THE SUCCESS OF TINDER

Why did Tinder emerge victorious compared

to other online dating apps?

ESCP – MARKET INNOVATION & TECHNOLOGY – GROUP 2:

Francesco CIPOLLA; Mateo DONCEL; Bertille GOUDET; Mykola HOLYEV; Baptiste

MEUNIER; Harshe SAHRAWAT; Ahana SIROHI

PLAGIARISM STATEMENT
We certify that this assignment is our own work, based on our personal study and research and that we
have acknowledged all material and sources used in its preparation, whether they be books, articles,
reports, lecture notes, and any other kind of document, electronic or personal communication. We also
certify that this assignment has not previously been submitted for assessment in any other unit, except
where specific permission has been granted from all unit coordinators involved, or at any other time in this
unit, and that we have not copied in part or whole or otherwise plagiarised the work of other students and
persons
TABLE OF CONTENT

TABLE OF CONTENT 1

INTRODUCTION 2
MEASURE OF SUCCESS 2
OFFERING 4
Revenue Model 4
Pricing 7

OFFERING NETWORK 8
Complementary Offerings 8
Partnerships & Business Relationships 11

OFFERING EVOLUTION 14
Order of Entry 14
Generations of Technology 17

CONCLUSION & MANAGERIAL LEARNINGS 19

REFERENCES 20

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INTRODUCTION

The Internet, changing individual’s lifestyles of working and communicating, has overturned businesses
from “entertainment to retailing.” Tinder managed to do this by changing one of the most natural human
connections: ‘choosing a mate.’ Finding this mate in the online dating sphere seemed improbable before
Tinder, but the strong proliferation of smartphones has put virtual bars in people’s pockets, where
singletons can blend free from the imperatives of social or physical topography. Indeed, it was through a
tedious phone call between the founders Sean Rad and Justin Mateen that the idea of Tinder was
conceived. They discussed the difficulty of meeting people online and the lack of efficiency and simplicity
in matchmaking of current websites, at the time. As such, they decided to digitalise how people
“physically court” via the use of a smartphone and a “yes-no” swiping mechanism.

In the realm of dating applications and websites, individuals have many options. They can go old school
and visit Match.com by filling out questions in order for an algorithm, derived from psychological research
publications, to find their perfect match. They can go on OKCupid to find a life companion or an easy
date. Alternatively, they can let women do the first move on Bumble. Of course, there are more options:
Grindr caters to gay, bi, trans, and queer people; Coffee Meets Bagel caters to those seeking a more
concentrated dating experience; and Hinge caters to those seeking romance.

There are many more dating apps available. But, one thing is apparent: despite the multitude of online
dating apps available on the market, people are preferring Tinder and the swipey dating app’s popularity
is only growing as rival dating apps’ numbers are in decline.

In essence, from its initial disruption, Tinder is emerging victorious in the dating app battle by a significant
margin.

I. MEASURE OF SUCCESS

Since its creation in 2012, Tinder has not only beaten out old market incumbents in online dating such as
Match.com and OKCupid, but also technology giants who lacked to capitalise on such an opportunity.
Tinder has also risen to scale and popularity faster than any other apps or products in the online dating
category. Tinder’s patented Swipe© technology has led to significant adoption, particularly among the 18
to 30 year-old users. In 2020, Tinder was counting 6.3 million subscribers and 75 million monthly active
users (Statista, 2022).

From revenues to number of users, Tinder is the most successful online dating app in the world. The
following graph measures Tinder’s success, compared to rivals, in terms of revenue and downloads.
Indeed, as of 2021, Tinder is the top grossing dating app worldwide in terms of overall revenue, app store
revenue and Google Play revenue.

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 Graph 1: Most Popular Dating Apps by monthly in-app purchase revenues & downloads (Statista, 2021)

As of january 31st 2021, Tinder’s monthly in-app purchase revenue was triple that of the second highest
grossing app, Bumble, with the largest in-app purchase revenue in the past month amounting to more
than 65 million U.S. dollars (Statista, 2021a). In terms of downloads, as of 2021, mobile dating market
leader Tinder was the world’s most downloaded dating app, generating 67 million downloads (Statista,
2021b).

To visually picture Tinder’s success since its creation in 2012, the following graph shows Tinder’s
acquisition of paying users (combining number of users with a monetary value) has outpaced other
services in the online dating industry since 2015, compared to other services.

Graph 2: Acquisition of paying users in the online dating industry (SeekingAlpha, 2018)

With all this in mind, the following question emerges: what made Tinder so successful compared to the
other online dating platforms?

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 The following elements, outlined in the table, can help us identify the reasons for Tinder’s success
compared to other online dating platforms. A score was made from 1 to 5 for the following competitors of
Tinder’s on three main dimensions: offering, offering network, and offering evolution. In each cell there will
be a score from 1 - 5 in which we tried to represent the degree in which the company is better than their
competitors in each row. The scores tabulated below have been determined subjectively and will be
argued in the subsequent sections of the report.

Table 1. Difference of Success of Online Dating Platforms

Tinder Bumble Hinge Grindr Online

websites

OFFERING

Revenue Model 4 4 3 2 2

Pricing / Bundling 3 3 3 3 4

OFFERING NETWORK

Complementary Offerings 4 3 1 N/A* N/A*

Partnerships & Business 4 4 1 N/A* N/A*

Relationships

OFFERING EVOLUTION

Order of Entry (Ability to 5 N/A* N/A* N/A* 2

disrupt the market)

Number of Generations 2 2 3 2 4
(Technological
complexity)

*: No comparison made for such a criteria

As highlighted in the above table, Tinder’s success was explained by their ability to disrupt the existing
dating market by penetrating into a market dominated by a younger demographic. This success was
supported by Match Group as Tinder was part of their incubator. Match Group therefore let its established
brands be disrupted by Tinder to protect its global market leadership (cc. Order of Entry section).

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 II. OFFERING

Revenue Model

General – Introduction

Dating apps have become key aggregators due to their proliferation and international popularity. And yet
we possess remarkably little knowledge about these apps. Some questions that spring to mind are: how
is economic value attributed and extracted from dating app data and how is it monetised? Through our
research, we seek to provide answers to these questions, answers that explain why dating apps are so
lucrative. We do so through the examination of three apps. These are: the first is Grindr, which is owned
by Kunlun, a Chinese gaming and internet services firm; the second is Tinder which is one of the many
diverse array of dating apps owned by the publicly listed company Match Group; and finally, Bumble,
which has borne witness to its fair share of acquisition attempts by Match group and is a dating app
wherein women initiate the first contact.

Grindr

Brainchild of founder Joel Simkai, Grindr was launched in 2009. By 2013, Grindr’s revenue structure took
the shape of a freemium business model. To elaborate, this model follows the twofold process: first, users
were granted unrestricted, but ad-supported, access to the app’s basic features free-of-cost and
subsequently, introduced an enhanced version of Grindr – Grindr Xtra as a paid service with no ads. The
subscription-based model proved to be a success with Grindr’s users. Statistically speaking, the ratio of
revenue was 75:25, with the former generated from subscribers and the latter from advertising (Wilken,
Burgess and Albury, 2019).

Economies of datafication

An analysis of subscription preferences among users revealed that the preferred subscription length was
clearly the 12-month option, out of the other options of one, two and six month. This, coupled with
end-user analytics, revealed a promising tale – one that executives at Grindr were keen on, Grindr was
transforming from a standalone dating app to a broader social platform. Or, in the words of Grindr Vice
President of Marketing, Peter Sloterdyk, Grindr was becoming a “lifestyle-oriented ‘utility’, a way for users
to discover and navigate the world around them” (Wilken, Burgess and Albury, 2019). The decision to
reposition Grindr as a lifestyle platform was compounded by a desire to control ‘data pours’. In other
words, control not only the end-user data flowing into Grindr’s servers but also the vendors access to said
data. The desire to own both the server and client side pipeline is evidence of the maturation of the app’s
business model. This however is not unique to Grindr. Our research notes that as platforms mature they
metamorph, of sorts, into data firms whose business models centre on their ability to both harvest and
repurpose data. The rationale behind this is because platforms can set higher advertising rates in
exchange for rich user-generated geodata. In essence, the data comes to form the main saleable asset
for the owners of platforms such as Grindr.

Tinder

As briefly touched upon previously, monetisation opportunities for dating apps tend to fall primarily into
three categories: subscription plans, single purchases and advertising. To this end, we understand that
there are limited means by which revenue can be generated from end-user data, despite it being the

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‘core’ asset. The combination of restricted revenue options and a preference for freemium business
models means that the question of how monetisation is to be achieved does not typically yield novel
solutions amongst dating app participants. How do these services then distinguish themselves? The
answer lies in the implementation of business strategy coupled with subtle differentiations in revenue
generation methods. Brands within Match Group are a case in point. To elaborate, brands are aligned
according to one of two categories: the first being ‘hard paywall brands’ such as Match, OurTime and
Meetic; the second being ‘soft paywall brands’ like Tinder. That is not to say that these apps do not enjoy
similar free- or a la carte features. Instead, what this means is that there is great variation with regard to
prime subscription drivers. The former, hard paywall brands, subscribe with the sole intention to
communicate with other members whilst the latter, invest in the flexibility surrounding custom searches.
These include expanded usage opportunities such as Tinder’s swipe right feature in conjunction with
consumer insight functionalities such as the ability to see who has liked or viewed your profile. From this it
can be gathered that these two brand categories have not only distinct pricing structures but also attract
different levels of marketing support. Soft paywall brands like Tinder receive a limited marketing spend
and are more reliant on viral, word-of-mouth growth. In contrast, hard paywall brands attract users via
on-and-off-line marketing spend.

Bumble

Having discussed the aforementioned, it should come as no surprise that the Bumble app operates via a
‘freemium’ model, at least when it initially launched in 2015. Currently, however, 10% of users pay for
premium features including ‘SuperSwipes’ that allow users to ‘heart’ profiles that they find especially
attractive; and, ‘Bumble Boost’, a monthly subscription which offers users the opportunity to search for
other users who have ‘liked’ the subscriber’s profile, and rematch with ‘expired connections.’ The
company has adopted an ‘omni-channel approach’ to the business, diversifying to add a ‘friend-finder’
function (Bumble BFF) and a platform that matches business contacts, including would-be business
mentors and mentees (Bumble Bizz). However, as in the footsteps of the dating app players, at the time,
the ‘swipe and match’ functions represent Bumble’s core business.

Between the years 2017 and 2018, a paradigm shift occurred – Bumble was re-branding from a dating
app to a ‘networking app’, or rather as Bumble likes to put it ‘a social networking app that facilitates
dating’. But why, you may ask? In the words best explained by Bumble’s head of brand – Alex Williamson,
“We like to think of Bumble as the inverse of Facebook. Where Facebook is the place where you can
connect with the people that you know, Bumble is the place you connect with the people you don’t know”
(Wilken, Burgess and Albury, 2019). To drive this point home, Bumble simultaneously decoupled it’s user
sign-up and identity verification processes from one that required a linked Facebook account. In other
words, Bumble was shoring up its boundaries of data-ownership and market share. This is a not-so-subtle
nod to the monetisation of user data, as seen in the cases explained earlier.

Comparison

What emerges from our discussion is that despite the different stages of development and operating scale
of the three firms, Grindr, Tinder and Bumble, there is a common thread between them in terms of
revenue generation. First, all three of them rely in some manner on the monetisation of user data; and,
second, all of them have adopted a ‘freemium business model’ -– a mix of ad-supported ‘free’ services
and paid subscription services. With only subtle variations on how these arrangements play out,
determined by the target markets and particular platform specificities, how does Tinder emerge as a
leader?

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Pricing

Tinder

What is interesting is that it’s success is not gatekept. In other words, it is free to download. In specific,
the basic features are available to all users, but those willing to pay can unlock additional ones. To give an
example, when a user signs into Tinder, they are immediately greeted with a seemingly unlimited list of
other nearby users. However, there is no guarantee that their profile will be viewed by anyone else on the
app. Even if they match with someone, the match is queued to the list of those already made by said
someone. This need not necessarily remain the case. By paying, the user has access to features such as
‘Boosts’ and ‘Super Likes’. ‘Boosts’ temporarily increase the chances of being found by other users for a
period of half-an-hour, while ‘Super Likes’ notifies other users that someone is particularly interested in
them. Both ‘Boosts’ and ‘Super Likes’ are sold in bundles: one Boost costs $6.99, five cost $30 and ten
cost $50; ‘Super Likes’ cost $8 for a bundle of five, $30 for a bundle of 25 and finally $60 for a bundle of
60. Alternatively, the ‘Super Boosts’ feature is sold on a time-duration basis, priced at $39.99 for three
hours, $69.99 for six hours and $129.99 for 12 hours.

Over and above these purchases, users can choose to upgrade from a basic subscription to one of the
premium ones: Plus, Gold or Platinum. The first, Plus, allows users to go back and review the profiles of
users that they initially discarded, in the event that they have changed their mind, removes
advertisements and enables the user to view profiles from anywhere in the world thanks to the “passport”
function. Prices start at $4.99 per month. Gold has not only all the features of Plus, but also additionally
offers 5 Super Likes per week as well as a free Boost per month, plus the ability to see who swiped right
on you and a list of recommended profiles. Pricing starts at $14.99 per month. Platinum, in addition to the
Gold and Plus features, allows you to send messages to users before they've even matched with you, lets
you see who has swiped right on you in the last 7 days, and lets people you swipe right on see your
profile faster. Pricing for Platinum starts at $19.99 per month (Antonelli, 2021).

Competitors

As is the case with Tinder, other competitors such as Bumble and Hinge use the very similar “freemium
model” with a revenue model based on “buy features” and subscription potential. They all have similar
subscription plans with similar prices. As seen below, there is no real differentiation between Tinder’s
pricing strategy and other competitors.

Table 2. Competitors’ Pricing Strategies compared to Tinder (Antonelli, 2021a, 2021b, 2021c)
Buy Features Subscription

Tinder Boosts: $6.99 Plus: $4.99

SuperLikes: $0.80 Gold: $9.99
Platinum: $19.99

Bumble Spotlight: $6.99 for one Boost: $16.99 per month

SuperSwipe: $1.75 Premium: $39.99

Hinge Roses:$3.33 Premium: $29.99 per month

Boosts: $9.99

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There are price differences between Tinder, Hinge and Bumble. The features that can be purchased are
priced similarly between the three competitors if purchased individually and not bundled, while Tinder's
features are not the cheapest if purchased as a bundle. In terms of different subscriptions, Tinder offers
more options than its competitors and lower prices, but unlike Bumble it does not offer weekly
subscriptions but only monthly ones. It does not seem that Tinder has an advantage over its competitors
in terms of pricing, but rather that each of the competitors offers different paid services in terms of
features and prices.

In a nutshell, Tinder’s revenue model, pricing and bundling strategy is most definitely not the reason for
Tinder’s immense success.

III. OFFERING NETWORK

Complementary Offerings

To analyse the differences in the offering networks that Tinder has in comparison to its competitors, we
came up with the following chart. The following scale, used in table 2, mirrors Table 1 in the context of
Tinder’s success (cc. Measure of Success section)

Below the table, there will be each Dimension more specifically explained.

Table 3. Complementary Offerings of Online Dating Platforms

Tinder Bumble Hinge

Premium 5 3 2
Subscription
Features

Profile 4 5 0
Validation
Complementar
y Assets Smart Photos 5 0 0

Explore 5 0 0
Section & SN

Modes 0 5 0

Complementary Offering refers to all the add-on features offered by the company, to enhance the core
product / service.

In the case of Tinder, we were able to find the following complementary offerings to improve the user’s
experience in the app and their engagement with it:

● Premium Subscription Features: Comparing Tinder’s Premium Subscription Features to their

competitors, we believe that they have the best bundles in relation to price/quality because of the
different choices they provide.

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 ● Profile Validation: We believe that not only having the possibility to validate one’s profile but also
being able to see only profiles with the validation tick is a very important complementary offering
because the main idea behind it is to create a safer community and avoid “catfishing” - profiles of
fake people or people pretending to be someone else - by adding a blue tick next to one's name.
However, it must be said that, in Bumble it is easier to find the “show only verified profiles” option.

● Smart Photos: Using an A/B testing method, Tinder learns which of the pictures in your profile
performs better. With this learning taken into consideration, then Tinder automatically displays
that picture as the user’s first picture in order to increase their likes and, therefore, their
engagement with the app. In fact, it is said that the usage of Smart Photos increases matches by
at least 12% (The Sun UK, 2016). The competitors are yet to introduce this extra feature.

● Explore Section & Swipe Night (SN): The explore section allows users to swipe through profiles
with specific objectives (friendships, party, dating, long term relationships) or personal tastes (pet
friendly, self caring person);(Iovine, 2021). The latter feature, the Swipe Night is an interactive
video story. It lets users play and choose the outcome of the story to finally show them profiles
that made the same choices they did (Silberling, 2021). Again, neither of Tinder’s competitors
have this feature that improves users engagement with the app and creates, in a way, a
community. These features roughly aim to transform Tinder into a social media app.

In the case of Bumble:

● Profile Validation: Bumble’s profile validation is the same as that of Tinder’s however, Bumble’s
“show only verified profiles” is easier to locate than it is in Tinder.

● Premium Subscription Features: In contrast to Tinder, Bumble has fewer options regarding
premium subscriptions with only two options, Premium and Boost. They are both similar to Tinder
Platinum and Tinder’s Plus, respectively, albeit more expensive.

● Bumble Modes: Given the technology and interface, Bumble seized the opportunity to create two
different strategic business units: Bumble Bff, to meet new friends and find a community that suits
the user; and Bumble Bizz, which is a professional networking segment (Financial Times, 2018).
These are features that neither Tinder or Hinge currently possess. It allows Bumble the
opportunity to transcend from occupying just the online dating space to becoming a broader
social media platform.

In the case of Hinge:

● Premium Subscription Features: In comparison to Tinder and Bumble, Hinge has only one
option for a premium subscription: preferred Members. Hinge’s subscription offers the main
features of Tinder Gold and Bumble Premium but misses out on many of the others that the rival
companies offer. However, it must be noted that their subscription is the cheapest.

Conclusion

From the aforementioned we gather that Tinder’s complementary offering have been significant in order
to go beyond just the easy-to-use app that its founders initially created. As seen in the case of the
offerings such as the ‘Explore Section’ and the ‘Night Swipe’ via which Tinder seeks to increase user

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engagement with the app. The offering network of Tinder is simply a consequence of the success of
Tinder, and ensured the sustainability of its success. It does not however provide an explanation on how
Tinder became such a leader in the dating industry.

Partnerships & Business Relationships

Through Match group, Tinder has access to a portfolio of Intellectual Property of many different dating
apps from match.com, founded in 1995 to various others like OkCupid (founded in 2004), Hinge
(launched in 2011), and so on. In fact, the only major competitor of Tinder is Bumble which was also
founded by Tinder’s ex-employee (and currently resists acquisition as stated above).

Graph 3: An overview of the prominent brands in The Match Group which also owns Tinder
(Match Group, 2022)

But Tinder does use technology from other partners, and a large part of that is in the form of ubiquitous
services provided by the Big Tech giants. Tinder licences the Amazon Web Services (AWS)’s image
recognition technology ‘Rekognition’ to tag photos with personality markers such as ‘creative’, ‘outdoorsy’,
‘adventurous’, etc, to power its algorithms and to provide features such as top pick to premium users (a
complementary technology asset). It licences this technology as it would be very expensive for Tinder to
develop these capabilities on its own due to intensive capital and knowledge requirements with a steep
learning curve (Carey, S., 2019). Tinder additionally uses Facebook’s (now Meta) advertisement service
to provide advertisements on its platform. This is another instance where a smaller tech company is
dependent on the complementary infrastructure of a big tech giant to be scalable and cost-efficient (also a
complementary technology asset).

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Due to Tinder’s dominance in the dating industry, and it's very high brand awareness, at nearly 82%,
Match Group (Tinder) is trying to maintain its position in the market by pursuing complementary
partnerships with different companies to improve their own offerings.

Some instances of them for Tinder are:

● Perhaps one of Tinder’s most important relationships is the one with Meta Inc. (earlier known as
Facebook). From the very beginning, the app was tightly integrated with Facebook. This
partnership with Facebook is also for the ads on its platform (Edmunds, S. , 2017). Its primary
mode of monetization is still paid subscription but to derive value from the non-paying users
Tinder uses online advertisements. It uses Facebook’s Audience network to let potential
advertisers buy and place ads on their platform.

● Tinder has integrated the service of the ride-hailing company Lyft in late 2021 as the pandemic
recedes, to improve customer engagement by increasing the number of people actually meeting
physically (Kim, L., 2021). This is a beneficial partnership for both parties as it increases the
visibility of the smaller ride-hailing app Lyft quite a bit, while for Tinder, it facilitates a seamless
experience for people who have matched with another person.

● Tinder has had a partnership with Spotify since 2016 and recently a new feature called “music
mode” was launched in 2021, where Tinder Users can hear a 30-second looped preview of a
potential match’s chosen song while checking out their profile (Maliks, A., 2021) . Tinder users
also need to link their accounts with Spotify to use this feature. It is another example of a mutually
beneficial partnership as it allows both companies to benefit each other in a complementary
manner. For Spotify, licensing its technology and integrating with Tinder encourages more Tinder
users to sign up for Spotify, and thus helps expand the customer base, while for Tinder it makes
the user experience more interactive, meaningful, and addictive and allows it to increase user
retention while also reducing the negative impacts of multi-homing effects from other dating apps
(especially Bumble) which may also promise an engaging user experience.

● Tinder is also very much dependent on the other two major tech giants Alphabet (Google) and
Apple. It is their platforms that act as a gateway for its app (as an intermediary to its customers),
and it is still very much dependent on them (and even other social media giants) for increasing
customer visibility and brand awareness. Therefore, relationships with these platform providers
are complementary to its business growth prospects (as they are a very important part of the
distribution segment of its business).

Conclusion

In conclusion, partnerships are essential for Tinder to maintain its competitive advantage in today's
technology infrastructure, and trends of information exchange. It helps to fend off new competitors, but
was not responsible for the early success of Tinder.

Therefore, thus far, we have seen that the core business functions of Tinder and the diversity in its
offerings are essential to keep and sustain Tinder’s success but do not explain to which extent it became
the world’s biggest dating app. In order to understand such a victory, the evolution of the app will be
analysed, keeping into consideration the demands trajectories that Tinder targeted compared to the
existing players.

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 IV. OFFERING EVOLUTION

Order of Entry

Tinder and the Drama of Disruption

Before Tinder’s “swipe” app, the market was dominated by traditional dating platforms such as OkCupid
or Match.com. These apps were created in the early 2000 and were originally built on desktops. Since the
Apple App Store creation, they jumped into smartphones to base their platform. OkCupid and Match.com
had a market worth of $1.33bn in 2011 (LaRosa, 2012).

Graph 5: Market share evolution of two of the most mobile dating apps in the United-States
(Abolfathi & Santamaria, 2020)

With this in mind, it is interesting to analyse how apps have been disrupted on such a short notice (i.e.,
Graph 5). What is interesting to point out is that Tinder’s technological offering was lower than what was
found in competitive offerings. The app suffered from recurring technical issues and security breaches.
This was validated by multiple users who pointed out such technical faults of the Tinder app (Frizell,
2014).

However, since the launch of the platform, Tinder did not target the traditional customer groups of dating
apps, which were older people (Hogan, Li, & Dutton, 2011). It should be noted that traditional websites
struggled to attract the younger generation as these websites were focusing on finding and building a
serious relationship. It is understood that the younger generation represents a tremendous reserve of
potential users as they are more likely to be single. Also, younger people are less looking for a stable
relationship but rather intense attraction and intense love relationship (Malhotra, 2016), making younger
people look for love more often.

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 Graph 6: Percent of relationships since 1997 that began online, by age when
relationship started (within 10 year age bins); (Hogan, Li, & Dutton, 2011)

However, Tinder has succeeded as they have been able to break this market and later on disrupt the
established player. When traditional apps mainly looked to match people on numerous personal criteria,
Tinder directly targeted the physical attributes that are more important for younger generations (Malhotra,
2016).

But the most significant factor that led to disruption was the gamification of dating. Gamification is
according to N. Pelling the process of “incentivising users with mechanics commonly used in games,
broadening them to non-game contexts (Martens and Mueller, 2016). Research has shown that apps that
propose such a gamified experience face faster growth than others in the young-user segment (Abolfathi
& Santamaria, 2020). This gamified experience was established through the swipe function and the
variable rewards. The swipe is a primitive gesture that is easier and faster than clicking on a button and
becoming subconscious. This unconscious gesture enables the app to keep the user’s attention and
makes him stay longer on the app (Partner, 2018).

The other feature that enabled Tinder to gamify dating and break into the youngers’ market was the
variable reward process. Indeed, the number of swipes before a match is variable. Therefore, this follows
the experiment of Skinner, which showed that “intermittent reinforcement” in both quantity (number of
matches) and at different time intervals pushes the user (pigeons in its experiment) to obsessively play
(swipe) without losing motivation (Skinner, 1969). This phenomenon is explained as when swiping,
knowing that we will get a reward (a match) but with no certainty of when nor how many variable rewards
will activate the nucleus accumbens brain region (Schultz, 1997). This region gets activated with other
addictive products (food, drugs, alcohol, etc.). Moreover, it should be noted that this region is even more
stimulated while swiping than when receiving the reward (a match) (Johnson & Ghuman, 2021).

Therefore, the gamification of Tinder enabled through the swipe, and variable reward functions allowed
the app to be seen as fun compared to other apps despite a poorer technology, as per the graph below.
(Abolfathi & Santamaria, 2020).

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 Graph 7: Dating apps user scores by dimension (Abolfathi & Santamaria, 2020)

As the founder was part of the targeted segment, this helped him develop the successful app gamified
gestures and find a solution to its problem that he cannot solve with the existing offering. He was a shy
person and wanted to eliminate the barriers to dating (i.e. whether or not this person is interested in you)
x (Rad, 2017). Therefore, he has been able to win the younger market as he was part of this market (25
years old when he launched Tinder) and provided a solution for its problem, which was also one of the
younger generations towards online dating.

This gamification was necessary but insufficient to ensure Tinder’s success in the youngers’ market.
Gamification needed to be combined with an effective network effect, done rapidly and at a significant
scale. As Tinder is a location-based dating app, it was essential to create dense networks within close
areas to make it effective and relevant for users to create it. Therefore they targeted universities by
organising events and focusing on college students (Rad, 2017). This enabled the company to gather half
a million users within its first 6 months following launch, all concentrated within areas to have suitable
possible matches. An equilibrium between supply and demand was also crucial in developing Tinder’s
app. Indeed, the app found out that a sufficient supply (girls in the case of Tinder) was a necessary step
to get a high engagement as the demand (boys) would follow (Wu, 2017). The same effect is observed for
the girls’ nights within nightclubs. Therefore, they focused their marketing on attracting girls in universities
as early adopters by inviting them into parties and signing up with sororities (Medal, 2015).

The last aspect contributing to Tinder’s success is the implementation within the Match group. Indeed, the
company has been protected by the world’s largest dating corporation of dating apps. Tinder was part of
the company’s incubator that enabled it to benefit from the group’s support and thus got a significant
number of customers without any revenue generation until 2015 (Ha, 2014). Match group was therefore
not intimidated to see some of its established apps such as OkCupid or Match.com being disrupted. They
were part of the same corporation and later experienced the envelopment of some features (I.e. OkCupid
introduced the Swipe function on its app).

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To conclude, Tinder’s disruptive mechanism over established dating apps has been enabled as the app
targeted at the beginning younger generations that established players struggled to break into. They’ve
been able to gamify their user experience, represented with the swipe function and the variable rewards.
Following this gamification, Tinder targeted girls within universities as early adopters to create a
qualitative network effect. Once Tinder was established and the network effect was running, many people
joined Tinder, students and youngsters at first sight, but more and more older people were previously
using established players (graph 1). However, this disruption has been internal as Match Group
internalised Tinder within its incubator and supported its growth.

A marvel in Tinder’s success story is the fact that although the app may appear to be any other
run-of-the-mill disruptive startup, it was created by an incumbent that decided to use a new tool (Tinder)
to break into a market he has not been able to reach with its established brands. Therefore, the
incumbent let Tinder disrupt its core brands, to unlock additional value and comfort its leading position.
The incumbent in question is InterActivecorp (IAC), (the owner of dating sites like Match.com and
OkCupid) through an incubator by the name Hatch Labs. Tinder is evidence of an incumbent not shying
away from disruption. IAC’s move to invest in Tinder was calculated; they knew that doing so would take
focus away from their existing services. But in doing so, IAC managed to protect their market leadership
from a competitor coming in and offering the same experience.

Tinder and the Drama of Missed Opportunities

On the other hand, other players failed to be ambidextrous and missed the opportunity to develop a
dating app that could disrupt the market. Indeed, when you saw Facebook’s influence in 2012, it is not
irrelevant to wonder why Facebook did not jump on such a promising market? Indeed, one of the reasons
that enabled Tinder’s success was its access to Facebook users’ data to predict matches (Au-Yeung,
2019).

The first explanation for such a missed opportunity is that Facebook core customers (the advertisers)
asked for visibility towards users rather than dating features (Gapper, 2022). The acquisition of Instagram
for $1bn in 2012 to strengthen Facebook’s dominant position over the social network landscape highlights
such a strategy. Another reason was the shareholders’ pressure to generate revenue. Indeed, following a
failed IPO, owners increased pressure on Facebook’s shoulder to show revenue initiatives (Greenfield,
2012). Therefore, Facebook has not been able to open up new value trajectories such as dating functions
that Facebook would later launch in 2019.

Generations of Technology

Taking into consideration that Tinder has been able to succeed and rise at entry by disrupting the market
through breaking into the younger generation market. It is now interesting to analyse how Tinder been
able to keep and strengthen this leadership position over the years.
​Generations of technology used in online dating can be appropriately divided into three main stages, the
key criterias for such a division are the complexity of the technology, the target audience and how the
proposed technology correlates with users' demand for a particular user experience.

Generation №1:

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This stage includes creation and development of the technology of websites for online dating. At the same
time, the partner selection algorithm itself is not new and only digitises the existing methods for searching
for compatibility between potential partners. Such methods were taken from economic and sociological
algorithms, created mainly in the second half of the 20th century as a new "scientific" vision of what it is in
two strangers that can indicate their compatibility and the likelihood of their long-term relationship
(Strimpel, 2020).

The technology is based on user surveys, which prevailed in the industry as the main method of finding
matches during the entire 1st generation of the technology. The survey provides a series of questions,
including formal (age, height, gender, occupation) and advanced (views on life, religious and political
views, expectations from a potential partner). Users' answers are compared with each other and work in a
mirror way, in cases where a certain percentage of matches is reached, users are offered to each other
as the most suitable options (Abolfathi & Santamaria, 2020).

At the same time, the questions from the questionnaires have a gradation in importance, which is
determined by how often the answer to this particular question affects the success of the relationship. The
ranking by importance creates a factor by which the score for matching a question is multiplied. Upon
reaching a sufficient number of points for a general match, the site offers to view the user's profile
(Abolfathi & Santamaria, 2020). Then the user independently carries out a visual assessment of a
potential partner and decides to start communication.

Despite the seemingly scientific validity of the influence of the coincidence of the views of the respondents
on the likelihood of a long-term relationship, so far it has not been proven that there is a correlation
between matches on dating websites and the actual duration of the relationship.

Target audience: single individuals aged 35 years and above who know how to use a computer. Initially,
the technology wanted to reach younger populations, but was unable to attract them due to the excessive
formality of the partner selection process (Abolfathi & Santamaria, 2020). Online dating based on the
technologies of this generation has quickly become associated with a last resort for those who did not
succeed in real life.

Generation №2:

The 2nd generation of technology begins with the appearance of an application that disrupted the market.
Tinder appeared in 2012 and was initially perceived as a new product, different from the existing online
dating product. New online dating technology is redefining the user experience of dating and expanding
the audience.

Tinder's technology focuses on the visual assessment of potential relationship partners and delegates this
assessment to the user. Initially, the algorithm works simply as a sorter of user profiles according to
several formal criteria: gender, age, and geolocation. The focus on geolocation is also an innovation of
Tinder and a fulcrum of a new generation of technologies, the updated dating does not try to analyze the
compatibility of potential partners on its own but helps to find them in such an environment in which users
could quickly move from online communication to live communication (Kaitlyn Tiffany, 2019).

Once the user base is built up, this generation of technology comes into play with a rating system that is
very similar to the system for assessing the skill level of chess players in professional sports, only instead
of wins and losses on the chessboard, it is how many times the user has been swiped to the right. The
rating system awarded points to specific users and sorted them according to the level of attractiveness to

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others, as a result of this sorting, the application offers users options from their “group” (Maruti Techlabs,
2018).

Side note: Tinder has not officially recognized the existence of a user rating system based on how
attractive they are to others.

Generation №3:

At this stage, inspired by the success of Tinder, competitors present their vision for updated online dating.
Hinge presents a more complex technology in terms of user experience but justifies this by saying that
they target people who are interested in a serious relationship. That is why in Hinge we see a simplified
analogue of a questionnaire and a focus on the preferences expressed by the user. It is still based on the
user's visual evaluation of potential partners, but Hinge pre-sorts such partners according to the user's
preferences. The algorithm selects users with similar preferences, but its selectivity is still dependent on
how large the choice is in a particular geographic range.

Bumble's technology largely copies Tinder's technology but introduces a key feature in the form of
"female choice". Thus, Bumble offers an interesting alternative to the generally accepted concept of male
initiative in dating. In case of a match, a man cannot write to the girl first, only the girl can do this. It is this
feature that attracts users in the initial stages. The algorithm at the initial stages works on the same
principle as Tinder algorithm (geolocation and popularity) (Alter, 2015)

Current development is about sustainable innovations, companies are developing the accuracy of their
algorithms and testing their advanced versions on larger groups of people. Tinder and competitors are
now working on the use of machine learning in the selection of potential partners. It is envisaged that the
algorithm, which works on machine learning, will be able to more effectively evaluate the probability of a
match and improve the quality of the user experience (Kaitlyn Tiffany, 2019).

Conclusion

Tinder's disruption of the market of online dating set a new generation of technology. However, Tinder's
technology is not a complex algorithm that was designed to revolutionise people's compatibility
assessment. Tinder, from a technological point of view, on the contrary, removes everything superfluous
and is possibly an inferior technology in relation to the algorithms of dating websites. It was this kind of
technology, along with the right offering in terms of user experience, that allowed Tinder to disrupt the
market.

CONCLUSION & MANAGERIAL LEARNINGS

Overall, Tinder targeted a new segment that was ignored by other dating companies as it was not their
core customer group. Its gamified features and simple interface ensured it was very attractive to youth.
Once it reached critical mass and due to societal trends towards a more fast-paced life and casual
hook-ups, the network effect and its user interface ensured its massive success. This was eased as
Tinder was part of Match Group Incubator. Overall, Tinder is an example of an incumbent not shying
away from innovation and disruption (IAC & Match Lab).

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The main takeaway from this success story is that: Tinder’s success was NOT about having a superior
Swipe Technology or a better offering based on a technical know-how (as many articles state), but
because of management choices on the evolution of the offering from the targeting of a non-existent
customer group to the decision of the incumbent Match Group to disrupt itself.

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