Tinder is a mobile dating app founded in September, 2012 out of the Hatch Labs of IAC, its parent company.  In the app, users are presented with potential dates in the nearby location. After viewing a profile the user can either swipe left or right, dismissing or accepting the potential partner. If both users swipe right, the two people are “matched” together and can start a dialog in the in-house chatting application.
Tinder has grown tremendously since its launch, gaining initial traction of over a half million monthly active users within the first six months.  By December 2014, the app had been downloaded more than 40 million times with users swiping 1 billion times per day.  By late 2014, Tinder had reached 17 million monthly active users, and in a report published in 2015, it estimated to reach 58 million by the end of the following year.
The online dating industry is an extremely competitive market with low capital investment, strong network effects, and high level of user multi-homing. While the number of entrants has increased throughout the past five years, the industry continues to consolidate . Faced with strong network effects, Tinder had to gain traction fast to succeed. As the multi-homing cost for end user is low, since the apps are often offered for free, most users have multiple apps installed on their phone. Each dating app not only has to fight for a large initial user base, but also for end user attention on a daily, even hourly basis. So how does Tinder do it?
- Product differentiation: Tinder created early traction through a superior user experience (UX) emphasizing simplicity and gamification.
- UX design for mobile screen: Presenting potential date’s profile on a card with a simple design provides more screen real estate that is easier to use than a screen filled with navigation options.
- Swipe left/ right: Accepting or declining a potential match through swiping left or right is simple and addicting. It’s very intuitive for mobile users, and it’s easy to operate with just one hand.
- Psychology: Presenting potential dates in a deck of card creates the urge to see who would be the next in the deck. And users would want to swipe until hitting a match. It therefore become a habit. When users are bored, its easy to open the app to check out new possible dates. Creating addiction is an essential part for Tinder to win in an environment with intense multi-homing. Average time spent per user on Tinder in Jun 2016 is 30 minutes. 
- Gaining Critical Mass: Tinder had over a half million monthly active users within the first six months of launch due to its laser focus on acquiring their targeted customer. 
- Focused on sororities and fraternities: Tinder grew its user base “college by college” in the first year like Facebook, but it took a step further to focus within college sub-communities- sororities and fraternities to maximize their existing dense network and strong word-of-mouth culture in the community. 
- Supply first: In many dating ecosystems, the “supply” of women on a platform is what triggers the participation of men, the same principle behind “Ladies night” at clubs. Tinder focused on sorority girls as early adopters, doing presentations on campus, throwing launch parties, and spreading word of mouth. As more women joined the platform, men followed.
- Getting rid of social stigma: Getting campus VIPs on board, including presidents of sororities, celebutantes, models, and other “attractive initial users”, neutralized the potential risk for social stigma in using the app.
There are other factors that helped with the initial success, including easy account creation; users could sign up within seconds by directly linking their Facebook profiles to create Tinder profiles. Another attractive feature for the user is that you can only message your match, eliminating thousands of irrelevant messages from random people like on other dating apps, such as OKCupid.
- New features to keep the user engaged: Tinder continuously tested new features in the app, including Super Like, which lets users alert a potential match of interest before they swipe , Smart Photo algorithm, shuffling user’s pictures based on performances , and “Tinder Social”, a friend finding feature.
- Advertisement: Tinder has provided a creative platform for advertisers to target and interact with end user in a non-intrusive way. It has launched some very successful campaigns, including NYC Puppy Rescue Project, matching ten abandoned and adoptable puppies with their future best friends, Bud Light, matching consumer to enter promotional events, The Mindy Project, matching with favorite characters.
- Subscription: Tinder Plus is a premium service that charged $9.99 per month for extra features like rewind- returning to a profile one has accidently dismissed, choosing a flexible location, and unlimited swipes. Tinder Boost is another paid feature that helps users be more prominently featured to others. Tinder ended the fourth quarter of 2016 with more than 1.7 million paid subscribers, more than double the amount of members it had at the end of 2015.
- International expansion: Tinder’s largest international markets were Brazil and the United Kingdom, each of which was growing at around 2% per day. Tinder has a potential to expand in the international market; they are focusing on countries like Brazil, India, and Turkey. 
While Tinder has had great success building up its user base, maximizing network effects, and effectively winning in the context of multi-homing, it’s also facing new competitors offering differentiated, more targeted niche services, including Hinge, Coffee Meets Bagel, Bumble, and the League. These apps are emphasizing Tinder’s hook-up image and its increasingly massive user base that led to lower quality matches to position themselves each as the next best dating app . Is Tinder suffering from an adverse network effect, where the user base has become too big to be relevant to the individuals? Moving forward, Tinder needs to think about how to continue to grow while staying relevant in the online dating world.
 IBIS World Report 81299A Dating Services in the US Industry Report