You can get the number right and still lose. Of the nine things the coach says he is watching, not one of them is whether the answer was correct.
Ready for a case?
Ready.
Our client is a quick-service restaurant, best known for footlong subs. They are weighing whether to break into the breakfast market, and they have brought our team in to work out whether the investment is worth making. I would like you to help us think it through.
Sounds good. I have always wondered why none of the sandwich-led chains have gone after breakfast, so the question makes sense to me.
Before I get into the details, can I ask what their primary goal is here? Is this about driving incremental revenue, or are there side concerns like fending off a competitive threat?
Good question. The key goal is a 10 percent increase in revenue.
On competition, none of their direct competitors, meaning the sandwich-led chains, serve breakfast today. There are of course other quick-service players in the wider category that do.
Understood. And when they launch, are they rolling out globally right away, or focusing on one market such as the US?
They want to focus on the US for now. If it proves out they would look wider, but for this exercise let us stay in the US.
Great. I have more questions, but would it be alright if I took a moment to gather my thoughts first?
Go ahead.
The two questions themselves are ordinary: goal and scope. The okay candidate asked the same two. What differed was the order. Asking about the goal first meant this candidate held the 10 percent target before asking anything else.
The opening remark is not small talk either. Someone who wonders why competitors stayed out is someone who will press on operating constraints later.
This is an interesting one. The key question, as I see it, is whether this client can drive 10 percent incremental revenue by breaking into breakfast. To get there I would like to look at four things.
First, the size of the US breakfast market. That is the market we care about, and I want to understand how robust it is and how attractive the opportunity looks.
Second, operational considerations. If they are doing breakfast for the first time they will have to open stores earlier, source new raw materials and create new menu items. There is a lot there I would like to dig into.
Third, marketing. The quick-service space is famously competitive and full of established brands, so I want a sense of what kind of campaign it would take to establish themselves and what that would cost.
Fourth, tying it together, the financials. Can they drive an incremental 10 percent, and just as importantly can they do it profitably so it actually adds to the bottom line.
That sounds good.
All three candidates named similar branches: market size, operations, marketing, financials. What only this answer did was attach a reason to each one. That is the right-hand column of the board above.
The board in Act 4 has the same shape as this one. The thing to answer sits on the left and gets split finer to the right. The only difference is whether an operator hangs on the join: in the multiplication tree the right-hand cells produce the left-hand value, and in the issue tree they answer the left-hand question.
I would like to start with market sizing. Before I dive in, has the client done any preliminary research on American breakfast habits, and if so could you share what they found?
They have done some initial work, and part of why they hired us is to take it further. What they found is that 25 percent of Americans eat breakfast daily, and of that group only 30 percent eat at home.
Interesting. Two quick follow-ups.
First, what is going on with the other 75 percent? Second, if 30 percent of those daily eaters eat at home, do we know where the remaining 70 percent eat?
On the first, let us set aside the 75 percent who do not eat breakfast daily, just to keep the math simple.
On the second, 50 percent of that group pick up breakfast on their way to work, and 10 percent bring something from home and eat it on the way.
Got it. And since the ultimate goal is a 10 percent bump in annual revenue, one thing on my mind is whether these numbers are shifting. Has the client looked at whether there are trends running one way or the other?
We do not have anything on that right now. I am curious what you think, though.
I think it matters. What jumps out is that Americans work a lot, especially relative to other wealthy countries, and if anything that trend seems to be accelerating.
So if 30 percent eat breakfast at home today, I would expect that to fall to something like 20 percent in five years.
That seems like a fair assumption.
One last thing before I start. Has the client done any competitive research on what other quick-service players are doing at breakfast, Quiznos or McDonald’s for example?
Some early work. Their internal estimate is that McDonald’s gets about 18 percent of overall revenue from breakfast items.
They also looked at whether their own customers are unusual in their breakfast habits, and you can assume they behave the way other Americans do.
Great. I think I have what I need to run an estimate.
One more thing that would help is any estimate of the client’s annual revenue, because that tells me what share of the market they would need to capture to hit the 10 percent goal. I will get started on the sizing now.
Three things happen in this act. The candidate says how many questions are coming before asking them, ties the question about shifting numbers directly to the five-year clock of the case, and then asks for one more thing after saying the information is sufficient, giving the reason.
The okay candidate asked the same question about whether the numbers were stable. What was missing was why it was being asked. From the interviewer’s side, curiosity and need look the same.
I will use the data the team has already collected and make a few assumptions along the way.
First assumption: 300 million people in the US. I know that is on the low side, but it keeps the math simple as we go.
Second, the share who eat breakfast is 25 percent, from the client study. But since the segment we care about is people buying food out, I will assume roughly 20 percent of them do not get to vote with their wallet because they are too young. I will take out everyone under 18 and call that 20 percent.
Third, something I want to flag. The time frame the client cares about is five years, and we talked about these behaviors shifting. If 30 percent eat at home today and that goes to 20 percent, I will assume those 10 points still eat breakfast but get reallocated.
I will put half of it, 5 points, into bringing something from home, and the other 5 points into buying on the way to work. That takes the segment we care about from 50 percent to 55 percent.
That makes sense.
One last thing. The health trend is big in the US. Consumers care about it much more, and it is going to be a real issue for our client.
So of the people buying food on the way to work, I will assume a big chunk will not even consider a quick-service option like ours. I will say 40 percent would consider it. I know that is a big haircut, but I would rather err conservative, and it also means there is upside for the client if they find ways to offer healthier options.
That sounds reasonable.
Let me run the numbers. 300 million Americans, 25 percent of them breakfast eaters, gives 75 million. Take out 20 percent for the under-18s and we are at 60 million.
Of those, 55 percent buy something on the way to work, so 33 million. Then 40 percent of those would consider a client like ours, which is 13.2 million. That is an awkward number, so I will round it down to 13 million.
I am with you.
The last piece is price. Based on walking into a Starbucks and buying an egg sandwich and a coffee, six dollars feels like a fair estimate. Six dollars times 13 million is 78 million, and that is a daily number.
If it is alright with you I will scale to annual, and I will use a round number of days in a year. That overestimates a little, but it should counterbalance the big haircut I took on the health trend. I will round 78 million up to 80 million and use 400 days.
So the annual expected market for breakfast in this category in the US would be 32 billion dollars.
Every assumption is stated up front, before a single multiplication. Then each step is voiced while it happens. That is what lets the interviewer interrupt: a bad assumption gets caught before it is multiplied through.
There are two roundings and the direction is given for both. 13.2 million goes down to 13 million, 78 million goes up to 80 million. The candidate says out loud that the rounding up overstates and that it offsets the large health haircut.
Does that feel like it is in the right ballpark to you?
I have heard the overall US quick-service market is around 200 billion a year. At 32 billion we are a little over 15 percent of that, so it does feel like the right ballpark.
The other thing worth saying is that this is a sizable market. Even a small share of it would bode well for their internal target of 10 percent incremental revenue.
That is great. Let us move on.
The number is produced and then not left alone. It gets checked against something large, and then carried back to the 10 percent goal collected in Act 1.
The okay candidate reached 36 billion, mentioned the size of the overall market, and stopped there. No return to the goal. The coach names this as the single biggest gap between an okay answer and a great one.
Lines, assumptions and traps worth reusing
| Assumption | Value | Source |
|---|---|---|
| US population | 300M | Candidate. Deliberately low to keep the math simple |
| Eat breakfast daily | 25% | Client study |
| Age 18 and over | 80% | Candidate. Keeps only those who pay for themselves |
| Buy on commute | 55% | Candidate added 5 points to the 50% given |
| Health haircut | 40% | Candidate. Conservative, and said so |
| Ticket | $6 | Candidate. Personal experience |
| Days a year | 400 | Candidate. A round number for speed |
300M × 25% × 80% × 55% × 40% = 13.2M → 13M × $6 = $78M/day → $80M × 400 days = $32B a year
The prompt carries no numbers at all. The 10 percent target and the 25 percent breakfast figure both have to be asked for. Skip the goal and you can produce 32 billion with nothing to judge it against.
Miss the five-year window and you cannot use the 55 percent. Sizing on 50 percent is not wrong arithmetic, but once the client says five years, sizing today’s market answers a different question than the one asked.
Round without naming the direction and the interviewer cannot check the work. That is where the weak answer lost the room, with correct arithmetic.
The Act 4 exchange. Answer first, assumptions dragged out afterwards
29 billion a year.
How did you get there?
300 million people, 25 percent breakfast eaters, 50 percent buying on the way to work, a 40 percent health haircut, and six dollars a meal.
On those assumptions I get 90 million a day, or 36 billion a year. Where does 29 billion come from?
I took out 20 percent for people under 18.
The 36 billion is right. 300 million times 25, 50 and 40 percent gives 15 million people, times six dollars is 90 million a day, times 400 days is 36 billion. But add the under-18 cut that surfaced late and it becomes 12 million people, 72 million a day, 28.8 billion a year, which matches the 29 billion stated at the start.
The arithmetic was never wrong. The problem is that the answer arrived without its assumptions, so the interviewer had to ask twice. You can be right and still lose the room: an answer nobody can check does not get counted as correct.
What the coach said he was looking for, across all three parts
| Stage | What the coach watched | Weak | Okay | Great |
|---|---|---|---|---|
| Opening | Energy and interest | × | △ | ○ |
| Opening | Quality and order of questions | × | △ | ○ |
| Opening | Structure and delivery | × | △ | ○ |
| Probing | Driving rather than waiting | × | △ | ○ |
| Probing | Giving context for each question | × | △ | ○ |
| Probing | Tying questions to the five-year clock | × | × | ○ |
| Math | Stating assumptions | × | △ | ○ |
| Math | Voicing the thinking | × | △ | ○ |
| Math | Carrying the insight forward | × | × | ○ |
Not one of the nine asks whether the answer was right. The coach says twice that being directionally correct and passing a smell check is enough. The three answers land between 28.8 and 36 billion against a 200 billion quick-service market, so every one of them is somewhere between 14 and 18 percent of it. Arguing decimals inside a range that a single assumption moves is not worth the time.
The okay answer takes a cross in exactly two places, and both are the same thing: what is in hand never got carried back to the question being asked.
The coach calls the gap between okay and great minor, and it is, because the questions asked and the branches built are nearly identical. Put the three parts side by side and that minor gap sits in the same place every time. Did you say what the question you are asking is for, and did you say what the number you produced is for?
So the thing to practise is not a list of questions or the name of a framework. It is the habit of stating, for every move you make, which part of the key question it serves.