Strategy question
You are a Product Manager of a B2C organisation in the gaming space and have partnered with a SAAS solution provider. The provider has a pay-as-you-go SaaS pricing model. Due to the COVID-19 lockdown, you see an unprecedented surge in users which could lead to massive average charges as per the contract. What will be your strategy as a Product Manager to tackle this?
- PUBG Corporation
- Tencent
- Strategy
- Hard
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What this question tests
Tests crisis and vendor-contract management under a sudden operational cost shock caused by unexpected success (a good problem with real financial risk).
How to approach it
- Quantify the exposure first: project the actual overage cost under the pay-as-you-go contract based on the surge's magnitude and expected duration, not just react emotionally to 'costs are rising'.
- Open a proactive conversation with the SaaS provider immediately: explain the surge context (COVID lockdown-driven, temporary and unprecedented) and negotiate a temporary rate adjustment or volume-tier renegotiation.
- In parallel, look for technical mitigations: caching, request batching, or usage optimization to reduce actual consumption of the metered resource without hurting user experience.
- Assess whether this surge is temporary or a new baseline, since the response differs, a short-term negotiated waiver versus renegotiating the contract structure entirely for the new normal.
- Communicate transparently with internal finance and leadership about the cost exposure and mitigation plan, rather than letting the overage surprise them at the next bill.
What a strong answer includes
- Treats the vendor relationship as a partnership to negotiate proactively, rather than passively absorbing the cost or unilaterally cutting usage in a way that hurts users.
- Separates the technical mitigation lever (reduce consumption) from the commercial lever (renegotiate pricing), addressing both rather than just one.
- Uses an illustrative number, e.g. assume usage is running 3x contracted volume, to frame the urgency and size of the negotiation ask.
- Assesses whether the surge is temporary or a new baseline, since that changes whether you seek a one-time waiver or a fundamentally renegotiated contract.
Common mistakes
- Reacting only defensively (cutting product usage) without also pursuing a vendor negotiation, leaving value on the table.
- Failing to distinguish between a temporary spike and a permanent new baseline, which calls for different long-term responses.
Likely follow-up questions
- How would you decide which usage to cut first if you had to reduce load technically?
- What would you do differently in future vendor contracts to avoid this exposure?
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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 9: Prove it paid off: outcomes, economics, and pricing
- Chapter 14: Get the job: the AI PM interview loop