1) Go over requirements and write down broad categories of tasks
For e.g, if you're designing Twitter, you'd need
1) Display Tweets
2) Display a timeline
3) Build a social graph
4) Build a search index
2) Give an approximate server architecture that includes web servers, caching servers and db servers
3) Describe the data model you'd come up with for the db(users, tweets etc)
4) Describe the cache, what it would store, eviction policy etc.
5) Scalability and security, describe master/slave dbs, shards, etc.
