Problem Manager (PM) - Interview Case Study

PROBLEM STATEMENT

"Cars24, being the market leader in Used car supply, inspecting more than 60,000 cars on a monthly basis, is looking to venture into selling used cars directly to end-buyers. As a Product owner, how would you go about designing a MVP & business model to solve the user problem of selling a car at the best price to maximise seller conversion defined as cars sold through Cars24. 

Data Points: 

• Total Supply - Sellers who shared intent to sell monthly/Website Appointments ~ 3 Lakhs

• No of sellers coming to retail centres/Inspections ~ 80,000

• Inspection to Sale ~ 20% with average selling price of 3 Lakhs  

The objective is to have a structured discussion on a problem statement during the interview process to understand your ability to articulate the problem statement, build a hypothesis and design a MVP.  "

SOLUTION

GOAL: Maximise seller conversion

INSIGHTS FROM DATA :

1. Only 27% of those who show intent visit the retail centre (80,000/300,000)

2. 20% of those inspected make a sale

3. The average seller price is Rs 3 Lakhs

CURRENT BUSINESS MODEL (my understanding from publicly available sources) :

1. A seller shows an intent to sell their car by filling a form on the Cars24 website

2. The seller provides his/her current car details and is given an estimate quote

3. The seller then needs to visit one of the Cars24 retail centres where there is an in-depth expert inspection of the car

4. Based on the scientific inspection and live online auction, the selling price is quoted to the seller.

5. There is a bid which opens up for 45 mins-1 hr wherein the bidders are mostly second-hand car dealers

6. The highest bid if accepted by the seller is seen as a mark of deal completion

7. The seller needs to provide third party insurance (existing or new) and the RC transfer is taken care of by Cars24

8. The seller receives the amount in their bank account

9. Since the bidder is a second-hand car dealer, they need to find an actual buyer in whose name the transfer can be made and the deal be completed

10. Cars24 earns a cut from the buyer and seller

DESIGNING THE MVP

STEPS :

1. AUDIENCE (Identification and Understanding)

Sellers :

i) Anyone who owns a car and wants to sell it

ii) Wants to get the best price possible

iii) Does not want to deal with the hassles of dealing with multiple agents, buyers, govt departments, etc.

Buyers :

i) Mostly first-time car buyers

ii) Get most of their information from online research and speaking to people

iii) Want to buy it from a reliable source who they trust so that legal issues and other problems do not arise later

iv) Would like a service promise in some form in case any disputes arise, car does not function as promised, etc.

v) Wants to see/test drive the car before buying so that they can feel convenience, performance, etc.

vi) Might take a loan or financing assistance to fund the purchase

2. HYPOTHESIS (Definition and Assumptions)

• A) If we ask the seller for pictures of the car beforehand and assign a representative to go at their place to inspect the car, this will increase the sellers interested to sell from 27% to 54%

ASSUMPTIONS

i) Sellers are reluctant to visit the centres due to busy schedule and other time commitments

ii) The seller does not want to visit the centre with a certain estimate to be told that the actual price they will get is less

iii) The seller wants to know the exact price that they will be able to get

• B) If we can make the RC transfer to the actual owner faster the inspected to sale ratio will increase from 20% to 40% (ideally it should be higher than even this)

ASSUMPTIONS

i) Sellers do not convert after inspection because they feel the timeline to make the transfer is higher

• C) Higher bid amount will lead to more converts

ASSUMPTIONS

i) Sellers do not believe the price quoted by the highest bidder is the right price for their car

• D) Financing options to the buyer - in an instant, hassle-free manner

ASSUMPTIONS

i) Buyers will make faster purchase decisions if they know that they have the source of money to fund the purchase

• E) Service Guarantee of the car + Road Side Assistance

ASSUMPTIONS

i) Buyers might be considering buying a first-hand car as opposed to a second-hand car so having a service guarantee in place for parts or damages occurred will convert them to be second-hand car buyers

• F) Increase top-line by providing an exchange program - more number of sellers showing interest to sell cars on Cars24

ASSUMPTIONS

i) Seller conversion will increase if they get an option to buy another car using an exchange. Since they are already car owners, they will be buying another car after selling the current one: so why not convert them into buyers and increase the seller conversion rate

• G) Add buyer trust score that sellers can view

ASSUMPTIONS

i) Sellers are willing to sell to verified vetted buyers.

• H) Show number of bids (FOMO) against the cars so we can have like a trending cars categories and ensure more quality sellers & fast conversions

ASSUMPTIONS

i) Buyers will get more inclined to bid fast if they see already there are so many bids made and they need to act fast for the trending cars

• I) Recommender system to capture buyer intent, details, aspirations, and suggest cars so that the discovery process is smoother

ASSUMPTIONS

i) Having a guide to help buyers will increase conversions and faster decision making process

• J) Cars24 Pay

ASSUMPTIONS

i) Having a guide to help buyers will increase conversions and faster decision making process

3. MVP (Features and Success Metrics)

A) Sellers can upload pictures of the car beforehand and a representative will go at their place to inspect the car, this will increase the sellers interested to sell from 27% to 54%

B) Ability to track RC transfer status on the platform itself and enable upload of all documents directly on the system for faster transfer (inspected to sale ratio will increase from 20% to 40%)

C) Show sellers max price possible in a bubble chart form (any other visual format) across data points from different sources - across cities, models, makes, prior transactions so they feel the pricing is transparent

D) Show financing options to the buyer along with the car details - in an instant, hassle-free manner

E) Highlight and show examples of service Guarantee of the car + Road Side Assistance

F) Increase top-line by providing an exchange program - more number of sellers showing interest to sell cars on Cars24

G) Add buyer trust score that sellers can view

H) Show number of bids (FOMO) against the cars so we can have like a trending cars categories and ensure more quality sellers & fast conversions

I) Recommender system to capture buyer intent, details, aspirations, and suggest cars so that the discovery process is smoother

J) Cars24 Pay

K) Give an impetus to bid faster - like a gamification thing to drive faster convert

L) Increase the anchor price of the car in the minds of the buyer by comparing it with models sold at higher pricing or that of the new cars in the market

M) Set own pricing for buyers to buy instead of the bid system based on industry standards/using existing data points (related to the anchor price)

N) Virtual/VR tour of the car by the buyer before visiting the centre or the seller home to have a clear understanding of what they are getting in for

O) Show insurance options that exist for the buyer to upgrade to in addition to the existing insurance that the car has

4. PRIORITISATION (Impact and Cost)

Based on impact and cost, we can go ahead with A, D, E, F, H, I, O for MVP

Basis these features :

• Top-line will increase

• % of converts for selling will increase

• Conversion % (inspection to sale) will improve

• Average selling price per car will increase

5. BUSINESS MODEL

i) Manage the entire end-to-end buying and selling experience for both sellers and buyers

ii) Sellers list their cars, and get paid based on value as proposed by expert inspection

iii) Sellers will get a higher price since the second-hand car dealers are not involved and its direct selling to end users

iv) Cars24 can decide to take a higher cut from the seller (NOT RECOMMENDED)

v) Cars24 should sell value added auxiliary services such as road side assistance, financing options, their own payment system (if need be), insurance options, etc on a subscription model basis

vi) You can also earn in terms of premiums (insurance) and interests (payments)