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Evals: How Do You Know Your AI Product is Working?

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AI evaluation questions are increasingly common in PM interviews at frontier AI labs and big tech companies. Interviewers want to see whether you can design a system that measures an AI product's usefulness, accuracy, safety, and reliability.

This lesson gives you a clear four-step approach you can use no matter what AI product you're asked to evaluate.

① Define Success
& Failure

② Choose evaluation approaches

③ Design eval system

④ Name Tradeoffs

We'll unpack each step using the same prompt so you can see how a complete evaluation strategy comes together.

"You're the PM for a new AI-powered resume screener at a mid-size recruiting company. The tool automatically filters candidates before a human recruiter ever sees them. How would you design an eval system for it?"

Step 1: Define success & failure

Before naming any metric, ground yourself in what the AI is being asked to do and what failure looks like. Ask yourself: What is the cost of a wrong output?

For a healthcare summarization agent, a wrong output might mean a doctor misses a diagnosis. For an ad ranking model, it means revenue leakage. For a resume screener, it might mean a qualified candidate gets filtered out, with potential fairness implications. The failure mode shapes the entire eval strategy.

Step 2: Choose evaluation approaches

Choose one or two evaluation approaches that can catch the failure mode you identified in Step 1. Four common approaches are:

Step 3: Design eval system

Move beyond a single metric and explain how the evaluation system will work across development, pre-production, and production. A complete system has three stages:

Step 4: Name tradeoffs

Every eval approach balances three things: speed, cost, and signal quality.

ApproachSpeedCostSignal quality
Automated checksHighLowHigh for objective tasks; low for open-ended outputs
BenchmarksHighLow after setupGood for regressions; weaker for product-specific behavior
Human evaluationLowHighHigh when reviewers and guidelines are well calibrated
LLM-as-a-judgeHighMediumMedium; should be calibrated against human labels

Signal quality depends on fit. An automated check can be the strongest signal for a verifiable task and the weakest for a subjective one. To learn more about these tradeoffs, check out our deep dive lesson.

Name the tradeoff that matters most for the product, what you're willing to give up, and why that choice fits the failure mode from Step 1.