Size opportunity for new product line
Company: Meta
Role: Data Scientist
Category: Analytics & Experimentation
Difficulty: medium
Interview Round: Onsite
An e-commerce site considers adding a "Home Office" product line. Before any A/B test, size the opportunity and recommend whether to proceed.
Assumptions (last quarter): 8M monthly active buyers; 30% browse adjacent categories monthly; their baseline purchase rate is 6%; AOV $60; gross margin 25%; expected attach of 0.5 items/purchase at $20/item; fixed setup cost $2M; variable cost $1 per browsing user reached; expected conversion uplift from better relevance and supply is +15% relative among the 30% segment.
Tasks:
- Estimate the monthly impacted population, incremental orders, revenue, and gross profit; include attach effect.
- Compute break-even months and sensitivity to ±20% errors in AOV and uplift.
- Identify the 3 most critical assumptions and how you would validate each with pre-experiment analyses (logs, surveys, cohort analysis) before committing engineering resources.
- Propose the initial experiment design (targeting, success and guardrail metrics, exposure ramp) if the pre-test business case clears the hurdle.
Overview: This question evaluates a data scientist's skills in financial opportunity sizing, sensitivity analysis, and experimental design by requiring quantitative modeling of impacted users, incremental orders, revenue, and gross profit for a proposed product line.