?

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Since this is a job interview question and you only have MAU and DAU, you cannot possibly answer it with a precise calculation. It appears they are evaluating your problem solving skills to be able to make the calculation once you have additional information. So the answer they are likely looking for are the additional questions you need to ask in order to continue the analysis.

What is the current MAU compared to the MAU of the entire population user set? I.E., what is your MAU share?

What functionality are your competitors using, similar or the same to the proposed new functionality, and what are their market share?

What research has been done to date in the current customer segments that indicate this desired functionality? What additional market research can I conduct, surveys, focus groups, proof of concepts, experiments?

What level of investment is the company prepared to make and what is the desired increase in MAU?

What were the results of other new functionality projects in this company?

My approach would be to outline the kinds of questions I'll need to answer in order to answer the business value question and then outline my approach to get those answers.

There are likely more kinds of questions that need to get asked but I'll leave that to those who are far deeper in web page development.

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  • Actually it is an assignment and I am allowed to search through internet. Could you recommend any site or document about how I can do good market analysis for a new product functionality launch?
    – dreamworker
    Commented Apr 27, 2014 at 21:09
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Business value is likely difficult (if not impossible) to determine in advance for such features.

One pattern is to advertise for this feature even though it doesn't exist. Depending on existing traffic, one could compare the interest in 2 fictional products - one that has the feature, and one that does not. The difference in activity would be one empirical way that could be a basis for the value of such a feature and seeing if it is worth further investment.

Another pattern is to survey the existing user base and just ask them if they would be willing to pay for such a feature.

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I am still going to answer this because young PM's ask me questions like this all the time and it might prove useful in the long run.

Personally, I think there is one glaring problem here: If i understand the asker correctly they have asked how you can increase traffic? Traffic comes from somewhere...usually other sites or search engines so the MAU and the DAU have literally zero to do with acquisition since they are both about visitors who have already converted to users. Your challenge then is out further in the funnel...incoming traffic that have not converted?

Secondly, there is no business value in a bunch of traffic or users unless the user pays to belong to the site, in which case, halting churn is one approach you can take a stab at. Suggest an experience or feature that users have been clamoring for to halt churn or find something meaningful that creates desire you can unpack from your own user interivews (that is a long-term goal anyway).

But as the challenge is presented: let's say I have 1M MAU and none of them pay fees to belong to my site the business value is $0.00. Adding an additional feature? It's still $0.00 unless your feature converts them to paying customers.

The critical thinker in me says that they are wondering if you see the problem with their shitty question instead of trying to come up with an even shittier answer.

You do not need to know what other features and what other investments, blah blah blah. You need to know this: "what are you guys trying to do? Are you trying to just increase traffic? that literally has no monetary value" really? I doubt it. What they are likely trying to do is something truly specific, like upsell and cross sell existing customers- something way more tangible and goal-oriented than grow a user base which is just server-pollution IMO.

think about it more critically. And for heaven's sake don't believe for a second they know anything about what they are doing.

Good luck!

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  • XAU (DAU, MAU, QAU)... is usually a fraction of registered users, where the other fraction is inactive. Typically the business would define what qualifies a user to be counted as "active" (e.g. someone who visits/orders/clicks-through/accesses API daily, or weekly or monthly or quarterly...). One could increase XAU using various ways, i.e. by attracting new users (user acquisition) or encouraging inactive users to become active (s.a. via promotions, higher engagement).
    – bdutta74
    Commented Jun 5, 2015 at 3:42
  • The intrinsic value of approach would be defined by the value and cost of user acquisition vs user reactivation, and the potential to do the same. For example, it may be much easier (& economical) to reactivate high-value users, s.a. by gaining back their trust, getting them interested in functionality that they actually need, and building strong base of loyal customers.
    – bdutta74
    Commented Jun 5, 2015 at 3:43
  • As you and others have rightly said, the interviewer is most probably looking for the interviewee to ask (enlist) the right set of questions, to see how they approach the problem, and evaluate the interviewee's analytical and problem-solving skills.
    – bdutta74
    Commented Jun 5, 2015 at 3:43

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