Lesson 1: Tradeoff Question Overview

Tradeoff questions are uncommon in PM interviews, but are a regular feature during the Analytical portion of the Meta interview progression. While these questions take on significant importance to Meta candidates, there hasn’t been a widely articulated approach for tackling them the way there is for other case interview questions. This article introduces the Product Simply approach to the Tradeoff question, which is in turn a simplified version of the Product Simply approach to Strategy questions. As with approaches elsewhere in this course, it is designed to be flexible but repeatable. This is nowhere more important as in the Tradeoff question, where there is sometimes more ambiguity and variability in the questions asked than in other cases.

Objective

In these questions, your task is to use metrics to come up with a recommendation or point of view given some hypothetical situation. In all cases, you can imagine yourself as either having run an A/B test, or about to run one in order to answer the question.

Perhaps more than any other company, life at Meta is centered around A/B tests to establish facts. By demonstrating that you think about a wide variety of problems from the perspective of evaluating different branches of an experiment you can also demonstrate that you can work well at the company.

You also have the opportunity to communicate to the interviewer that you understand the implications of A/B tests, which is where the tradeoffs come in. When you run an A/B test, you will almost invariable discover that you can’t get one thing (often the thing you want), without also sacrificing something else that’s important.

In sum, your job is to both understand how to use metrics to understand the facts, and then understand the broader implications of those facts to make a decision or informed recommendation.

Common Questions

While Tradeoff questions may not appear to be about A/B tests on their face, each of them ultimately does boil down to it. Here are some common questions that show up time and again:

• 1x1000, 100x10. This question asks you to consider between two scenarios, one in which you have 1 group/event/etc. of 1000 users, and another with 100 groups/events/etc. of 10 users. This is an A/B test because you can imagine the “scenarios” are actually just the results of two different variants in an experiment.

• 5% up, 5% down. This question is a follow up to a question about success measurement, such as for Instagram Reels. You are told that you made a change and your metric went up but a related product’s metric (e.g., Instagram Stories) went down. This is an A/B test because that’s how the 5% figures were calculated.

• How do you optimize? This question asks you how you would optimize something, such as the rate of displaying ads. This is an A/B test because there is not better way to optimize than by running a variety of experiments and comparing their performance.

The Approach

Given your need to establish facts and implications to arrive at a recommendation, your answer should demonstrate structured thinking, strategic insight, and the ability to work cross-functionally to arrive at a well-informed decision. The recommendation approach attempts to do this using a three-part framework: Fact Finding, Strategy, and Cross-Functional Collaboration.

1. Fact Finding: Start with the Data

There are a number of pitfalls to avoid at the start of your answer. If you fail to gather all the necessary facts by asking clarifying questions, you are putting yourself in a precarious position. On the one hand, you might not be demonstrating a sense of what metrics might be useful. On the other hand, you may have failed to clarify essential facts that weigh on the tradeoff. Remember: tradeoff questions often hinge on two or more competing metrics. Your job is to dig into the data and understand the full context.

In this stage, you should:

• Clarify the metrics involved: What exactly are you being asked to balance? Whether it’s user engagement versus revenue, or time spent on one feature versus another, you need to be crystal clear about what each metric represents.

• Evaluate absolute vs. relative values: A percentage change without context is meaningless. Always seek to understand the absolute numbers behind the percentages. For instance, a 5% drop in a smaller metric may be less impactful than a 5% rise in a larger one. Ask yourself: “What is the real-world impact of these changes?”

• Investigate supporting metrics: Don’t stop at the primary metrics. What are the second- and third-order effects of the tradeoff? Consider metrics like user retention, long-term engagement, or any guardrail metrics that may reveal deeper insights.

Example:

In a question about balancing two competing features, such as Instagram Reels and Stories, you might find that a 5% increase in Reels engagement comes at the cost of a 5% drop in Stories. Your fact-finding should involve not just looking at the raw percentages but also considering how this affects overall engagement on the platform and whether this tradeoff impacts other critical metrics like ad revenue or daily active users.

2. Strategy: Weigh the Broader Impact

Once you’ve gathered the necessary facts, the next step is to evaluate the tradeoff from a strategic perspective. This is where you consider the broader business implications of the decision.

In this stage, you might focus on:

• Product positioning: What is your product’s role within the company? For instance, is one product part of a strategic initiative (e.g., competing with TikTok) that carries more weight than another? How does this tradeoff affect the company’s larger goals?

• Long-term impact: Go beyond the numbers and think about long-term growth. Sometimes, a short-term hit in one area is acceptable if it advances a bigger strategic priority. For instance, sacrificing a small drop in engagement for a more significant competitive edge could be worth the tradeoff.

• Balancing priorities: Not all metrics are created equal. Your job is to articulate why one metric (or product) might take precedence over another, aligning your reasoning with the company’s mission and competitive landscape.

Example:

In the Meta interview, if you’re evaluating a tradeoff between Reels and Stories, you might consider the broader competitive landscape. Reels competes directly with TikTok, a fast-growing platform, while Stories competes more with Snapchat. You could argue that winning the short-form video battle against TikTok is more strategically important, even if it slightly cannibalizes engagement from Stories. This demonstrates that you’re thinking beyond just the immediate data and considering the company’s long-term positioning.

3. Cross-Functional Collaboration: Bring in the Teams

Tradeoff decisions in the real world rarely involve just one team or metric. To make well-rounded decisions, you need to consider the input and priorities of cross-functional teams. While this section isn’t always necessary (such as when the tradeoff doesn’t involve another product), product cannibalization scenarios are common, and this technique demonstrates your ability to navigate a complex organization with competing goals. It also serves a useful rhetorical purpose by allowing you to make a choice without feeling tied down to the product you were assigned to at the beginning.

In this stage:

• Collaborate with other teams: Identify which teams are responsible for the competing metrics or features. Bring them into the discussion to gather their insights and ensure the decision aligns with the broader company goals. For example, if one metric relates to ad revenue, you’ll need to consult the team responsible for monetization.

• Escalate when necessary: Many tradeoff decisions will require input from higher management. Be prepared to explain how you would escalate the issue and present a cohesive, well-researched recommendation that considers all angles. This demonstrates that you can handle complex, multi-team scenarios and work toward a resolution.

• Decide. Having assembled all the facts, pretend that you are the higher level of management and explain your final decision.

Note: if you don’t need this section, you will still need to decide and explain your final judgment.

Example:

In the Reels vs. Stories scenario, after fact-finding and evaluating the strategic implications, you would bring your findings to the Stories team to discuss their priorities. Together, you’d escalate the decision to higher management, presenting a comprehensive analysis of the tradeoff and making a clear recommendation on which direction to take. This collaborative approach ensures that both sides are considered, and the final decision is well-informed.

Final Thoughts

Remember, the key to these questions is to see them as A/B tests. If you aren’t comfortable with experimentation, I highly recommend that you do a quick refresher before your analytical interview. You must be comfortable thinking through these ideas as experiments to be convincing. It isn’t a high bar! You just need to feel comfortable at a conceptual level.

While it might go without saying, remember not to lead with your recommendation. You should provide a full assessment before making a choice in any case interview.

Good luck!