You're a PM for Instagram. You notice the Month - on - Month retention is down by 20%. What might be happening?

This question asks you to evaluate a potential problem - a decrease in retention - within a well-established product, Instagram, and diagnose possible causes. Here are a few strategies to approach this:

1. Identify variables: Think about external and internal factors that could lead to a decrease in Month-on-Month retention. External factors might be increased competition, changes in the age demographic of the users, or emerging trends in social media that Instagram isn't accommodating. Internal reasons could include a new update or feature that doesn't resonate well, or a technical issue causing user experience problems.

2. Measure impact: Discuss how you would use data and user feedback to confirm your hypothesis. It's essential to show that your decision-making process depends on quantifiable metrics and direct user feedback.

3. Propose solutions: Once you've identified possible reasons, provide potential solutions to rectify the problem.

My first hypothesis would be internal factors contributing to the 20% drop in Month-on-Month retention. For example, Instagram may have rolled out a new feature or update that hasn't been favorable with users. We would need user data and feedback to validate this.

To get a sense of what's happening, I would first look at the usage statistics around the time the update was released. If there's a noticeable drop after the release, the update could indeed be the problem. I would also check the app store reviews before and after the update release. If there are significantly more negative reviews about the new feature or the functionality affected by the update, this is another indication of the problem.

As a solution, we might need to re-evaluate the controversial feature and address the users' concerns highlighted in their feedback. Additionally, pushing for releases to be more iterative could also help. This way, any potential negative impact an update or feature would have would be limited, giving the team a chance to rectify issues before they significantly affect user retention.

Another possible reason for this could be external competition. Other social media platforms might be launching new features that are attracting Instagram's users, leading to a drop in retention.

By conducting a competitive analysis of other social platforms, we can identify what new features or services they’ve rolled out recently that may be attracting our users. We should also look at social media trends that Instagram might be missing out on, as this could cause users to use other platforms that offer these trends.

If my hypothesis is correct, we would need to innovate our product offerings to stay competitive. This could mean introducing features based on user demand or trends, as well as potentially partnering up with popular figures in the social media space to boost Instagram's appeal."