How Tinder's Monetization Strategy Propelled it to $1B+ in Revenue

yes so today Tinder has these three different subscription tiers plus a set of inapp purchases the different subscription tiers are designed to appeal to different people and different willingness to pay each one of these monetized products is essentially focused on how do we get you matches more quickly how do we help you match with the right people and how do we help you get into conversations with the people that you've matched with I think it's really important for monetization teams to put themselves in the frame of mind of what does the consumer want how are they getting value and how do we monetize the value that they're getting rather than try to extract from it and if you can do that then you can create these monetization mechanisms that work really well for the company because they work really well for the user welcome to subversive a podcast dedicated to sharing stories from the best consumer

subscription apps in the world we'll bring you lessons for how to grow your consumer subscription business including insights and inflection points that led to exponential growth from leaders at category defining companies and Innovative startups let's get into the show my guest today is RI meta the former Chief product officer of tender which is the largest dating app in the world and one of the most viral consumer subscription products of all time in today's episode I talked to Robbie about the inherent challenges of the dating category and how tender has overcome relatively High turn rates among its users and subscribers by innovating on monetization strategies to capture more value from its best subscribers early in their user Journey so before we jump into the topic for today Robi which is going to be all of the Innovative monetization things that's that tender has done let's just start with a little

bit about your background can you tell me a little bit more about uh your career leading up to Tender and then what tender looked like when you joined the company yeah definitely so I've been a product leader my entire life I started programming when I was really young and fell in love with technology I started a game company in high school did that in college dropped out for a little bit to do that full-time and then joined at a really interesting time at Microsoft when Microsoft was making a multi-billion dollar investment into the gaming industry uh I didn't realize what that was going to be at the time that I joined but was excited to be involved and that turned out to be Xbox so I joined the Microsoft team right as they were launching the Xbox product I was one of the 20 first 20 or so people on the team did a lot of early work around multiplayer gaming and that kicked off a thread that I've had throughout my

career I've focused on consumer products and I primarily focused on consumer products that have some social element to them some way of connecting people together so key things that I've worked on I was a head of consumer product at Trip Advisor for about five years helping to really think the help the company like transition from being very review oriented being very user generated content focused to much more of a transactional Marketplace i l a team at uh Facebook focused on gen z i was a chief product officer at Tinder and for the last four or so years I started a company I've also done a bunch of solopreneur work helping companies with their product strategy and helping them accelerate their product development helping them hire product leadership that sort of thing so as a fellow lover of consumer products I have to ask was it an accident that you ended up in consumer Tech I B2B is often the

path of least resistance but what was it that Drew you to Consumer products in particular I started using Tech when I was young and started in games and have always thought about tech not just as like a way to create business results but as something that people find entertaining and rewarding and fulfilling that can change everyday people's lives and so that was the thing that I focused on from a tech standpoint and I've always been attracted to those problems that are more consumer oriented than than B2B focused I've had a little bit of B2B experience but you know even in that B2B experience you employees are people too and I think if you take a consumer mindset towards business software as a number of successful companies have done like slack for example you can create things that are able to break through the noise yeah I agree it's amazing to watch the influence that consumer Tech products

and teams have had on B2B over the last few years um but let's get back to Tender so you had stops at Microsoft Xbox at Trip Advisor and then around 2019 you found your way to T Tinder what was it that attracted you to that company around that time was a few different things I think as my career has progressed I've really focused on problems where I feel like there's a big impact to be made I've been working for the last year primarily in healthcare there's a lot of opportunity to change people people's lives through making healthare uh more affordable and more accessible and if you think about the relationships that people have in their lives what's the single most important relationship that you typically have it's the person that you're married to um and although you know Tinder has this kind of reputation as a platform specifically for casual relationships that's not true in practice it's the

largest dating app for casual relationships it's the largest dating app for long-term relationships something like 30 to 40% of people who meet their significant other now in the US do it through an online platform and so it's something you know it's a social product that millions of people use every month when it works really well for people it creates uh life transforming outcomes and I was really excited to be part of a product that has that sort of impact in addition I'm also attracted to spaces that are changing really quickly and one thing that I saw at Facebook is that the needs of younger users are changing really fast at the time I was at Facebook which was 2017 time frame we were seeing people move off of Facebook and onto Instagram and Snapchat really for two fundamental reasons one social media was getting more visual it was getting more video Centric that was something that people

could find more on Instagram and Snapchat and eventually on Tik Tok and two the sort of feed-based broadcast-based way of communicating with folks was changing and people wanted more intimate settings to communicate they wanted to do more of their social networking in messaging based products rather than in feed based products so that was another thing that was changing and I was really curious when I joined Tinder in 2019 about how that is going to change for younger users what does dating what does social discovery look like for this next Generation who is not just digitally native but also social media native yeah well first I have to say when I first moved to San Francisco I remember moving into my first apartment and this was right out of college and the previous tenant had only left one thing but it was this poster that said the top 10 keys to success in life and the first one was Marry the right person this one

decision will determine 98% of your happiness or misery in life uh and it could not be more true I I'm so grateful that I met and married the right partner um so let's get back to it sounds like

the mission of tender is part of what Drew you there as well as just the rapid change that were going on in the dating space Circa 2010 when tender really got off the ground and so you joined later in the company's history but walk me through to start with kind of the origin story of Tinder right getting off the ground on college campuses and how the company became so viral in the early days and then we'll get to how that began to sort of slow down over time and and when monetization started become more and more important Tinder is one of these rare stories of a product that had nearly instant product Market fit and it was was just a product of the moment that was solving something that people really needed and were clamoring for so prior to Tinder most of the dating products were designed for a desktop era and so they were designed for you're going to sit down you're going to spend 20 30 minutes completing a profile in

order to upload pictures you're actually going to have to find your digital camera you're going to have to plug it into your PC you're going to have to do the upload so they were designed for this kind of high friction onboarding and as a result there was only a certain segment of people that were using dating apps it wasn't anyone that wanted to meet new people it was people that had such a significant need that they were willing to go through that really long onboarding process and so match and he Harmony cated to a very serious dator who's looking for a lifelong partner and Tinder came in with a very different way of thinking about dating abs and one that was really relevant to the moment this was at a point when mobile had reached critical mass and people were instead of thinking about mobile apps as sort of big websites shrunk down to a small screen they were thinking about it in terms of what are the things that are

unique about mobile and how do we create something that works well with that platform so Tinder has a number of things that are just tailor made for mobile one is the swipe mechanic the swipe mechanic is a touchbased mechanism the thing that inspired it was the idea of kind of walking into a bar or a nightclub and scanning the room and figuring out who you want to to talk to how do you create a mobile interface that is actually really similar to that and the swipe works very well on mobile so that was the first thing that was really mobile native the second thing that was mobile native is Tinder is an inherently location-based app you see the people that are around you the people that are close to you rather than having to search in a particular neighborhood or a particular geography so it just inherently knows where you are and then the third thing that was really important was it connected to

Facebook and so you could sign in with Facebook you get access to all of your photos you could just quickly pick the photos that you wanted you could eventually take photos with your camera or pull them from your camera roll and then the profiles were really light they were something that you could type in on a mobile phone so in a matter of maybe under five minutes maybe even under two minutes if you're going really fast you could go from being a first-time user who's just downloaded to the app to someone who's actually swiping on people in your area and that lowered the friction to get into a dating app and as a results of lowering that friction it massively increased the addressable audience and it took all these people who are window Shoppers who would never go through that 30-minute process of filling out a profile but wanted to meet someone brought them into a dating experience that was just tailor made for

mobile at the time yeah and I I want to double click on that point because you'll hear people say often uh Mobile's a new platform creates all sorts of opportunities for new consumer apps or now you know AI is a new platform or New Wave it creates all sorts of new opportunities but the devil's in the details and you highlighted there a few examples of native mobile features that tender tapped into at the perfect moment in time to fundamentally lower the bar on uh singles entering the online dating pool and particularly younger singles and so can you talk a little bit more

about how the product innovations that tender built into this viral mobile app then contributed to its explosive success first at USC and then other college campuses around the country yeah absolutely and I I think one of the things that the early Tinder team did incredibly well was knowing where to reduce friction and where to increase friction and so a lot of the friction was reduced in the onboarding let's get people in the product let's get profiles built quickly but then one area where they added a lot of friction which helped a lot in the early days was in order to talk to someone you have to have op in matching so not only do I have to swipe right on you but they also have to swipe right on me and only then can we communicate with each other and that was actually very different than the dating apps at the time where you could message anyone on the platform and they could message you and the thinking

was well we want to reduce friction we just want to get people talking to each other but the Insight at Tinder was actually you only want to talk to someone if you're interested in them and they're interested in you and there's kind of this initial Tinder this initial Spark then you can have a really good conversation that's going to work well for folks especially on mobile where it's more intimate and where you're actually getting messages delivered to your phone and it's almost like chatting with a friend and so by taking that approach of understanding where to lower friction and understanding where to increase friction they were able to create something that worked a lot better for folks and they were also able to create something that felt really relevant for younger users so the initial place where they went to Market was USC a number of the founders were associated with USC they started with

Greek Liv so they started with fraternities and sororities it was a a viral product in the true sense of things in the sense that a lot of it was word of mouth so they would introduce the product to a spe particular fra or a particular sorority have everyone set it up get profiles you know just because it was location based you'd see the other people at USC that had it other people would get set up and then it just created this moment where very quickly you went from a few people on campus to using it to nearly everyone on campus using it and in that way that initial viral Loop looked a lot like the early days of Facebook where a lot of successful consumer social apps typically will P Vault themselves on some other community or network and so campus communities and networks are a really good way to do that because they're very close-knit and you've got a bunch of people in a small area who

likely want to meet each other and once Tinder found that was working really well that was a Playbook that could then be scaled to every College in the US and then eventually be scaled past that as well so let's talk about that you you enjoyed several years of essentially free growth on college campuses given the dense Network effects and the inherent viral quality of the product at some point you start to saturate us college campuses or at least you've captured most of the early adopters on those campuses how did the company find

ways to tip the scales in order to move Beyond college campuses and attack other highly dense networks that were maybe among adult populations yeah there was a series of things and so one thing I think the company was really good at was identifying this core Insight around tight networks and then figuring out ways to productize that so one of the early ways that accelerated on campus growth was creating a really strong Ambassador Network and that is something that exists both today for Tinder as well as for Bumble and now you know dozens of companies have really good oncampus Ambassador programs and so that accelerated campus-based adoption one of the other things that Tinder layered on top was to say okay you know we have a boots on the ground approach but let's actually scale this within the product and so Tinder launched Tinder U which is kind of a an in-product version of the oncampus thing

that you would get where you know someone might introduce you to the product and then you could see not only who's on your campus but also other colleges is and one of the key things around Tinder U is this concept of a swipe off so colleges would actually compete for how many swipes they can generate and then Tinder did an award you know seasonally and so that got the colleges not just interested in meeting each other but also competing against each other there were other like networks that uh Tinder could take advantage of so another thing that got created was uh Festival mode and so Festival mode says hey you know if you're going when you're not in college over the summer there's a dip in usage so how do we get people to use the product um during those summer months a lot of time people are going to festivals whether it's Coachella or stage coach or others so let's let people identify where they're going and

be able to swipe on each other both before they get to the festival so they can meet each other and meet up when they're there as well as when they're when they're on site then there was another thing around understanding that people in close proximity at specific times a day would come onto the app so there's kind of like a prime time for Tinder that happens in the evening and at the end of the week and so there's a really interesting product which takes advantage of that called swipe search where we would notice that people are coming into the product at a particular time and then send out notifications to everyone within that region to have them come into the product and that could create these moments of high engagement and activity where lots of people are swiping on each other lots of people are getting matches so the product is working well and that was a way to think about okay you know there might not be

something like a college or a festival that is organizing people together but a community can also be thought of as a bunch of people in the same geographic area around the same time of day that are interested in meeting each other and so how do we tap into that and use that as a growth lber amazing so tender starts on college campuses first at USC expands virally to other college campuses as that gets harder they figure out ways to sort of Stack the deck to saturate those college campuses with things like tender U and campus Ambassador programs then they move college campuses into other dense uh networks within the US adult population and now we're starting to get closer to the time when you join tender in 2019 and so we'll get to the key inflection point of this episode every episode of subversive focuses on an inflection point and so the inflection point is it's getting a little bit harder for

tender to grow virally and so monetization as a byproduct is becoming more and more important in order to unlock paid acquisition channels so let's start with some of the inherent challenges of the dating category right

turn to be relatively high for dating apps because you have a product where if you do your job well and somebody meets their next partner or or potentially their life partner they turn off the platform and they may never come back and so what are some of the ways that tender and other dating apps have overcome this in terms of capturing value from users earlier in their user Journey yeah so this is a a really significant Challenge and for the first three or four years of Tinder it wasn't actually clear how Tinder would monetize so all of this growth happened there was all this support for the product but there was almost zero Revenue being generated and so some of the thinking was like okay maybe advertising is the way to monetize this so we're we're going to monetize it in the same way that other social networks monetize and that's appealing because the user's not paying anything and the main like

friction that I think consumer social apps have in terms of monetization is not adding so much friction that they actually impact the social network so less people are less new people are coming in less people are engaging and communicating every day so that was like one of the main challenges that Tinder needed to solve for the other thing is like if people are coming in free to use the app and they're getting value from it and they're messaging each other and they're meeting each other what is the right Point within that flow to be able to introduce monetization without impacting the fact that the product is working for folks and so one of the things that Tinder has done that has been really inovative not just for tender but across the entire dating industry is to set up a um pretty sophisticated monetization strategy that combines subscription based monetization where there's multiple subscription

tiers with microtransactions so allart purchases um that people can buy into as well and each one of the things that's offered each one of the features that's in the subscription tier each one of the available inapp purchases is really designed to lift some inherent limitation of your usage of Tinder so that it gives you a superpower and the most clear example of that is I can't see who swiped right on me so part of the double opin match is I'm swiping on people other people are swiping on me and we match and that's a magical moment but you kind of don't know ahead of time who's interested in you you just have to do the swiping to figure it out and you may actually be missing matches along the way if you swipe left on someone who swiped right on you so the most valuable feature that Tinder has is part of Tinder gold which is the ability to see who likes you and it essentially allows you to break the rules of the game right

the game operates in a certain way you can break the rules and now you can go through all of the people who have swiped right on you and very quickly decide who you want to swipe right on and so it shortens the time between now and when you get a match and it turns out that actually people you know whether or not you swipe left or swipe right on someone is not an immutable thing if you show someone that same person three weeks from now they're 30% likely to change their opinion on them so swipe right if they swp swipe left before even in online dating Serendipity matters absolutely right time of day right kind of right frame of mind it's really important so yeah that's an example of one of the things that Tinder was able to discover as like a mechanic of the platform that we can lift that limitation if someone monetizes that creates a lot of value for folks and it doesn't slow down the engagement on the

platform it actually speeds it up got it

and and one of the things I know you've spoken about before in other forums is the importance of not only differentiating your premium value promise from your free value promise which started with tender plus and my understanding is tender plus was all about allowing users to get more swipes and more potential matches but then tender gold went a step further and had a a premium value promise that was differentiated from tender plus and that was about getting more matches and more high quality matches what about tender premium which was the third subscription tier tender launched as well as the inapp purchases you talked about boosts and super likes how did they fit into this Matrix of different premium offerings that Tinder offered yes so today Tinder has these three different subscription tiers plus a set of inapp purchases the different subscription tiers Tinder plus Tinder gold and Tinder

Platinum are designed to appeal to different people and different willingness to pay and you could roughly think about it as Tinder plus is being able to swipe more Tinder gold is about being able to get more matches and Tinder Platinum is about being able to get into more interesting conversations and so you I talked about the fact that Tinder gold lifts that limitation that you can see who swiped right on you Tinder Platinum has a feature where you can message someone before you've matched and so that's like a really Ironclad rule of Tinder as it's always been is you can't message someone until you've matched with them for Tinder Platinum users they can a limited number of times Say Hey I want to send you a message before you match and that feature was inspired by one of the inapp purchases that Tinder has so Tinder has a set of inapp purchases but two of them drive a lot of the revenue one is super

likee and the other is Boost and so super like says rather than just swipe right on you I can send you a super like which is a paid thing which shows that I'm really interested in matching with you and if someone receives a super like they're three times more likely to swipe right on you and so if there's someone you really want to match with it's a great way to try to create that match boost does something similar to what a lot of boost products do whether it's on LinkedIn or Facebook you show up a certain number of times within other people's algorithm when you use boost the probability that you show up increases for a short period of time and so each one of these monetized products is essentially focused on how do we get you matches more quickly how do we help you match with the right people and how do we help you get into conversations with the people that you've matched with

and so one question that comes up when you have products that have both premium subscriptions and inapp purchases these sort of one-offs is the possible cannibalization of the subscription itself what did you all observe tender Did You observe any cannibalization of your subscription tiers as a result of boost and super likes or was it actually complimentary it's complimentary so the inapp purchases are very deliberately designed to be Force multipliers of the features that you get within the subscription so for example if I have Tinder gold and I can see who likes me and I can match with all of those folks very quickly I'll kind of run out of people who have swiped right on me because I'll decide do I want to match with them or not and so what do I want to do at that point is I want to get more people have swiped right on me the way that I can get more people to swipe right on me is I can buy a boost that

can have me show up more in other people's feeds and then I get more people who have swiped right on me or you know if I see the people who have swiped right on me and I decide you know there's some people I want to match with some people I don't but there's other people that I've seen that I really want to match with you can send a super like and so there is a risk if it's not carefully designed that subscription products and and inapp purchases can cannibalize each other there's a risk of any I think monetization product or even free features cannibalizing each other and so that's why it's really important to think about not just what does the feature do in isolation but how do they interact with each other and how did they either negate each other or Force multiply each other and so each of the features that's worked really well on Tinder and is now a core pillar of monetization has that effect of not just

being valuable on its own but being valuable when coupled with other products in the system so let's talk more about that because I think the way you explained that was really important on its face having more subscription tiers more inapp purchases sounds great right you can offer more premium products to more of your customers you can capture more consumer surplus under the demand curve in practice it's very difficult you've got to manage more complexity it increases the complexity of the purchase decision for the consumer you potentially cannibalize your higher value premium products with lower value premium products so what needed happen internal to Tender and this starts to get into your tenure there because I believe you had launched tender uh Platinum right around the time you joined what were some of the steps that the company took around premium value positioning and Merchandising to make sure that all of

these moving parts fit together a lot of it is so one is having a strong set of principles around what the product is and isn't and so what are the rules that are sort of immutable what are the things that you're willing to change when you either you know for all users or in the case of paid users and I think one thing that Tinder has definitely had is a very clear perspective on what type of product it is and what it is solving for and so one good example of that is one of the most requested features on Tinder is height people want to be able to filter based on height that's a key criteria when you're matching with someone but Tinder very much has had the positioning of being a serendipitous way to discover people rather than a search engine for people and so it's avoided adding metadata that just says Okay I want to check check off a bunch of things and here's the people that I see and I want to choose who I want to

because that takes a lot of the fun and the discovery and the Serendipity out of dating and as a result Tinder never added the feature that's been asked for the most and so it's a good example of like sticking to your principles and knowing what those bright lines are and when you know what those bright lines are then it gives you a really nice framework within which to figure out what should be free and what should be paid what are the things where we want to have zero friction and what are some things where we're okay having some friction not simply because we want to monetize as a company but because there's a set of users who we know we're creating so much value for that they're going to be willing to pay for this because they themselves are getting more value and so one of the other things is like this idea of you know Tinder users can either use their time or their money to get more matches and so I can spend

more time swiping AB yeah and that's a good inspiration I think a lot of Tinder

monetization is inspired by social gaming and some of social Gaming's monetization is inspired by how Tinder approach things as well there's some really similar things there you've got the Grinders and the whales right the Grinders are just grinding away spending hours every day ear earning access to powerups or more matches in this case and then you've got the whales who are substituting time with money in a lot of cases absolutely and yeah it's very similar and interestingly like dating adds a couple nuances to that so younger users tend to be willing to grind more because you know they don't have as much disposable income and they're using the product differently they want to meet lots of people whereas you know older users are typically wanting to meet someone for a long-term relationship and they have more ability to pay the other thing is like when when you have a whale when you have someone who's spending

lots they're spending you know not just the $3 or $40 a month for the subscription but maybe $50 or $100 in app purchases they're doing it not for the entertainment of spending more time with the product but they're doing it because of the utility of they just want to match with more people and they want to meet more people so it's interesting to see that there's some different nuances but there's a lot of similarity as well yeah that makes a lot of sense we're going to get to the lightning round in a moment here but before we do that I guess one question I want to ask you is why why don't you think more consumer subscription apps have moved in the direction of offering multiple subscription tiers Andor Ina purchases you see a lot of gaming apps do that and and the dating category has been one where both tender and Bumble do a lot of this but outside of that there aren't a lot of good examples why is that I think

exactly for the reason that we just talked about which is it does add complexity it risk cannibalization you can very quickly take something that is working and Implement you know a paid feature that actually breaks the experience not just for the paid users but also for the free users especially if there's a social component or some way that users are interacting and I think about all of this the different subscription tiers the inap purchases these are optimizations these are not fundamental if ultimately you can't make a single subscription tier work for your business for your product that's not a monetization optimization problem that tends to be a product Market fit problem so focus on like what is the product what is the paid product that people really want and need and once you've got a thriving growing business then you could think about okay you know there's some monetization that

we're leaving on the table we have some users that are less engaged that have a lower willingness to pay what can we offer them we have other users that are really highly engaged they're getting tons of value from our product what can we offer them which makes their experience even better and so these are big optimizations they can be they can really help Drive the business but they require a strong Foundation yeah absolutely I mean some of it probably just goes back to as you said you have to have product Market fit and you have to have achieved a certain scale before adding the complexity of multiple subscription tiers and in purchases make sense and I've talked about this before but there over 100,000 consumer subscription apps in the app stores and less than 50 that have ever reached billion dollar valuations if you're too small you're probably not going to offer more than one subscription tier so get one right and

then you know maybe at some point you earn the right to expand to two or three the other thing which I just thought of I think which is interesting is that both for a lot of games as well as for Tinder you're getting there is a lot of churn right so you're getting users who are new users who you know are willing to kind of explore different models for using the product as well as paying for the product versus a lot of apps like Netflix or Com or headspace you have users who are creating a habit around this and if someone has a habit around something then they expect things to Be steady and continuous I want to kind of pay the same amount every month or every year I don't want to keep being offered new things if instead this is something Which is less focused on habit and more focused on the novelty and on these you know shorter duration use cases then people are willing to engage with these

P products more often well it goes back to business strategy too because I don't think it's any secret that most of the big gaming apps earn an outsize percentage of their revenue from a very small percentage of their whales and you've talked about how some of the gaming mechanics also make their way into the dating category and similarly I know you've mentioned before in in the case study we teach in my course that you know tender earned a pretty significant amount of its revenue from a relatively small percentage of users

what advice would you have for other consumer subscription app leaders who are looking to capture more value from their users and subscribers I think the first thing is to really understand what is the consumer trying to accomplish and how did they get value from the product it when thinking about monetization it's really easy to think about the company's needs and put those first and say okay we want to increase Revenue by 20% let's look at where we're you know where we're getting a lot of users what the conversion rates are where we might be be able to raise prices raise prices is a great example of something that is very company motivated rather than consumer motivated no consumer wants to pay more price pay a higher price they might be willing to do it but they don't want to and that actually changes the value Surplus that they get from the product every time you increase the price they might be willing to pay that

higher price but they're also getting less Surplus value from the product and so I think it's really important for monetization teams to put themselves in the frame of mind of what is the consumer want how are they getting value and how do we monetize the value that they're getting rather than try to extract from it and if you can do that then you can create these monetization mechanisms that work really well for the company because they work really well for the user and if instead you're in this mode of sort of extracting squeezing more juice from the lemon yes it's possible to do that you can hit your your over-ear numbers by doing that but that tends to get diminishing returns and I think in a very sort of Insidious way it opens you up to disruption um because it totally pulls a user who might be very intimate with your product further and further away from your product and it gets them to a

point where they're willing to consider alternatives well I loved how you described it as value Surplus because I'd bring it back to i' talked about the subscription value Loop value creation value delivery and value capture and they kind of have to work as a system and the more value Surplus you're giving away to your users the more likely they are to share it with friends and family and post about it on social media because they're delighted they have hi net promoter scores and they want to tell the world about your product but if you extract every last bit of that value even if they don't churn and some of them will they're not going to be as abuan about your product and so what that means is you end up getting less free organic growth and you have to go spend some of that extra money you just made with the higher price buying users on Facebook and Google and so you have to think about these things in a system

and I and I think it's you know the best consumer products have figured out how to balance those tensions in a way that is uh optimally efficient one last

question is is just how did all of these efforts pay out for tender to the extent you can share what sort of impact did the expansion from tender plus into tender golden tender platinum and the addition of boost super likes and other inapp purchases as well as premium merchandising strategies and ways of better explaining the premium value promises to users what did that translate to in terms of incremental revenue or growth yeah so Tinder is significantly over a billion dollars a year in Revenue if you look at it on a per monthly active user basis it is a very strong performer in terms of Revenue per user those years when we were really understanding this implementing the products implementing the merchandising to get people into these products are some of the fastest growth years in the company where we were able to add north of $100 million in terms of year-over-year Revenue increases and so there are very

significant impacts to the revenue that that Tinder was able to get as a result of this line of thinking the dating app space right now is in kind of a challenging phase where there are diminishing returns I think the opportunity to acquire users has diminished because you know if people want to use a dating app they're aware of them they're using them so that the addressable Market has been saturated which is both a good thing you know that say the price of success is running out of customers to sell vitim of your unsuccess exactly and so I think the dating app industry is in that boat right now I also think in monetization like prices have been going up they've been adding more products they've really been trying to get the most Revenue per user and as a result I think we're seeing a little bit of this it's just gotten too expensive and people are looking for other ways to meet each other and you see a lot more you know

people using Instagram or other other products for social discovery and for dating so great lesson around like how to really maximize monetization and there's always this kind of like back and forth you know what is the weak Link in the chain for your product growth is it monetization is it engagement and I think now we're in a time in the dating industry where it's actually not monetization the industry is doing a fantastic job of mon monetizing users they do have and there's an engagement problem and the question is how do you get people to use these products more more consistently and reduce the the turn rates and just increase overall engagement yeah so maybe to wrap things up here I mean the way I've interpreted a lot of what we talked about today is again if you think about it in terms of the three steps of value creation value delivery and value capture when tender exploded onto the scenes around 2010 the

product was just so Innovative so perfectly suited to the mobile form factor that they generated a huge amount of value for users and they weren't monetizing it at all so there's a huge amount of value Surplus to use your word and that led to extremely cost-efficient value delivery because it just spread virally but then at some point around the time you joined in 2019 that organic growth Loop was starting to slow down a little bit there was more and more focus on capturing value from users and subscribers maximizing the value of those whales and that drove another inflection point which was the inflection we talked about today hundreds of millions of dollars in incremental Revenue growth but then at some point that comes at a cost and it makes it even harder to acquire users organically or to engage and retain them and you start to open yourselves up to disruption through Instagram and other

uh free Alternatives and so it sort of goes full circle and now we're back to how can tender innovate on value creation and value delivery again in order to keep users happy absolutely and I think every business goes through that you may go through it at different paces and in different order but there's typically a weak link and there's typically you once you do really good job solving for that that doesn't solve all problems it just you know creates new problems or highlights other problems that you need to solve for

absolutely all right well we're going to finish up with the lightning round so I'm going to ask you a few questions they meant to be rapid fire so you know one one minute answers or less first one is what was the best part of working at Tinder and what's one thing you would have changed the best part of working with Tinder was actually talking to people and you would say I'm working I work at Tinder and they be like oh you know I met my partner I met my significant other on Tinder and you get into these really interesting stories and sometimes where I least expected it so that was really fun that's so funny to say that I have to relate quickly it's a tangent but when I worked at Quizlet which was one of these other you know sort of ubiquitous edtech companies I I hadn't even heard of Quizlet until I went home for the holidays one year and all of my younger cousins were like oh you're you're joining Quizlet I've been

using Quizlet for years to study for my tests and prepare for homework assignments and then I would like walk into Starbucks and Barista would see my Quizlet hat or my Quizlet shirt and and be like oh you work at Quizlet that's amazing I love Quizlet I I flight attendant do it once and so uh it's that's fun when you it goes back to why it's great working on consumer products because you get all these people who come out of the woodwork and tell you how much your products impacted their lives um so that's really cool to hear absolutely besides tender what's your favorite consumer subscription app and why let's see my favorite consumer subscription app it's not necessarily consumer but one I've been using recently that I absolutely love is screen studio so it is a screen recording app but what it does is as you're recording it figures out what you're focused on so follows your your cursor and then it zooms in and it

creates these like beautiful animations and then you can you can narrate them if you want and it's just such a nice way to create demos it's kind of like Loom on steroids especially if you want to stare if you want to share stuff on YouTube or on LinkedIn or other places and it's just an example one it's like a beautifully designed app it's really thoughtful from a ux perspective it solves the use case that I've always had which is I don't want to spend a bunch of time editing a video and it kind of does that automatically and so it's a subscription based app it actually just went from a one-time payment to a subscription I was like oh you know I don't know if I want to sign up for this every month not because I didn't see the value but just because I didn't want to necessarily move models and I eventually you know I did end up subscribing and I really really enjoyed I used it this morning actually cool yeah I know you're

working on your own startup right now so I imagine the demo aspect of that product comes in handy often and maybe we'll give you a minute at the end here to to plug your new startup in your experience what's the hardest thing about working on consumer subscription apps or really subscription businesses of any kind I think the hardest thing is what we talked about in terms of understanding the consumer value particularly for subscription apps when you charge someone a subscription there's kind of two things that there's one benefit and then one headwind a benefit is like sometimes people forget about the subscription and then you just get all of this kind of free monetization because you're not creating value for people and they're still paying you and yeah that's you know it's good in some ways but I also think it's it's bad because it dulls the senses around the real thing that you need to solve for is you need to provide

enough value every single month that a person wants to continue to pay for your product because no matter you know even if you have these kind of like dormant users at some point they cancel and where you're going to build your business is on the users who want to continue to use it and so you know Netflix is a really good example Netflix invests a massive amount in content creation because they need to promise their user that every single month we're going to give you one or more shows that you're going to binge and you're going to love and that is a heavy lift like your responsibility to the user never goes away and in that way I think it is different than B2B SAS is often like you'll pay monthly for a utility so you can create a utility one time deliver that utility to the business user and they'll continue to pay for it as long as they use it whereas consumers have a much higher bar they want to be

delighted and entertained and fulfilled every single month otherwise they're going to cancel and that is a re you know it's a wonderful business model it grows in a compounding way but it's something that uh you need to really be conscious of and and building for yeah it really is challenging especially just one subscription tier but as you get into multiple tiers absolutely you know that that helps to an extent but still an inherent challenge of the subscription model um what's the most Innovative growth tactic you've seen a consumer subscription app use recently yeah it's a good question Innovative things are around lengthening The Landing experience and so there's been this kind of like wisdom around oh you want to get people to the checkout screen as quickly as possible eliminate steps in the funnel so that it's just really easy in a minute you can go from consideration to purchase what I'm seeing more often

now and this is something that we've done recently at Sesame the Healthcare company that I'm working with is really lengthening the funnel so we went from like a three-page checkout experience to purchase our weight loss program to a 25 page checkout experience where we go through an entire intake where we ask the person about their weight loss Journey we ask them about their health goals their medical history we just get a ton of information about them that is really useful for the provider but it's also really useful for the patient to be able to consider what they're looking to achieve and and how they're thinking about how this kind of fits into life and so we went from three page checkout to 25 page checkout and our conversion rate went up by 40% um and N is the canical example with the super long onboarding flow and so it doesn't work in every category but in some categories it certainly works it really works well

because you're essentially activating the user as part of their purchase experience so by the time they hit checkout they're not only you know they're not a customer starting from zero they are already someone who's convinced and that payment is just kind of one step along the path of them getting value because they've already started to get value right and then you've got the icing on the cake which is you gathered all that additional user data from them and onboarding it so you can better personalize their experience absolutely and it works great in healthcare it works well in Fitness I think there's other areas as well Wellness as another area where it works well so last question how will the consumer subscription app ecosystem change in the next one to two years and I'll specifically add how do you think AI is going to impact things like subscription strategies and price pring given that a lot of these AI features

have non-trivial costs associated with supporting them I think there's a push and a pull here so you know companies because there are non-trivial marginal costs are going to have to figure out how to monetize their AI features so more companies are going to add additional subscription tiers they're going to add you know in purchase products companies that were free before that were advertising supported will now add subscriptions and you know I think what's going to happen with consumers is yeah AI going to create a lot of value for them and in some cases they're going to be willing to pay for that but I also think consumers are starting to get overwhelmed by the number of subscriptions that they're paying for $10 a month $20 a month Stacks up really quickly especially when you look at sort of the average income and where people are spending money in the US there's already I think fatigue on do I have a

perplexity account and a cloud account and a chat gbt account and you know $60 $70 a month for that is actually a large amount to spend on a tool so I think there is a ton of opportunity that AI is creating there's also going to be companies that are going to have to figure out how to monetize it at the same time I think consumers are going to be more finicky about what they're willing to pay for especially on an ongoing subscription basis versus what they're not yeah it's that whole idea of subscription fatigue and you know five years ago there were maybe three to five consumer subscription apps that everybody had and now there's hundreds of them out there thousands and so customers are getting a bit more Discerning about what they can afford well this was great thank you so much for joining the podcast today Robbie it's been such a pleasure having you as always anything you want to say before

we hop off here yeah thanks for having me on the podcast I always enjoy the conversations I've enjoyed participating in uh your class yeah if people want to find out more about me and about what I'm working on just go to Robb mea.com I have a substack newsletter which I'm trying to post to more often so would love to hear from you and have you as a subscriber I've also been working on a side project which is a data analysis tool called GP tcsv doai and our goal especially for product managers or other people user researchers who are working with a lot of open-ended Text data is to create a data analysis tool designed from the ground up to use llms to make analyzing that data easier and more powerful and I will say I have used GPT CSV multiple times for my own client business and it's a fantastic tool so if you haven't checked it already please do thanks again one more time to Robie for joining the podcast it's been a pleasure

yeah thanks for having me