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Analytics and A/B Testing for PMs

Analytics interviews assess data analysis skills, experiment design capabilities, and the ability to interpret results. Data informs decisions but does not replace decision-making.

SQL Fundamentals​

Basic SQL proficiency eliminates dependency on data teams for simple queries.

Essential Queries​

Counting unique users: Use COUNT with DISTINCT on the user_id column to count unique users who performed a specific action (such as a purchase) within a date range. Filter with WHERE clauses on event name and date.

Segmenting by dimension: Group users by a dimension (such as country) using GROUP BY, count the results, and sort with ORDER BY to identify the largest segments.

These patterns cover approximately 80% of PM data exploration needs.

Cohort Analysis​

Aggregate metrics can obscure trends. Cohort analysis reveals changes over time.

Example: Overall 30-day retention is 35%.

CohortRetention
January45%
February40%
March25%

The aggregate hides a deteriorating trend. Cohort analysis identifies the pattern.

Cohort Table Format​

CohortWeek 1Week 4Week 8
January100%45%30%
February100%40%28%
March100%25%15%

This format reveals retention degradation across cohorts.

Funnel Analysis​

Funnel analysis identifies where users abandon a process.

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Overall conversion is 25%. The largest drop-off occurs at "start checkout" (40%). This is the primary investigation target.

A/B Testing​

Fundamentals​

A/B testing compares two versions with randomized user assignment:

  • Control group: Existing experience
  • Variant group: New experience

When to Test vs. Ship Directly​

TestShip Directly
Genuine uncertainty about impactObvious improvement (bug fixes)
Easily reversible changeInsufficient traffic for significance
Sufficient traffic for significanceUrgent (security fixes)
High-stakes decisionMinimal downside, easy rollback

Statistical Significance​

The 95% confidence threshold (p < 0.05) means: if no actual difference exists, results this extreme would occur only 5% of the time.

This does not mean "95% probability the variant is better."

Common Errors​

ErrorDescription
PeekingChecking results before planned end date increases false positive rate
Practical vs. statistical significanceA 1% lift may be statistically significant but not business-meaningful
Winner's curseExperiments that reach significance often overestimate true effect

Experiment Design Process​

  1. Write hypothesis - "Changing X will cause Y because Z"
  2. Define metrics
    • Primary: Target metric to move
    • Guardrail: Metric that should not degrade
    • Secondary: Contextual information
  3. Calculate sample size - Determine before starting
  4. Run full duration - Do not stop early based on interim results
  5. Check for Sample Ratio Mismatch - Verify expected allocation (50/50)

Experiment Design Example​

Testing: New checkout flow

Metric TypeMetricPurpose
PrimaryCheckout completion rateTarget improvement
GuardrailReturn rateEnsure quality decisions
SecondaryTime to purchase, payment method distributionContext

Sample size: Given 40% baseline activation, targeting 15% relative lift, 80% power requires ~3,000 users per variant.

Interview Question Types​

"Design an A/B test for X"​

Structure:

  1. Hypothesis with causal reasoning
  2. Metrics (primary, guardrail, secondary)
  3. Audience and allocation
  4. Sample size calculation
  5. Duration determination
  6. Analysis plan

"The test shows 3% lift. Should we ship?"​

Evaluation criteria:

  • Statistical significance and confidence interval width
  • Practical significance (business impact of 3%)
  • Segment analysis (consistent across user types?)
  • Guardrail metric status

"A metric dropped 10%. What do you do?"​

Diagnostic process:

  1. Verify data - Check for tracking changes, pipeline issues
  2. Determine timing - Sudden vs. gradual decline
  3. Segment - Platform, country, user tenure, acquisition channel
  4. Identify changes - Releases, campaigns, competitor activity, seasonality
  5. Form and test hypothesis

Limitations of Data​

Data indicates what happened, not why or what action to take.

Decisions That May Not Require Data​

  • Ethical decisions
  • Large strategic bets with sparse data
  • Design quality judgments

Common Analytical Errors​

ErrorDescription
Correlation assumed as causationUsers who complete onboarding retain better; onboarding may not cause retention
Optimization to local maximaIndividual test wins may not improve overall product coherence
Ignoring qualitative signalsObserving user behavior reveals context that metrics cannot

Company-Specific Approaches​

Booking.com​

High-volume experimentation (thousands of tests annually). Optimization for conversion. Case study in both experimentation benefits and potential manipulation concerns.

Netflix​

Personalizes thumbnails through A/B testing. Tests visual presentation, not just features. The same content displays differently based on user preferences.

Amazon​

"Two-way door" vs. "one-way door" decision framework. Reversible decisions require less analysis than irreversible ones.

Airbnb​

Discovered long-term effects that short-term tests missed. Algorithm changes that improved short-term bookings harmed long-term host satisfaction. Now considers ecosystem effects beyond test windows.

Microsoft (Bing)​

Identified measurement problems: ranking changes that reduced measured engagement actually improved user success (users found answers faster, clicked less). Metrics were measuring the wrong outcome.

Analytical Mindset Characteristics​

CharacteristicDescription
Comfort with uncertaintyAbility to acknowledge insufficient data without paralysis
Self-skepticismActively seeking holes in own analysis
PragmatismKnowing when 80% confidence suffices
CommunicationConnecting data to decisions and context
Ethical awarenessConsidering consequences of optimization targets

Analytics questions test judgment about data usage, not just statistical knowledge.