Product design question
Why did Instagram invest in Reels?
- Product design
- Medium
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What this question tests
Tests strategic reasoning about a real, well-documented competitive decision: can you connect a specific product bet to the competitive and business context that actually drove it.
How to approach it
- Identify the competitive trigger: TikTok's rapid rise in short-form video was pulling both usage and ad dollars away from Instagram's core feed and Stories formats around 2020.
- Explain the strategic logic: rather than let TikTok own short-form video uncontested, Instagram needed its own entry to defend both user time-spent and ad revenue within its existing massive user base.
- Note the distribution advantage: Instagram could seed Reels using its existing user base and Explore/feed surfaces, giving it a faster bootstrap than a standalone competitor would have.
- Address monetization: video ad formats and, eventually, creator monetization tools were a way to capture the same ad demand shifting toward short-form video, rather than losing that market entirely to TikTok.
- Acknowledge the risk taken: cannibalizing existing feed and Stories engagement was an accepted trade-off, betting that owning short-form video mattered more than protecting other formats.
- Summarize the rationale as primarily defensive and strategic: protect time-spent and ad revenue against a fast-growing competitor, using Instagram's existing distribution as the advantage.
What a strong answer includes
- Names the actual competitive context (TikTok's rise) precisely rather than describing Reels as an organic feature addition with no external pressure.
- Explains the distribution-leverage logic, that Instagram could bootstrap a new format faster using its existing massive user base, unlike a challenger starting from zero.
- Acknowledges the accepted cannibalization trade-off explicitly, showing understanding that this was a considered bet, not a risk-free decision.
- Ties the strategic move to both user-engagement defense and ad-revenue defense, not just a single motivation.
Common mistakes
- Describing Reels as simply 'a cool new feature' with no mention of the competitive pressure from TikTok that actually drove the decision.
- Ignoring the cannibalization trade-off and distribution-leverage logic behind the timing and execution.
- Treating this as purely a user-engagement play with no mention of the advertising-revenue defense angle.
Likely follow-up questions
- How would you measure whether the bet on Reels paid off relative to what was cannibalized?
- What would Meta have done differently if TikTok had not existed?
- How does this decision compare to YouTube's launch of Shorts around the same time?
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Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 4: Discovery and strategy for AI products
- Chapter 7: AI UX and human oversight: design for a system that is wrong sometimes
- Chapter 14: Get the job: the AI PM interview loop