Lesson 2.1: The Five Rules

As you’ve learned, every product has a fundamental purpose that forms the bedrock of its goal. For instance, the purpose of Instagram Reels is to get people to watch videos. While this conclusion might seem intuitive, it raises the question: why isn’t the primary goal to get people to like, comment, and share videos, or to focus on encouraging creators to upload more content?

The task may become more challenging when considering less familiar products, such as Facebook Events, WhatsApp messaging, LinkedIn’s verified badge, or Tinder.

To deliver a great interview response, knowing the “correct” goal of these products isn’t enough. As a product manager, demonstrating depth of insight requires understanding what makes a goal the right one from first principles and effectively communicating that to interviewers. Once we grasp the underlying principles of what makes a goal appropriate, we can consistently identify the goal of any product and convincingly explain our reasoning to the interviewer.

The following rules represent one possible approach to defining a product’s core purpose. When reviewing these rules, focus on understanding the rationale behind each one. These rules are not meant to be memorized but rather comprehended; with a full understanding, you should be able to confidently identify a credible goal, even for the most obscure products. That said, feel free to add them to your Cheat Sheet!

Let’s begin.

1. The goal is always a type of engagement

While your goal won’t be just “engagement,” it will always be a type of engagement appropriate for the product’s use. Other objectives like acquisition, retention, and monetization are important, but they all depend on engagement to be meaningful. Consider:

• We want to acquire users so the product is used more.

• We want to retain users so the product is used more.

• We make more money only if the product is used more.

Engagement simply means “people use the product.” Your job is to get people to use your product above all else. If people don’t use the product, it fails, and the PM in charge may face consequences.

There are many types of engagement relevant to your product. Here are some examples:

• Viewing content.

• Making a purchase.

• Sending a message.

These are all forms of engagement because they represent specific uses of a product. Each reflects the intended purpose of the product. Not included in this list is “entering the settings menu,” not because it isn’t engagement, but because it’s unlikely to be the product’s intended use*.

Here are some activities that do not represent engagement and should not be used as goals:

• Signing up for a service (unless the product is the sign-up flow). This reflects acquisition, not engagement. What happens if people sign up but don’t use the service?

• Generating revenue (from the company’s perspective). This reflects monetization, not engagement. What happens if you generate more revenue but reduce product usage?

• Keeping users on the platform. This reflects retention, not engagement. While it implies usage, it is unspecific and doesn’t focus on what you want people to do, but only what you don’t want them to do—that is, leave.

2. The goal is a specific type of engagement

What do people use your product for? Above all else, your job as a product manager is to ensure that people use your product for its intended purpose. Therefore, you must articulate your goal to reflect a specific activity. This might be viewing something, clicking something, buying something, or any other behavior that can be clearly identified.

General objectives such as “increasing engagement” or “driving adoption” are not sufficient. Such statements are so broad that they could apply to any product and provide no actionable direction. If I told you to increase engagement for a product without specifying its use, how would you proceed? To define a goal properly, we must specify what engagement means for that product.

There is a place for discussions on engagement, retention, monetization, and acquisition, which we will cover in another lesson. However, when defining the goal itself, these terms alone do not amount to a success criterion needed to drive experimentation for your product.

The specific behavior depends on the product at hand. If your product is about short-form video, then the goal should be centered around videos!

You can’t set a goal based on more than one activity at a time or combine multiple metrics into an index or composite. From first principles, this is because having a single goal is easier to attain than several. Additionally, the ideal goal will tend to be the ultimate outcome of all other behaviors involved in a product’s use.

Combining multiple activities or metrics into a single goal makes experimentation and decision-making difficult.

When you combine multiple metrics, it complicates the analysis. If your metric changes, how do you determine which component caused the change? You’ll need to immediately break down the components to understand the reasons behind the change. This defeats the purpose of combining them. A single, clear metric is easier to analyze and yields more actionable insights.

Combining multiple metrics into an index or composite also complicates decision-making. How do you weight the different components of an index? Can those values change over time? These questions highlight the complexity and potential arbitrariness of composite metrics.

For example, if your goal is “engagement” and you combine “likes,” “comments,” and “shares” into a single metric, how do you decide which of these actions is more important? If you decide likes are worth less over time as user behavior changes, your goal becomes a moving target. A single metric provides clarity, making it easier to identify what matters most and to make decisions that drive product success.

3. The goal is on the demand side

Most value exchanges happen as a give-and-take exchange between parties. One party will give something (the supply side) and another will take it (the demand side). No value exchange can happen until the person takes from the person willing to give.

In other words, the goal of any given product isn’t achieved until the demand side comes along and does their part. For that reason, the goal of any product should be framed from the demand side.

Here are some examples that drive this point home:

• Nothing happens until someone buys something at the store.

• Nothing happens until someone reads the book.

• Nothing happens until someone picks up the phone call.

So what are the goals for these simple products?

• The goal of the store is to get people to buy things.

• The goal of the book is to be read by someone.

• The goal of the message is to be received by someone.

The last one might be hard to imagine. How is it that the person sending the message is on the supply side? Just imagine that a message is a notice that the recipient won the lottery. The recipient wants to get this message—they demand it. The sender of the message is supplying the information that it contains, in this case a valuable prize. So, the sender is the supply and the receiver is the demand. Another analogy is the video product. The sender is upload a video (sending a message) and the recipient is viewing the video (reading the message). In other words, the goal here is to get people to read messages.

4. The goal is the highest-value activity

Why does someone use your product? What keeps them coming back over and over again?

Your goal should reflect the core value proposition of the product—the reason people come to the app in the first place. Imagine the user journey: at what moment does the user feel they gained something? When do they accomplish something they care about? When do they smile?

Your job is to get people to do the thing they like most about your product more often. A successful product excels at delivering its core value to people, so defining success relative to that value keeps you focused on delivering that experience effectively.

For most apps, the goal is clear. For instance, a video-watching app’s value is realized when someone watches and enjoys a video. Users value the experience, making it worth their time.

In other scenarios, it might not be as obvious. Consider a dating app. Users gain value from various activities: browsing profiles, matching, and sending messages. However, the highest value occurs when two people successfully meet. It’s a validating and satisfying moment that could turn into something bigger.

You might argue that messages sent after matching have more value than the match itself, since that may better indicate that there is a spark between the two users. If you believe this, make your case during your interview! Just be sure you are focused on that moment of greatest value. A single message may not be as valuable as the match itself since it requires a response to have value. Further messaging might be necessary to confirm the match’s effectiveness, potentially making it hard to pinpoint the “right” amount of messages.

Also, you can frequently identify the moment of greatest value because it sometimes is the moment that the product is monetized. Some examples:

• Instagram Reels: monetized at the Reels view level

• Amazon: monetized at the moment of transaction

This is not always the case, especially with subscription products.

5. The goal is something that happens within the app

Your job is to make your users use your product more, and your ultimate desire is to improve their experience because of it. Although your success depends on long-term outcomes, these are often difficult to measure in a timeframe that allows for effective A/B testing or product development. Therefore, your product’s purpose—and thus your goal—must be defined by something that happens within your app, without considering downstream outcomes¹.

Using the dating app example, your goal shouldn’t be “people get into committed relationships” or “make relationships better” because these are outside of your product’s control. While these might be desired outcomes, without measurable data on these outcomes—via surveys or other mechanisms—they are not actionable. We need real-time information for effective A/B tests, and surveys take too long to create, execute, and analyze. They may be useful for periodic reviews of the vision, but not for experimentation.

This principle also applies to activities within parent apps or other apps in the ecosystem. If your app is part of a superapp like Facebook, you can’t set a goal like “people use Facebook more” because you aren’t directly responsible for Facebook’s overall usage. Your product might not have enough impact on the larger app, even if you are improving your sub-product measurably.

Using the Five Rules in the Behaviors Section

It’s not strictly necessary to discuss each of the Five Rules during an interview. However, Rules 3 and 4 can be very useful, particularly during the Behaviors Section. As is discussed in the next lesson, the behavior section requires you to explain clearly which user behaviors drive success, and it stands to reason that the explanations provided by Rules 3 and 4 can be very useful.

A Sneak Peak: North Star Metrics

The North Star metric follows directly from the choice of goal, and for that reason, the principles above apply to those metrics too. Here are some products and a proposed north star for each. Which of them are the right ones? Why or why not? Which would better reflect the principles above?

• Instagram Reels: the number of videos uploaded by creators per day

• Tinder: the number of confirmed marriages per day

• Amazon: the number of products viewed per day

• Facebook: the total number of ad impressions per day

• TikTok: the total number of engagements per day

• LinkedIn: the total number of posts and comments per day

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Footnotes

* You can imagine a scenario in which it is the product’s intended use. Specifically, if you are asked to measure the success of a settings screen. Outside of this (unlikely) scenario, this wouldn’t be a credible choice for a goal activity.

¹ While your goal won’t be defined by long-term outcomes, you will in many cases need counter-metrics to ensure that the ultimate vision is being attained. This can include by paying attention to things that may undermine your vision even if your “in-product” goal is being attained.