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Design a friend recommendation system for Facebook.

You Can Use Decision Trees if you want( technical) or Product Design Framework( Product Design).
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Clarification question:

Am I designing a brand new friend recommendation system or improvising the already existing one? The Former.

User Groups:

Since the friend recommendation system is a must-have thing for FB and is common for everyone in the social media platform, there is no need to think differently for different user segments.

 Let A and B be Facebook friends, and we are trying to build a recommendation system to decide whether to suggest C as an option @ the People you may know the list.

  1. If A and B have a mutual friend C, there is a high chance that person C might be a friend of A. 
  2. If A and C have gone to the same school at the same time period, i.e, a difference in time of about +2 or -2 years, person C might be a good option to suggest. This is because a person who passed out of school in 2015 might not know someone who entered the same school @ 2015 for his/her sixth standard
  3. If A and C have gone/goes to the same workplace at the same location, we have a good chance of both of them being friends.
  4. If A and C have reacted to the same posts for a long time and thus showing the same interest can be paired out as a friend. However, this has the least priority as they might not know each other.
  5. If A and C have some mutual private groups, they can be paired as friends and be suggested to others. For example, some alumni group.
  6. If A has searched and viewed a profile C, then they could be shown as the fact that they have searched and viewed shows they are interested in and know each other somehow.
  7. If both A and C are tagged in a photo of a post of some friend.
These will be the criteria that will be checked upon before recommending someone to some other.
 
P.S: I'm not sure how good the solution is and not sure of my structure too. Looking forward to your constructive criticism to develop my answer.
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I think it's fine to take a different approach than the standard "product design" framework but if that's your goal, I strongly suggest you clarify this during the very beginning of the interview. You can say something like "I'm going to Facebook Recommendation UI already exists and we are just thinking about the algorithm that determines who should be suggested as a friend". 

I think in this case, you still have various user groups. It will be a great idea to pick one user group (e.g. college students or seniors) and determine who you would recommend. You can come up with a bunch of ideas, then evaluate them, and prioritize the ones you think should be built. 

This article might also help you How to answer a Product Design question in a Product Manager job interview

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