Tinder, a free mobile dating app, was launched in 2012 by Match, which also owns OKCupid, PlentyOfFish, and HowAboutWe, with the mission to increase romantic connectivity worldwide. Three years later, it is not only famous for promoting millions of hookups (a total of 10 billion matches generated by a daily average of 800 million swipes and 15 million matches[1, 2]) but also for becoming one of the most valuable social networking apps (JMP Securities predicts Tinder to be worth $1.6 billion). This is an example of company that successfully aligns its operating model with its business model – It’s a match!
An attractive business model
Tinder creates value to customers by filling a gap in the market of online dating as an app that provides affordable, local, instantaneous, and safe way to meet potential partners that are outside the user’s circle of friends. Eligible candidates provide information on their public profiles (pictures and a brief text) in return for access to the pool of profiles of potential matches, which can be filtered by distance, gender, sexual orientation and age. Successful matches unlock a chat screen that enables both users to communicate. Revenue is generated through the paid-for subscription service “Tinder Plus” and advertisements. In order to avoid obsolesce, a very common outcome for most of the online dating ventures, and keep up the momentum, Tinder is constantly changing its model and trying different features to become more customer-centric and monetize its value.
These are some of the main features of the business model:
- Subscriptions: New users can only join the app through connection with and verification of users’ Facebook account.
- Profile completion: Basic information, such as name, age, and gender, are imported from user’s Facebook account and cannot be changed. All photos displayed must first have been published on Facebook or Instagram. Information about pages “liked” on Facebook are also recorded.
- Common interests: Users can see whether they share common Facebook connections and “liked” pages with other candidates.
- Match: Swiping, one of the main features of the app design, allows users to “like” or “pass” other users anonymously. The “double opt-in” system notifies users who liked each other’s profile about the match and allows them to chat. A new feature launched on October 1, 2015, called “Super Like” allows users to notify other users, with a limited frequency, that there is interest .
- Monetization: Tinder monetizes their business model in two ways. First, the app introduced ad campaigns displayed in the format of users’ profiles. Secondly, Tinder Plus subscriptions allow premium users willing to pay $9.99 monthly to change their location, use “Super Likes” without limits, rewind last swipes, and turn off ads.
Swiping right to the best operating model
Tinder delivers value to customers by maximizing their chances to make meaningful matches. The key characteristics to fulfil the customer promise are the following:
- Database: Tinder outsources its database management to focus on the product itself . This is a good strategy for a company with fewer than 100 employees and that is constantly improving the app in a growing market.
- Network: As the largest mobile dating app, with more than 250 million active users , Tinder benefits from network effect and is able to offer its users the option to connect with the greatest variety of potential matches.
- Culture: Tinder’s culture fosters close and personal relationship among its employees, a right choice given the nature of their product and the desire of their users. Sexism, more common in the tech industry, is addressed by the company .
- Credibility: Unlike other previous online dating alternatives, Tinder integrated with Facebook and verified the identity of each of its users on the social network. This partnership allowed the company to build its brand and gain recognition as a safe, trusted and respectful application. By requiring users to share information about their network connections and “likes” the app fostered a culture of transparency and more authenticity.
- User-friendliness: Tinder’s instant profile completion using Facebook and its intuitive and simple interface amplify the network effect of the app and increase the likelihood of success for each user.
- Customer-Centric: The company is constantly changing the app to test new options to increase users’ satisfaction.
- Advertisement: Ads are presented in the same format of users’ profiles and can be “swiped left” easily and fast.