Capital One Data Scientist Interview Experience — A Cloud Pricing Case with Break-Even Math

A minicase about a cloud service — not sure if it's a new one, I don't remember seeing it on the forum before.

The setup was a startup doing cloud services. We supposedly had our own advantage (I didn't quite catch what the advantage actually was, but personally I don't think it affected the rest of the questions much).

Q1: How would you structure the product offering? How would you generate profit?

Q2: The company decided to go with unit-based pricing. At this point the interviewer shared their screen with some data:

• Subscribers: 20 people
• Fixed cost: $400, Variable cost/user: $5
• Price per GB: $1
• Average GB/user: 15GB
• Question: find the monthly profit

Q3: Why are we operating at a loss?

Q4: If our user count doubled, would we break even?

Q5: How would you increase our market share?

Q6: Now there's a new pricing strategy: split users into free and paid (paid users are charged a fixed fee every month). The cost per user is $1 for free users and $5 for paid users, and the monthly fee charged is $54. Find what percentage of users need to be paid in order to break even.

Q7: Which strategy do you think is better? Why, and what are the risks?

I got Q6 wrong. The interviewer corrected me at the end, and then threw in an extra question based on my wrong answer — if the answer really were the wrong number I'd calculated, how many customers would be needed to break even?

Overall the experience was pretty good. I didn't know much about cloud services going in so I was a bit lost at first and asked several clarifying questions, but the interviewer was very patient.