You are a new PM at Facebook. Design an app to help people save money.
+6 votes
1.1k views
in Product Design by (1.3k points) | 1.1k views

5 Answers

+2 votes

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%)

by (508 points)
+1
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.
+1
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?
+1
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.
+2 votes

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?

by (508 points)
0
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.
0
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.
+1 vote

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.

by (508 points)
0
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.
0
Bijan, I think solders15 was correct to mention that younger users are more likely to use an app to achieve the goal of saving money, compared to other user groups.
0 votes

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

by
+1
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.
0
Thanks for the feedback Bijan!
0 votes

 

The goal of Facebook is "to give people the ability to build community and bring the world closer together". I would think that the objective of this feature would be geared towards Engagement and Retention.

What does saving money mean to people?

In a person's life-time there are several big moments when saving money a big issue

                  1. Students that are going to college

                                    1. Tuition

                                    2. Living Expenses

                                    3. Loans

                  2. People saving up for a life event

                  3. People saving for a family

                  4. Price-sensitive people who like to save money in general.

To target the most general use-case, I will focus on #4. Price-sensitive people who like to save money in general. These people will most likely seek ways to save money through

Shopping best deals price comparison

Coupon/Promotional deals

Group Discounts

Seasonal sale advantage

Bonus Items

Scholarships

Tuition

Among all of these options that are related to money, the ones that align most with the notion of “saving money” as well as take advantage of the community that Facebook has would be taking advantage of group discounts.

Group discounts, or saving by splitting costs with one or more people can apply to a lot of things. It can apply to

                  1. Rides

                  2. Services

                  3.  Activities

                  4. Housing

 

1. Rides

                  Taking separate cars per individual can be expensive, especially if the travel distance is long or the travel time is high. Sharing rides is a good approach, but with Uber and Lyft, the pivot has to be different. Since Facebook allows connections with people you were comfortable enough to become facebook friends with, carpooling together for a consistent trip would save money and time for both parties.

 

2. Services

                  Services like nail salons, massages, pedicures can be bargained for a group.

3.  Activities

                  Activities like escape room, six flags, or amusement parks allow group discounts

4. Providing a way to split costs through shared housing  is one way to cut expenses

What is the most common scenario, and what is the market for each?

                  1. Rides for set commutes (School, work, large market)

                  2. Housing (Renters)

                  3. Activities (People with leisure time)

                  4. Services (People with leisure time)

 

We should prioritize based on the market segment size as well as options from requiring the least amount of involvement with the other party & essential to more interaction with the other party & the least essential. Going back up, we see that Housing and Commute rides are consistent variable costs that are almost unavoidable with the biggest potential market segment. Therefore, even though these two services have a higher bar for interaction and involvement, the motivation to make it work would be higher, therefore should be targeted first. 

For Phase 1 assuming we are going for either the commute or the housing options, there are 6 points I would vet.

1. Value for the customer

2. Value for the business

3. Cost for the customer

4. Cost for the business

5. Risk for the customer

6. Risk to the business

 If the objective was to increase engagement and retention on facebook by introducing this new feature I would look at a couple success metrics

Objective: % increase/decrease of the average time a user spends on Facebook

Key Results: 

Feature Usage/Number of new connection made through the future/Average chats and interactions/average engagement time in the feature.

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by (41 points)
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