Strategy question
You own 6 pizza shops in the city and want to improve revenue. Do you develop a mobile app or use Uber Eats?
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What this question tests
Build versus partner strategic reasoning weighing cost, control, and reach for a small multi location business.
How to approach it
- Define the decision criteria, customer acquisition reach, cost structure of commission versus development cost, and control over the customer relationship.
- Assess building an app, high upfront development and marketing cost to get discovered, but full control over customer data and no commission cut.
- Assess using a delivery platform, instant access to an existing large user base and no development cost, but ongoing commission fees, roughly 15 to 30 percent, and no direct customer relationship.
- Consider a hybrid, using the delivery platform for reach and new customer acquisition while building simple direct ordering via a website for repeat customers.
- Recommend based on the shop's current scale, likely favoring the delivery platform first given only six locations, since an app has high fixed costs relative to that scale.
What a strong answer includes
- Frames this correctly as a reach versus margin trade off, not simply which is better, since the two paths solve different problems.
- Recommends a specific hybrid approach, using the delivery platform initially for acquisition while building a lower cost direct channel for repeat customers.
- Justifies the recommendation with the business's actual scale, six shops, too small to justify the fixed cost of building and marketing a standalone app.
Common mistakes
- Picking one option with no cost and benefit comparison shown.
- Ignoring commission cost as an ongoing expense when recommending a delivery platform.
- Treating the two options as mutually exclusive rather than considering a combined approach.
Likely follow-up questions
- At what number of locations would building a standalone app start to make sense?
- How would you measure whether the direct ordering channel is actually reducing dependence on the delivery platform?
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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