May 15, 2020 / Blog

PM Interview Questions: Answering the Estimation Question Effortlessly

How many windows are in Chicago? How many heads of lettuce did the country of Canada consume last year? How much do Americans spend on haircuts every year?

Estimation questions like these can often seem overwhelming, but with proper preparation, these are a great opportunity to showcase your creative side and logical thought process, while even possibly having a little fun! Let’s look at a step by step guide to easily answering this key product manager interview question.

What’s the Interviewer Looking For?

When you’re faced with this question in your product management interview (or really any interview), the interview frequently is looking for you to highlight several key skills. On a high level, they’re looking to see if you can make logical deductions and do quick math to reach a reasonable estimate. More so though, they also want to see you clearly communicate your assumptions, reflect on if you made any mistakes, and approach the problem in a concise manner.

Tackling the Question

Step 1Clarify the scope

Its critical to understand the question in its entirety. Without knowing all the parameters, it would be nearly impossible to solve the problem correctly. For example, if the interviewer said estimate how many people flew from NYC to LA last year, you’d also need to know in what time frame. It is perfectly okay to ask the interviewer clarifying questions to make the problem perfectly clear. For this example, let’s use the prompt “How many hotdogs were consumed in America last year?”.


Step 2Create the base equation

Next, you need to create the actual equation you’ll need to calculate the end number. This equation will often be structured as the objective = time frame * daily value. This is a simple equation, but it can also contain many more levels depending on the task at hand. Bouncing back to our hotdog prompt, we can apply the following equation:

Hot dogs consumed in the US = hot dog eaters in America * hotdog consumption of the average American


Step 3Break down the equations into mini-equations

Now, this is the fun part where you can use your creativity. What you need to do now is break down your base equation further into solvable chunks. In this example, you could do the following

Average American Hot dog consumption = (monthly summer hot dog consumption * months in the summer) + (monthly hot dog consumption * all other months)

Hot dog eaters in America = America’s population * (1- the percent of vegetarians)

Notice how this is where the creativity comes in. You could structure this equation in many different ways, whether that be by daily consumption, excluding vegetarians from the equation, etc. This is where your thought process can shine through – there is no right answer!


Step 4Assign variable values

After your equation is further broken down, you can begin to assign values to different variables. Many of your values will be assumptions, however, for each assumption, you should have a substantive, logical explanation to convey when you present the value. For example, here we can assign the variables the following values.

Average American Hot dog consumption = (monthly summer hot dog consumption * months in the summer) + (monthly hot dog consumption * all other months)

Average American Hot dog consumption = (2 * 4) + (1 * 8)

Hot dog eaters in America = America’s population * (1- the percent of vegetarians)

Hot dog eaters in America = 330mil * (1- .1)


Step 5 Calculate

Once you have broken your problem down to a granular level and assigned values, calculate it!

Average American Hot dog consumption = (2 * 4) + (1 * 8) = 16

Hot dog eaters in America = 330mil * (1- .1) = 300mil

Hot dogs consumed in the US = 300mil * 18 = 5.4B


Step 6Sanity check

Finally, check your final number and see if seems accurate. In this case, 5.4B may be a little too high. It’s okay (and even expected) to acknowledge this and retrace your steps to identify where the error may have occurred.

It’s important to note that while following these steps, it’s integral that you clearly communicate your thoughts to the interviewer and explain your assumptions. They want to see what you’re thinking and how you tackle problems.

Want more practice with estimation questions? You can get live practice and a list of questions here!

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