Why do product companies downlevel candidates from service companies?
Because levels are assigned on demonstrated scope, and delivery-shaped answers make scope hard to see. When a candidate describes team activity rather than personal decisions, the interviewer has nothing to grade at the higher level and defaults down. The fix is not to argue for seniority but to describe ownership precisely: what you decided, what you rejected, and what changed as a result.
Should I accept a lower level to get into a product company?
Sometimes it is the right trade, but decide it deliberately rather than by default. A one-level drop with a large increase in scope can be worth taking. A one-level drop with the same scope and a verbal promise of a fast promotion usually is not, because your next employer will anchor on the title you accepted, not on the promise you were given.
How do I answer questions about team size and ownership honestly?
State the real scope and then be precise about your part in it. Saying you owned two services inside a twelve-person team is stronger than implying you owned the whole platform, because interviewers probe and inflated claims collapse under follow-up questions. Precision reads as seniority; vagueness reads as either junior or evasive, and both of those cost you a level.
Does an internal promotion before switching help?
It helps at the screening stage and it helps your anchor, but it does not change what happens in the design and manager rounds. If a promotion is three months away and you are otherwise unprepared, use those three months for interview preparation as well. Arriving with a better title and the same evidence produces the same level outcome.