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Case Interview Fundamentals: Lesson 11 [Drill: City bikes utilization rate] — Transcript

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0:00In this brainstorming drill, we're going
0:02to work with a pretty typical metric in
0:06a lot of cases, utilization rates. And
0:10we're going to do so for a public sector
0:12problem, but it's really
0:15you shouldn't call it a public sector
0:17problem. I don't know why I called it.
0:19It's just a a service that people use.
0:23So, it could be a private sector as
0:25well. But, it could be public sector,
0:27too.
0:28So, how to increase public bikes
0:31utilization rates?
0:33Let's jump into the case question. So,
0:35consider the following context. You're
0:37doing a case, and the case is about a
0:39certain city that has bicycles as part
0:42of the public transport system. So, in
0:45this city, citizens can, for a small
0:47fee, get bicycles in one of hundreds of
0:51pickup stations, and then drop them off
0:54in any other station. So, kind of a
0:56shared service for bicycles. Uh people
0:59can use those along with buses, with
1:03uh the metro or the subway system, and
1:06so on.
1:07And there's no private competitor. So,
1:09these are the only shared bikes in the
1:11city. Now, you're doing this case,
1:14you're
1:15you know it's about optimizing
1:18uh the system.
1:20And in the middle of the case, the
1:21interviewer comes to you with this
1:23question. What are things that the city
1:26could do to increase the utilization
1:28rates of these bikes? So, one way to
1:31make the system more efficient, uh work
1:34better, is to increase the utilization
1:37rates.
1:38So, what can a city do to increase
1:40utilization rates of its shared
1:44bicycles?
1:45Now, time for you to pause this video
1:48and create your own uh generate your own
1:50ideas, your own hypothesis for what can
1:53the city do
1:55in a structured,
1:57preferably prioritized way.
2:00Now, let's see my answer.
2:03So, I'm going to define utilization
2:05rates as the number of hours per day
2:08that the average bike is in use. Of
2:10course, the maximum is 24 hours. So, if
2:13these bikes are in use for
2:1610 hours nowadays, how can we increase
2:18that to 11 to 12 hours per day?
2:21Uh and of course, we could do that by
2:23reducing the number of bicycles or
2:26increasing the usage.
2:28But, just taking bicycles off the system
2:31might not be beneficial as we're going
2:33to see. So, I'm going to structure this
2:35in a different way.
2:36I'm going to try to increase usage by
2:39increasing perceived value or by
2:43reducing hassle or friction.
2:46So, these are my two buckets. Now, one
2:49thing that I didn't explore here is a
2:52third bucket that could be
2:55how to put these bikes in places that
2:59make more sense. So, maybe a few
3:00stations are not being used at all or
3:04are not are being are not being used a
3:07lot.
3:08And honestly, I already built this case,
3:12so I kind of missed that bucket. And I'm
3:15just thinking of it now as I speak.
3:18Uh but, let's move on with these two
3:21buckets because these are the two that I
3:23thought of as I thought of this case.
3:26Just There's a third bucket, I guess,
3:28and I guess I didn't uh fully think of
3:32it. But, let's see how I do with these
3:34two buckets. So, to increase perceived
3:36value, we can increase actual value or
3:40we can improve perception. To increase
3:43actual value, we can improve the
3:44bicycles, either the equipment or the
3:46maintenance. So, we can change these
3:48bicycles to better bicycles uh with more
3:52gears, more comfortable ones, faster
3:55ones, or do more maintenance more
3:57frequently, or do better maintenance.
3:59Maybe no one's using them because
4:01they're broken down all the time or
4:02because they don't trust the brakes
4:04braking systems.
4:06Now, another way to increase actual
4:09value is to have better or more parking
4:12stations. By having better parking
4:14stations, I mean parking stations in
4:17places that are better lit, or they're
4:20more convenient, or
4:22maybe just aesthetics. Maybe they just
4:25look better and people use them more. Or
4:27we have more parking stations, so they
4:29are always closer to the origin and the
4:32destination of these people.
4:35And also, a third way to do it is to
4:37have better or more roads or lanes. So,
4:40of course, these people who are riding
4:42bikes, they have to ride them somewhere.
4:44They could ride on the streets, but much
4:47better to ride them all on biking roads
4:50or biking lanes. And maybe these are not
4:54very good. Maybe they have holes in it,
4:56so they could be improved or they're not
4:58very well signaled, or they're not well
5:01separated from car traffic, or maybe
5:04there's just not enough of them. And you
5:06can't get many places using this system.
5:09You have to use the regular streets, and
5:12most people won't feel comfortable doing
5:13that. Or to increase perceived value, we
5:16can also improve perception.
5:18And we can advertise the benefits of
5:21using bikes, maybe the health benefits,
5:23or maybe it's faster to move through the
5:26city using bikes, or
5:29maybe it's cheaper to use these bikes
5:31than to use your own bikes.
5:34Or we can improve the PR. So, maybe the
5:36media is not talking well about the
5:38system, and we can talk to them and show
5:40them the benefits so that the media
5:43talks good things about the system and
5:45shows the population how to use it and
5:50you know, maybe you have celebrities
5:51using it and
5:54I don't know.
5:55Posting on Instagram, things like that.
5:57But these are ways to improve perception
5:59without increasing actual value, which
6:02also works to improve perceived value.
6:06Now, the second bucket is to reduce
6:09friction. And there's three sources of
6:11friction in my opinion. The first one is
6:13sign up friction, so you have to sign up
6:15for the service in some way.
6:17Or maybe you don't have to sign up for
6:19the service, in which case there's no
6:21sign up friction.
6:22Second one is the bike pick up
6:25interfaces. So, there are some friction
6:28to pick up the bike. So, from the moment
6:30you say, "I want to get a bike." to the
6:32moment you get the bike, there might be
6:34some friction and we can take that off.
6:37And the third one is the walking
6:38distances.
6:40So, from where I am right now to where
6:44the bike is, how far is it?
6:46And this could be a driving distance or
6:49riding the bus distance as well, but
6:51probably walking distance.
6:54So, let's start with signing up
6:56friction. There's three of them. The
6:57first one is is it online or offline?
7:00So, the way I imagine it is
7:03you have an app that you download and
7:05you sign up. But because it's a public
7:08service, I can't imagine that maybe you
7:09have to go somewhere and fill out some
7:12forms. Uh I don't know. I don't know how
7:15it is. So, if it's online, there's less
7:17friction. The second one is
7:20what are the sign up steps? So, maybe
7:22it's online, but you have to do all
7:24these things and
7:26you know, fill out all these forms
7:29and put your
7:31tax information, your citizen
7:33information. I don't know. The less
7:35steps, the better. And the simpler the
7:38steps, the better.
7:39And finally, what are the sign up
7:41problems that happen when people try to
7:43sign up? We don't want a lot of
7:46problems. We want as few as possible. If
7:49possible, no
7:50no problems
7:51because people who find these problems
7:54probably don't become users.
7:56Now, once people have signed up, they
7:58need to pick up the bikes.
8:00One way to to to make this better is to
8:03simplify the bike pick up process. So,
8:06I don't know exactly how the process is,
8:08but I imagine the bike in the station
8:10and it's locked up somehow and you have
8:12to do a series of steps
8:15to get the bike and then to deliver it.
8:17And the more we simplify this, the
8:19better. Another way to improve the bike
8:21pick up interfaces is to reduce the
8:23stuff needed. So, I'm guessing that when
8:26you get to a bike station, you need
8:28something to prove that you're a user or
8:32that you're paying. So, maybe a
8:34smartphone app, maybe some cards, maybe
8:38your citizen ID.
8:40And perhaps you can reduce that or
8:43optionally reduce that with
8:45fingerprints.
8:47Or
8:48I don't know. The less stuff we need,
8:51the more
8:52easily the citizens can
8:55pick up these bikes. And the third one
8:57is to reduce errors. So, maybe when
9:01people go get the bikes, there errors
9:04that prevent them from picking up the
9:06bikes.
9:08And this not only
9:11makes them not pick the bike in that
9:13okay that one occasion, but also it
9:16makes them not trust the system. So,
9:18they'll figure out some other way to
9:20move around. But if the system's error
9:23free, then people can really trust it
9:25and use it whenever they want.
9:28And the third one is to reduce walking
9:31distances. And here it's similar to the
9:34increasing value thing with more
9:36stations.
9:38By having more parking stations, you
9:40reduce the walking distances.
9:43And this not only increases value, but
9:46also reduces the friction. So, maybe
9:49some people are lazy to walk too far to
9:52get
9:53a bike. And if you have a bike, you
9:55know, a block away from home, why not
9:58use it? But then there's also a question
10:01of putting stations in strategic
10:03locations. So, what I mean by this is I
10:08don't know if we have stations near
10:12subway or metro exits or near
10:15important bus lines
10:17or near important places in the city,
10:20but if we don't
10:22we need to have them there because those
10:24are the places where most people need
10:27transport. Now, in the beginning of the
10:29case, I mentioned that there is a third
10:31bucket, which I hadn't thought of when I
10:33was building these slides.
10:35Uh which is the having the bicycles well
10:40distributed because one way to increase
10:42utilization rates is to have more people
10:46using these bikes. So, increasing
10:48perceived value, reducing friction, but
10:51also another way is to having the bikes
10:54better distributed because if there's
10:57some bikes in some place of town that no
10:59one's using them
11:01then it doesn't make sense. If I were to
11:03explore that bucket, and I I am
11:05exploring it now, there's two things
11:07within it. The first one is
11:09closing down unused stations. Unless we
11:12can boost the usage of these stations,
11:15we need to close them down because these
11:17are just bikes that are not being used
11:19anyway. And the second one is
11:23uh to
11:25I'm guessing that some routes are more
11:29used in sometimes of the day. So, for
11:31example, if there's a residential area
11:33and a commercial area, then there's
11:35bikes moving from the residential area
11:37to the commercial area in the morning
11:39and from the commercial area to the
11:41residential area on the afternoon.
11:43So, maybe we have we can have some
11:46vehicles that take the bikes
11:49from the commercial area to the
11:50residential area in the morning, so
11:52people can use it more and then so they
11:55basically rearrange the bikes to where
11:57the demand is during a certain time of
12:00the day. Uh I've seen that happening in
12:03some cities and this is one way to
12:05distribute the bikes better. Now, I
12:07don't know if it makes sense to do that
12:09because maybe having the truck doing
12:12that is more expensive from a fixed cost
12:16uh standpoint than having uh
12:20more bikes and we need to do a
12:22cost-benefit analysis to do that.
12:26Now, a couple of things that I want to
12:28talk about to debrief this brainstorming
12:30question. Well, one of them is
12:32unexpected, which is what if I forget
12:35something while I'm brainstorming? In
12:37this case, honestly, it was
12:39unintentional. I forgot a whole bucket
12:42of redistributing
12:44these bikes to the places with high
12:46demand and taking them out with places
12:48of low demand.
12:50And what do you do in a brainstorming
12:52question if you forget a whole bucket?
12:55In this case, I could have just remade
12:58the slides and pretended that I didn't
13:00forget it, but I prefer to do it more
13:03naturally and to show you that I'm
13:05human, too. I make mistakes and you can,
13:08too, in your case interviews and there's
13:10no problem with that. So, how do you
13:13recover from a mistake? If you forget a
13:15whole category
13:17and you notice it throughout the case as
13:21you're answering to What should you do?
13:23Well, pretty simple. Whenever you figure
13:25out that you've forgotten a whole
13:26bucket, you tell the interviewer, "As I
13:28did tell you, well, I just noticed that
13:30I forgot a whole bucket here, which is
13:32this, and I'll go back to that in the
13:34end."
13:35And then, you explain the interviewer
13:38everything you thought, and then at the
13:39end, you go back to that bucket you
13:41forgot, and you try to give ideas to it.
13:44By accident, I forgot
13:47uh a whole category here of
13:49redistributing the bikes, so doing
13:52things in the supply side, not just in
13:54the demand side of the equation, as
13:56these two buckets, perceived value and
13:58friction, do. They're on the demand
14:00side, and on the supply side, you can
14:01redistribute the bikes. I I noticed it
14:04by accident, but I take it as an
14:06opportunity to show you what to do
14:09when you notice it, and how to recover
14:11in a real interview. Just do what I did.
14:14I noticed it, I told you that I noticed
14:16it, and then at the end, I came back to
14:18it, and I uh mentioned a couple ideas.
14:22Okay? So, you can do the same to your
14:24interviewer. It's fine. They forget
14:26stuff, too, when they're working in
14:28their projects. The only thing is, when
14:31they notice they forgot, or when someone
14:33noticed they forgot, they tell the
14:35person, "Oh, sorry, I forgot it." And
14:37they come back to it, and just develop
14:40it, and bring ideas to it, and develop
14:43some insight. Okay? And the other things
14:47that I was going to talk about, which
14:48were more planned, are how did I
14:50structure this? So, let's go through the
14:53structure. One way to structure
14:55brainstormings, or if you're if you're
14:57not really good at structuring, you
14:58should use the five ways to be MECE. So,
15:01for each layer, use one of the ways to
15:04be MECE. Okay? So,
15:07for example, here,
15:10how to increase perceived value and
15:12hassle friction.
15:14This is a simple conceptual framework
15:16that I've learned in the past, and that
15:19I'm using here. Now, I don't talk about
15:22this one in the five ways to be MECE,
15:24but it's one that I've learned. If
15:26you're not using a product or service,
15:29one way to think about it is is it
15:31offering enough value? Yes or no? If
15:33not, then that's why I'm not using it.
15:36And if it is offering enough value, then
15:39it's probably due to friction.
15:42So,
15:43this is a small conceptual framework.
15:45You can use one of the
15:47other ways to be MECE, too, to do this.
15:50In this layer, actual value and
15:53perception, I use the technique that I
15:55actually don't mention in the article or
15:57the videos on the five ways to be MECE,
16:00but it's basically a semantic breakdown.
16:02So, perceived value is perception plus
16:06actual value. And you can use this to
16:08structure a lot of cases, and it's
16:11actually a really flexible technique.
16:14So, those of you who've gone to business
16:16school or who know a lot of business
16:18concepts, you've probably heard about a
16:20sustainable competitive advantage. And
16:24if your interviewer asks you, well,
16:26what could be sustainable competitive
16:28advantages of for this company? I've
16:30never heard this question before, but
16:31they could. Uh you could break it down
16:34into what could be competitive
16:36advantages, and which of these could be
16:38sustainable? So, another semantic
16:40breakdown, just to give an example. And
16:42then,
16:43uh the
16:45hassle friction, I broke down using a
16:48process type of structure. So, sign-up
16:51friction,
16:53after sign-up, you walk
16:56to the stations. And then after you
16:59walk, you have to pick up the bike, and
17:01you use some interfaces to that. So,
17:03it's out of order here, but it is a
17:06process type of structure. So, this is
17:09how you can use the five ways to be MECE
17:11or some structuring techniques that even
17:13go beyond the five ways to be MECE to
17:15structure a brainstorming question in a
17:18MECE way. And of course, I over relied
17:23in a conceptual framework that I knew of
17:25value and friction, and I forgot to look
17:27at the supply side of the equation,
17:29which is the
17:31uh bike redistribution
17:33uh part. So, I could have thought of
17:36demand and supply first, and then use
17:39this framework. So, I just looked at
17:41demand, and that's where the mistake
17:42came from. I over relied on the
17:45conceptual framework that I learned. So,
17:47don't do the same mistake. Uh I didn't
17:49practice what I preach in this case, and
17:53I hope you don't
17:55do the same mistake in your interviews
17:57as well. Okay? So, I hope this was good.
17:59I hope this was a
18:00uh fun and useful learning experience
18:03for you, and I'll see you in the next
18:04video.

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