Want to see how OC&C Strategy Consultants conducts case interviews? Today is your lucky day. We brought on Partner Stephen Carolin to demonstrate the firm’s interview process.

We’d like to thank Eric, our courageous candidate, for coming on the hot seat – in front of a live audience, no less.

Catch the recording of the session below where Stephen starts off with a quick chat about Eric’s resume before diving into a non-traditional case study.

In addition, OC&C is hiring across a number of roles and levels – see current openings and apply here.

Transcription:

OC&C: Stephen Carolin 

So in terms of the structure of the next 25 minutes, just to give you a sense of what to expect, I’ll start with a few questions on you, your resume and the experience you’ve had to date. We’ll spend most of the time running through a case study. And then always at the end of interviews, we leave time to answer questions that candidates have. So to answer any questions you have and also from the people who are tuned in watching us.

Eric Lu 

That sounds great.

OC&C: Stephen Carolin 

Perfect. Well, thank you very much for for sharing your resume in advance. As I was looking through it, tons of really interesting experience. The question I always like to ask people is if you had to pick one thing from your resume, and actually, it could be something that isn’t on there at all, that you think is a great example of what motivates you, what drives you, what you’re passionate about, what would you talk about and why?

Eric Lu 

Yeah, I mean, honestly, probably after today, I would say this would be something I’d say to answer your question. But I can’t really talk about that right now. But something on my resume, I would probably say would be my VC experience this past semester. So as a bio major, I really haven’t had any exposure into the business or finance world. However, I was really interested, and what drove me really to pursue sort of this business or finance experience was doing this VC experience. And I think that’s really what motivates me, and was a great experience for me, but also showed me sort of a new world into the business side of things.

OC&C: Stephen Carolin 

Interesting. So given that focus of your major, taking that into more of a commercial context, what was it about that that surprised you most in terms of where you found interest, what piqued your intellectual curiosity?

Eric Lu 

I actually found that with consulting, for example, and biology, it’s really much of the same thing. You’re really just trying to break down a problem to its simplest parts. Like, for example, at a lab, you’re gonna be breaking down this lab experiment to different parts. Same thing with any case or any project you’re on. So it’s really the form of thinking the same thing. And then something like more is just like, I feel like in consulting, you can make a more direct, large scale impact right away. Whereas potentially, if you want to go into medicine, it takes lots of years before you can get something accomplished, or before you get certified as a physician. Whereas with consulting, you can really just go in right away and make a direct impact.

OC&C: Stephen Carolin 

Interesting. Yeah, I think your description of taking enjoyment in breaking down difficult problems, certainly really resonates. It’s one of the parts of the job I really enjoy. That’s probably a good segue actually into the case study itself, where we will we will spend time breaking down and wrestling with a difficult problem together over the next 25 minutes. So as I said in my introduction, I’m a partner in our technology and media practice. I focus more on the technology side, but the case we’re going to run through today is close to some of the work that our media team does at OC&C, specifically in the online classified space.

And the case study we’re going to run through relates to the online dating market in the US. And the reason I describe that as a kind of online classifieds market is if you think of an online dating platform at its heart is somewhere where a user is posting an ad for a specific thing, I guess in this case themselves. The way those businesses kind of work and make money, very similar to platforms where people might be posting an advert for, and maybe it’s a job, or a particular property, or car. And what one of the first challenges when working in that type of market actually probably holds true for pretty much any market that we can sell to, is getting the segmentation right.

How can you take a large, complex market and break it down into more digestible chunks to make sense of things. So before we dive into the body of the case, I’d like to spend a few minutes brainstorming around potential ways you might think about segmenting the online dating market. And really through two lendses. How might you think about segmenting the universe of users of online dating services, in terms of the different ways they behave within the market? And how might you think about segmenting the providers? So the apps and the websites that operate in this market?

Eric Lu 

Yeah. I think, so first, in terms of the users, there’s a couple of ways I think of right off the top of what I can do to segment them. Number one is with age. Rarely people find matches very far apart in age. So I think age is a very general segmentation that we can go with. Number two, though, I can find is location. It’s harder to find people that match that will work out if you guys are far away. Long distance, in my personal opinion, rarely works for a lot of people.

And then finally, where you are in life. Are you trying for something more casual, something more serious? Or are you really just trying to meet people. You know, I think those are all very different stages of life. And it’s really important for this dating app service to fulfill all these requirements. And then in terms of the app services, could you repeat the second part of the question again, just to make sure I’m answering correctly?

OC&C: Stephen Carolin 

Yeah, absolutely. So if you were thinking about ways of segmenting or grouping the businesses operating in this space, so some of the apps or websites offering online dating services, what might be different ways you might think of grouping those based on common characters?

Eric Lu 

Yeah, I feel like that’s a little bit tougher. Because you have Tinder and Bumble, and they’re all very similar to each other, where you put in your personal bio, and then you just match people. However, I would say, the way to group it could be from more of a national standpoint, such as the Tinders and the Bumbles that are very national, to more regional where maybe, I’m from North Carolina, maybe there’s these apps just for North Carolina people. I think that could be one way. Another way we could find is for profit and nonprofi. There might be some apps that are like if you’re really serious about this, then you have to pay to get the app versus like an everyday person can just download Tinder for free. So I think that’s another way to sort of segment the apps.

OC&C: Stephen Carolin 

Absolutely. I think those are all really good dimensions. To now oversimplify hugely, for the purposes of a short case study, I’m going to pick up on one thing you mentioned there and combine another. And  I’ve drawn something on this page. I hope you and everyone watching will be able to see this. I think deciphering partner handwriting is an important skill in consulting. At a high level, let’s think of this market as breaking down across a couple of axes.

So the first one I’ve identified as he speaks to a couple of the dimension you mentioned. So on the one hand, we have what I’ve called mass market businesses. So those are apps or websites targeting any and every potential user in this space. So think eHarmony, Tinder, Bumble. And then on the other hand, would I’ve called specific segment sites. And those are applications that are deliberately targeting a certain subset of users in the market. So that might be based on age that you mentioned.

So Silversingles, for example, a dating site for people over 50. It might be religious beliefs, ChristianMingle. It might be where you went to school, The League. It might be your job, Farmersonly.com. Uniform dating. But sites targeting a certain subset of users. And then on the other dimension, I picked up on the distinction that you mentioned right at the end between sites that are called free, and those are free to the user. So they’re making their money by showing me as a user adverts. And then on the other hand, paid sites. And there are lots of different payment models that exist within this market. But for simplicity, let’s assume this means kind of paid subscription.

So I pay per month to participate. So if this is a high level way of thinking through how this market segment, there’s a couple of questions, I’d like to think through now about how you would expect the market dynamics to vary across these four quadrants, and why. And again, two parts to this question. The first, how would you expect the number of providers operating in this market to vary across the quadrant? Just in relative terms. Where would you expect to find the highest three to the lowest number of providers? And secondly, how would you expect average size of provider where we can think of size in terms of number of users to vary across the four segment and why?

Eric Lu 

So just to clarify a little bit, number one, you’re asking for the number of providers, right, is that correct?

OC&C: Stephen Carolin 

Yeah, exactly. Just in relative terms, where would you expect to find the most users.

Eric Lu 

And then number two, it’s more like the number of users they have?

OC&C: Stephen Carolin 

Exactly, yeah. If it’s helpful to spend the moment to kind of, you know, think through the space, please do and then yeah, come back and chat with me.

Eric Lu 

Yeah. Can I take just a couple of moments?

OC&C: Stephen Carolin 

100% yeah.

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Eric Lu 

Okay, so I’ll first approach the first question, really, the number of the number of providers, I think by far the greatest number of providers that we prevalent is the free mass market. Because I think, just in general, the preface, I think mass market will have more providers than the specific segments, just because it’s mass market, they’re not really targeting a specific niche, giving way to more available market entry for these different providers.

And then in terms of the paid and the free, I feel like for those that you know, require payment, the technology might be more advanced, therefore, there might be less number of users. So that’s why I would put free mass market as the most number of providers. And the least number of providers would be sort of on the opposite end of the spectrum, specific segments that are paid. Because number one, it’s a specific niche. And number two, you have to pay for it.

So makes me think that you know, the technology is more advanced and more specific even. And then for the second part of your question where you’re asking for the number of users, personally, if I was a user here, I would go for something that’s free. So I think the free market would always have more than a paid market just in general. So I think the free mass market would still have the most just because it’s a mass market, attracts everyone’s appeals.

And the number two would probably be the free specific segment. Just because even though these are pretty specific, still free, and just the everyday person likes to have free stuff over something they have to pay for. And then number three here in terms of the number of users, I would do paid mass market because it’s still mass market, and then the least number of I think users would be the paid, specific segment.

OC&C: Stephen Carolin 

Interesting. And just to see, just to double click on a couple of things that you mentioned there. So I think as you rightly said, you find more users in the free that than in the paid segment. And that is true for both mass market and segment specific. Would you expect the ratio between the number of users in free and pay to look different across the two sides of the map? Would you expect the balance to be closer in either segments specifically mass market or see a big difference in one side of the page?

Eric Lu 

Could you sort of clarify a little bit?

OC&C: Stephen Carolin 

Yeah, sure. So in both mass market and segment specific there are more users in free than in paid. But would you expect relatively speaking, the gap between free and paid to be bigger in one of mass market or segments specific? i.e. is there more of a weight in free in one of them?

Eric Lu 

Okay, I see. I think the gap is probably bigger, as in more people, like if I’m going to pay for something, I’m probably going to pay for something that’s specific for my own needs. So as a result, I think the gap is definitely going to be bigger between the specific segments, than between the mass market. Whereas I don’t think that many people, if they’re gonna pay for something, they won’t pay for something that’s just not specific towards them.

OC&C: Stephen Carolin 

I think that’s right, yeah. And actually, they’re in parts of the specific segment parts of this market, actually, the needing to pay to be a member can be seen as an advantage almost, and guarantees exclusivity if you like. So picking up on a second thing you mentioned. So free mass market, you’re right, there are a lot of users in that segment, actually. But by far the biggest, as you say, for the kind of casual market participant. That’s where most of them sit. And barriers to entry in terms of starting up an app, something like that, are quite low. So you do find quite a lot of sites. However, when you look at the competitive landscape in that segment, as well as all those small sites, you see, there are a few players with really high market share that are just very big sites. They’re kind of, you know, brand names that we all know. Why is that that you find some players with big market share, given those dynamics you described with there being lots of sites kind of following where the users are. So you’re asking sort of why there are these big, like, how do these sites get market share? Yeah. Why do you see that concentration in that segment? Can I just take a few moments?  Yeah, of course. Yeah.

Eric Lu 

So I, I see, like, the reason why these sort of big players are big players as three main reasons. Number one, I think just because of the size of the company, they probably have more funding, they have more money to spend on advertisement, and raising awareness on just getting users to use them. Number two, I see brand loyalty. If people are already using, for example, Tinder, they’re not gonna, unless something really crazy happens, they’re not going to switch away from Tinder. So people, once they usually find something that works, they stick with it. And number three, this I think, is probably the least likely reason but I’m still gonna bring it up. I think potentially, there could have been like mergers and acquisitions, where they swallowed up smaller companies that increased their market share as well.

OC&C: Stephen Carolin 

Interesting. I think the first factor that you highlight there around the benefits of scale and network effects in this market is really important. So as you say, an example of that would be I have the scale to market to new users, just the fact of my being bigger and having a big installed user base, in some ways makes me more attractive to the next user who actually size of install base as an important criteria. So given those dynamics that we’ve talked about, that creates a bit of an advantage for the largest players in that segment, do you think your initial conclusion that that’s where you’d find the kind of highest number of businesses in this market is the right one?

Eric Lu 

After going through this analysis, I would actually want to revise my hypothesis. Where initially I thought the free mass market just because the size of the market would have the greatest number of these apps. I don’t think so anymore. I think maybe it’s better to target something that’s niche, since there won’t be as big of a player in the market. And allow easier barrier for entry where a startup app can just really enter and target the specific customers they want without having to worry about the lack of funding they have versus a bigger player, as well as the already built in place brand loyalty.

OC&C: Stephen Carolin 

Absolutely. Yeah, I think that’s exactly right. Cool. So as you mentioned, when navigating around that map, the free mass market segment has a really high share of users. So consequently, we think about market size, revenue kind of generates from adverts, things like that is very important. But if we put that to one side, and just focus on the paid part of this market, for simplicity, let’s assume it’s all monthly subscription. And we can ignore the mass market versus specific segment distinction. So just all paid online dating subscriptions. How much did people in the US spend on paid online dating subscriptions last year?

Eric Lu 

So could I take a few moments to brainstorm this?

OC&C: Stephen Carolin 

Yeah, absolutely. Why don’t you take a minute to kind of think through the structure. Perhaps we can talk through that. And then we can put some numbers against it.

Eric Lu 

Okay, sounds good. Okay, so I’m ready to sort of present my ideas. So I’m just gonna first assume that we have 300 million people in the US, if that’s okay. I’m going to first break this down between single people versus non single people, because I really hope that not single people are not on these dating apps.

OC&C: Stephen Carolin 

I think that’s a fair assumption, for a short case study at least.

Eric Lu 

So for single people, I’m just gonna assume half the US population is single and half isn’t. So that would bring this number down to 150 million, that are single. And then within the single population, not everyone is really eligible even to use this app or like to date in this app, because I don’t think for example, five year olds will be using this app or, for example, 80 year old will be using this app. The target range really is more like the 15 to 3 age really, that’s sort of my opinion.

So I would say only a third of the eligible single people are even eligible to use this app. So that would bring this down to 50 million. And then in terms of these 50 million, a lot of people even though they’re single, they’re not going to actively try and find a date, because that’s just that’s just not who they are. I would say the majority actually. So I would only say 20% of the people of this 50 million would actually actively try and download an app like this. So that would bring this down to 10 million. And then all this 10 million here, the question is who is willing to actually pay for this. And in my opinion, that would be even less.

Most people enjoy free stuff, like I said before, and I think only a 10th of the people would really want to pay for something like Tinder Gold or something like that. So I would say that really brings it down to 1 million people. And now I’m just making a little bit of assumption, more assumptions here. I assume if you’re for the paid, it’s $10 a month, and that would make $10 million of total subscription fees a month. Multiply that by 12. And it’s $120 million sort of annual US market in terms of paid subscriptions for dating apps.

OC&C: Stephen Carolin 

So if I was to say, I think that’s, yeah, I really like the clear assumptions and walking through it. So if I was to say that you’re number of people using an online dating kind of app is a little low. And that’s closer to kind of 30 to 40 million. But still, if we times your market size by three to four, it would be 50% too small. And you and your $10 per month is about right. So there’s there’s one other step to think through. What else might you think through in terms of sizing this market? So once you’ve got the number of users, you’ve got the kind of spend per site.

Eric Lu 

So just to clarify a little bit, my like, even if I multiply like $120 million by three to get like $360 million, I would still be 50% too small?

OC&C: Stephen Carolin 

Exactly. But the 30 million users would then be about right.

Eric Lu 

Okay, okay, so it’s I’m really just examining some of the back end of this tree here to see what. Let me – can I just take a moment?

OC&C: Stephen Carolin 

Yeah, of course.

Eric Lu 

Okay, so I feel like the logical reason here as to why it could be too small is I’m under estimating the number of people that’s willing to pay. I estimated that only 10% of the people are willing to pay maybe instead of 10%, it’s 20, 25%.

OC&C: Stephen Carolin 

Yeah, I think that’s one of the factors. You also see a dynamic where some people are paying for more than one site. So are they the average it lots of people are only paying for one. But the average number of apps that a user might be subscribing to is higher than one. But yeah, really sensible structure for a short case study. Let’s say you had two days, rather than four minutes, to size this market. Which of your steps would you want to revisit and dig into the next level of detail? And how would you think about kind of refining this approach with more time?

Eric Lu 

I think I would dig into more detail, sort of getting from what we revisited before, just the number of users that’s willing to pay. And as you said, if they’re getting multiple apps, I feel like the 30 million is a pretty set number, that’s actually pretty easy to get to. It’s just like, actually seeing if they’re willing to pay or not, it’s kind of harder to get to as well as just the number of apps they download.

OC&C: Stephen Carolin 

Nice. Yeah, makes sense. Fantastic. Well, that’s the end of the case. Yeah, really nice job, Eric. I think especially with the pressure of being not just me interviewing you, but lots of people watching, I think you did did a really nice job navigating through that. So as I say in a normal interview, I would turn it over to you to ask me some questions. But I think in the flow of this, I will just spend a few minutes kind of reflecting on the case, and giving you some feedback on what went well. Perhaps before I do that, it would be great to get any reflections you have from having run through things. Were there elements,  reflecting on your own performance kind of things at top of mind?

Eric Lu 

So number one, I have to say this case is really interesting. I actually, I’m not sure if you saw my resume, I started like a blind dating club.

OC&C: Stephen Carolin 

I saw that. I thought this would be a good fit for you.

Eric Lu 

And number two, I feel like it’s like, this case is like nothing I’ve done before. I’ve prepped for if you would say like the more traditional cases where you have frameworks and all that stuff, but this is just sort of you kind of jump in never know really when you start, and never know really when you end. I really enjoyed this because it flowed really well, where I first started with some like brainstorming, and I kind of use the brainstorm all the way until the end as well. So I really appreciate you for giving me this case. And yeah, thank you.

OC&C: Stephen Carolin 

Actually, I think your observation about not being one way you can apply frameworks is absolutely right. And most of our cases at OC&C are like that, and kind of deliberately like that. Really reflecting when our clients come to us with difficult strategic questions. we need to solve them with them from first principles. And of course, we bring in experience from work we’ve done, exactly the same way you can bring in preparation you’ve done to this setting, but fundamentally require their own approach.

And I think one of the things you did really well, and this is lots of candidates kind of try and take a framework and force it in, actually listening to each question and thinking through okay, what’s the right way to approach it. I think that’s always good practice in case study. In terms of thinking through the components of the case, and perhaps if I think through the step of kind of, okay, take the question, think through how to structure it, come up with some good ideas and discuss those with the interviewer. I thought you did a really nice job throughout of asking clarifying questions.

I guess this is a market that, I know you had an online dating business. So you know well, but that won’t always be the case with case studies. And I think it’s really important to make sure you’ve understood what the interviewer is asking for. And I think you did that really well, at all stages. I think that the second thing I would say is always good practice is taking the time to think through how you’re going to structure your approach. I should say I recognize that is particularly hard in this context. It probably feels like it’s silence for a lot of people. But I thought the times when you did that, say for example, before the market sizing.

And when you took the time to reflect on my question about why you’d see provide a concentration in the free mass market. You came back with really clear answers. So I encourage you to keep doing that. I think perhaps you could have done that, for example, in the segmentation piece if the case where you jumped into it a bit quicker and gave good answers. But I wonder if taking some time there would help. I think especially at the start of an interview, that’s the time when it’s hardest to do it. So I think keeping that in mind is really good practice. As we were kind of doing the problem solving together, I thought the ideas you came up with were commercially sensible and well structured.

I think what impressed me most in that part of the case was your openness to revisiting your thinking in providing new information. In the course of a project, we come up with initial hypotheses, and then we find facts that lead us to challenge and revise those constantly. And our case studies are almost always set up to see how you respond to that. So the example of where you’re going to find the most sites, you thought through that. I think your reasons for initially assuming there are lots of sites in free mass market was sensible, then we dug into that segment a bit more. And then you reflected and actually changed your logic and brought in some new points based on what we discussed. I thought that was really nice.

And that kind of intellectual flexibility and problem solving collaboratively with the interviewer is absolutely something we’re looking for. I think the one area on the problem solving where I think as you’re going into other cases, something to think about. So I think on the market sizing, your structure was clear, logical, and really easy for me to follow the thinking as an interviewer. And actually, for a short case study, there’s only so much detail you can go into. I think one technique that can allow you to do that even better, is to almost preempt my last question about where would you go deeper.

So you could say, Well, I think this is a market where, in an ideal world, I’d segment this into 10 year age groups and work out these things at this level. For the purposes of the short case study, I just assume it was, this is in the 15 to 35 age group, as exactly as you did. So the outcome might be the same, but I think that’s a good way to kind of show off, okay, here’s the nuance in my underlying thinking. And sometimes the interviewer might say, Okay, well, let’s go a little deeper down that route.

So I think on the market sizing, coaches do that. And one thing, one final tip on that, that I think can help is maybe even laying out that structure before you put any numbers to it. So saying, We’re going to start from US population, then go to single people then go to age. Does that sound okay? Is there any areas where we can go deeper, and maybe get the input from the interviewer at that stage. But yeah, as I say, given I hope these are helpful tips with future case studies. But I think you did a really nice job on this one. So, yeah, really well done.

Eric Lu 

Thank you. Yeah, I will definitely keep that in mind in the future. Just going like a little bit deeper on my answer.

OC&C: Stephen Carolin 

Yeah, I think one of the challenges in a case study is it’s such a short period of time to grapple with complex questions. So I think those tools for how can you acknowledge that complexity and nuance at the same time, then you can’t go to follow through on all of it is a balance to think about striking. Yeah, but great job. I really enjoyed the conversation and hearing your thoughts and running through it.

Eric Lu 

Yeah, thank you.

Conclusion

Thanks again to Stephen and OC&C for the fantastic demonstration. If you’re interested in a role at OC&C, you’ll find a link to view current openings and submit your application in this episode’s show notes. Thanks again for listening to Strategy Simplified. If you enjoyed it, make sure to leave a rating and review on Apple podcasts or Spotify. We’ll catch you again next week.

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