How Tinder Became the Highest Grossing App With a $3+ Billion Valuation

Discover how Tinder achieved an explosive growth in popularity soon after the app's release and how it went on to become the highest grossing app.

If you've been part of the dating scene within the last couple of years, you don't need me to explain what Tinder is.

Come to think of it, you've probably seen or at least heard of it regardless of your dating activity.

Since it launched in 2012, the Tinder app has become a phenomenon.

Users of the app make millions of Tinder swipes and matches per day.

In fact, the dating application has generated over a billion matches since it was created.

The app has become so popular that to "swipe right" on someone or something has come to mean to accept or like that person or thing.

By 2017, Tinder had become the top-grossing app in the Apple store for the first time, putting it ahead of other giant apps like Pandora and Netflix.

Tinder's rise to the top actually came after it rolled out its premium "Tinder Gold" membership to monetize its huge and ever-growing user base.

It's human nature to crave affection and to search for someone else to connect to or build a relationship with, and the technology of recent years has helped facilitate that.

The online dating industry's total revenue amounts to over $1.3 billion per year, and Tinder has claimed a significant portion of that market.

While I can't tell you how to best call off your Tinder relationship, I can give you a quick explanation on what the team behind the app has done to make it the breakthrough success that it is.

Are you looking to build and launch your own app?

Do you wish it could experience the same meteoric rise as Tinder?

If so, there are many critical lessons you can take away from their story.

How Does Tinder Work?

This dating app is a convenient way to meet people

Users swipe right if they like what they see, or swipe left if they don't.

That's the main premise behind Tinder.

People who both swipe right on each other are matched and receive a prompt to either send a message or keep playing.

Unlike other more traditional dating websites, there is no long biography and list of questions about yourself to answer.

Tinder links to your Facebook and pulls your data such as your age, name, mutual friends, and interests.

You can even link your Instagram account to your Tinder profile.

2018 Americans Who Use Tinder

This makes importing your profile information into Tinder a mostly automatic process.

It also helps verify that you're a real person.

You can get signed up for Tinder quickly, and then open it up for a short burst of swipes any time you're on the go.

You also can add a short blurb about yourself to your profile and import a few extra photos if you wish.

Either way, you're all set up with the app within a couple of minutes after installing it.

While the app has plenty that it offers its users for free, it also has paid in-app purchases including Tinder Plus and Tinder Gold memberships.

In the wake of its success, Tinder has some received a host of criticisms against it such as the view that it's nothing more than a hook-up app that promotes a shallow or lazy attitude towards relationships and intimacy.

In truth, it's just more suited for the millennial generation who wants to get things done quickly and efficiently.

For those with busy lives and careers, Tinder is an excellent way to connect.

It puts you in touch with a considerable number of potential partners in a short amount of time.

Dating Changes

Dating wasn't always this easy; recent changes make it simpler than ever

Okay, maybe this is showing my age, but I've never used Tinder myself.

In fact, online dating wasn't really a thing when I met my wife the old-fashioned way.

When we first met, my business was just starting to get off the ground, and we were both working full-time.

My soon-to-be wife was also attending undergrad courses in law school.

We were first introduced to each other through a mutual friend and the first time that we met up was for a lunch date.

This was how dating used to work.

That was before websites and apps helped break down the barriers to new relationships.

Back then, you either had to know someone to introduce you or strike up a conversation with a stranger.

This meant approaching someone without any sign of how compatible you may be for each other.

It was a lot of trial and error.

I was lucky enough to find the partner of my dreams.

But, I must admit that if Tinder were around in my younger days, I probably would have taken advantage of it!

Tinder's Start

An application that lit a fire in our hearts and the mobile store charts

The app was born in 2012 through the work of founders Sean Rad, Justin Mateen, and Jonathan Badeen.

They received funding and support from the mobile application firm Hatch Labs.

The name tinder came from the idea of starting a fire or setting a spark for potential romantic relationships.

The idea paid off, as the app spread like wildfire.

The founders considered other alternative names like Matchbox, but only Tinder made the final cut.

Within a year of the app's release, it was such a success that the three founders found themselves on the Forbes 30 under 30—an annual list of the year's brightest young entrepreneurs, stars, and leaders put out by Forbes Magazine.

In the beginning, Tinder was meant to be more of a game that you'd want to play even if you weren't looking for a date.

Its design was largely inspired by a deck of playing cards.

It also draws from previous "hot or not" style applications and websites that came before it.

The app's creators want Tinder to eventually evolve beyond the romantic context.

They envision it becoming more of a social networking app so that users can interact with friends and use it for other purposes.

The company has already acquired other mobile apps such as Tappy.

We believe this indicates an interest in developing a more robust messaging system for Tinder in the future.

If done well, it could greatly expand the apps target market and purpose for users.

Digging Deeper

The strategies that made Tinder's initial popularity explode and led to its amazing success

The world is full of heavily-funded apps.

Some of them become sensations for a short period of time then seem to die out.

Others, like Tinder, are still thriving after more than five years.

Oftentimes, luck and bringing your product to market at the right time play the biggest part in an app's success.

However, there is also a lot that companies can do to tip the odds in their favor.

Tinder made a number of key decisions that may have spelled the difference between success and failure.

These decisions were especially important during its launch and the early days of their operations.

Let's further dissect what fast-tracked Tinder's rise to the top despite all the competitions and obstacles that it faced.

Key Differences

Tinder Became the Highest Grossing App by Doing Three Key Things

Although arguably there are many factors that contributed to Tinder's huge success, there are a few things that really set them apart:

  • They focused on organic growth
  • They made the app super easy to use
  • They jumped on new monetization strategies

Let's take a further look at how they did each of these things so well.

Organic Growth Engine

Tinder opted to rely on word of mouth and key influencers to promote their app instead of resorting to paid advertising

Word of mouth. Like most startup companies, the Tinder team was on a tight budget.

They focused almost exclusively on word of mouth to provide growth for their then-unknown app.

The sheer number of people talking about the app helped it reach the critical mass required for it to gain momentum and take a share of the market.

Unlike other tech startups, however, Tinder didn't make use of Facebook Ads.

They also chose not to use the mass email lists of college and university students that people offered to them.

They wanted Tinder users who downloaded the app because a friend had a great experience and told them about it.

This decision to eschew conventional advertising strategies in favor of organic, word-of-mouth growth would help them acquire their preferred type of users who would later become the lifeblood of the app.

Survey: How Often Do You Use Dating Websites Or Apps?

In fact, the one time that Tinder tried to market through paid advertising to a Turkish audience, it failed miserably.

They didn't get the quality of users they were able to attract organically.

Key influencers. Tinder targeted key influencers to fuel their organic growth further.

The creators of Tinder chose not to mass market the app to everyone with access to the Internet.

Instead, they focused on targeting smaller communities.

For example, the collegiate Greek system played a pivotal, dual role in Tinder's growth.

It wasn't just a group of Tinder's ideal users that it could grow its user base with.

Their existing network allowed news of the app to spread.

This led to an increase in the number of people using it in a specific geographic area rather quickly.

This was critical, as Tinder would quickly turn potential users away without a significant user base in the area.

Once a couple of sororities began using the app, word of mouth between the sorority and fraternity houses of that campus would take over.

This instantaneously increased the availability of potential matches for users in that area.

After Tinder had gained traction in a specific market, they would then go on to target famous people and celebrities.

It allowed them to mimic the growth pattern seen in college campuses except on a larger scale.

This strategy of targeting key influencers helped them grow quickly. It allowed them to create self-sustaining networks before introducing Tinder to other demographics.

Simple, Intuitive User Experience

The way that Tinder was built has everything to do with how it caught fire

Navigating through potential matches is as easy as users swiping left or right, which is an incredibly intuitive design.

It also carried a gamification component; something that had the immense power to get users to keep coming back.

Making Tinder into more of a dating game as opposed to a serious and formal matchmaking process ensures users enjoy a light and fun experience.

Tinder also leveraged platform integration to make it easy and quick to sign up.

Most dating services require users to fill out long applications or forms to be able to use the service.

The app's creators noticed that a lot of people would abandon the signup process before even completing this initial stage.

Tinder integrated with Facebook so that signup can be as easy as the click of one button.

While most users may not be willing to spend 15-20 minutes to fill out an application, they are far more likely to take a few seconds to try out the app if the sign-up process was that hassle-free.

Monetization

Tinder excels at converting loyal users into a revenue stream

The average American spends 5.6% (or an average of $2,827) of their annual expenditures on entertainment.

This figure increasingly includes in-app purchases on their smartphones.

Tinder has always been free to download, but the dating app started monetizing a couple of years ago with in-app purchases and advertising.

Today around a quarter of users are paying for online dating services.

You would think that by adding a paywall to your service, you might see a drop in the number of users.

However, Tinder actually surged to the top of Apple and Android store charts after Tinder Gold became available globally on August 29, 2017.

Tinder Gold isn't the most popular in-app purchase that users of the app make.

In fact, it ranks 10th for Tinder users.

It comes in after Super Likes, boosts, other standalone abilities and the different tiers of Tinder Plus.

In the words of the Tinder team themselves:

That's why we created Tinder Gold, a members-only service, offering our most exclusive features: Passport, Rewind, Unlimited Likes, five Super Likes per day, one Boost per month, and more profile controls—as well as our new Likes You feature, so that you can see who likes you before you swipe. Think of it as your personal Swipe Right concierge—available 24/7—bringing all of your pending matches to you. Now you can sit back, enjoy a fine cocktail, and browse through profiles at your leisure.

The Tinder Plus and Tinder Gold services give users more freedom and value-added services when using the app, including:

Unlimited swipes. Tinder's free version limits how many profiles you can swipe per day.

This is probably the biggest selling point for users to take out their credit cards.

Location change. If you're heading somewhere on in the near future, you can start finding dates in that area before you arrive.

Boosts. These temporarily get your profile closer to the top of everyone's photo stack in your area.

Rewind. If you're a premium member, you can go back if you accidentally swiped the wrong way on someone.

This lets you avoid missed connections or embarrassingly swiping on your friend's sibling.

Key Lessons

Here's our advice on how to make your app or company as successful as Tinder

There is a lot to take away from the Tinder story whether you're planning to launch your own app or start any kind of online business.

Take advantage of the lessons behind Tinder's successes as well as the struggles they encountered.

This can help you avoid having to learn through personal experience, using your own time and money.

Here are some of the main insights to take away:

  1. Lesson #1: User experience is EVERYTHING.

    Today's world is extremely fast-paced.

    People don't have time for lengthy sign-ups or any kind of friction when they're interacting with your product.

    If you don't provide absolute ease of use, your users are likely to simply abandon your product for something more user-friendly.

    This is especially important for an app like Tinder that requires a large number of users for its ecosystem to thrive.

  2. Lesson #2: Don't underestimate the explosive power of word of mouth.

    Nowadays it's almost assumed that businesses have to always pay to play.

    Sometimes that's not the best move and can actually be counterproductive.

    A strategic organic growth engine can easily be 10x more powerful than paid advertising.

    There is a stigma in today's marketplace against using free traffic or word of mouth.

    It's seen as being less effective and requiring more time or resources to obtain the same result as paid traffic.

    Tinder proved that nothing could be further from the truth.

    No matter what product or service you're about to launch, it's worth considering a trial run where your only advertisement is by word of mouth.

    It could save you from huge investments in expensive ad campaigns.

  3. Lesson #3: There's nothing micro about the power of micro-influencers.

    Micro-influencers are everyday people with a small to medium sized following on Facebook, Instagram, or other social media platforms.

    Most Popular Social Networks Worldwide

    They have a very direct and personal connection with members of their audience and interact with them directly in most cases.

    The spread of information has become more dispersed than ever.

    Many younger people are choosing to get their news and opinions from social media sites like Youtube and Facebook.

    They're not paying attention to mainstream or conventional news sources.

    A single social media personality can now reach more people than an average television broadcast.

    Thanks to the viral nature of the internet, all it takes is a single click.

    These influencers are often brand advocates or industry experts.

    They have a niche audience that they hold massive sway and influence over.

    Tinder's growth from the onset entirely hinged on micro-influencers.

    In their case, these were small college networks such as fraternities and sororities.

    If your product or service is something that you feel people will love, put it into the hands of a micro-influencer.

    The chances are that you will quickly see its popularity rise.

    A micro-influencer spreading your company's message will drastically boost word-of-mouth advertising.

    It can be well worth it, even if you need to offer them your product for free or do a paid promotion.

  4. Lesson #4: Focus on monetizing your current audience as opposed to scouting for new audiences.

    Determining the best way to monetize your audience as a business can be just as tricky as tackling of personal finances in a relationship.

    Entrepreneurs will often focus on scaling and growing their audience.

    An alternative is to find creative and meaningful ways to monetize the base they already have.

    For Tinder, it merely took adding another high-touch tier of service for their existing customers to upgrade to.

    The company also expanded gradually. This ensured it was dominating a specific geographic area before expanding out further.

    This tactic can avoid the risk of stretching yourself too thin.

    This same strategy has been successfully used by other apps such as Uber as well.

Still want more information about how Tinder did it? If you want to glean some additional insights and lessons from Tinder, Business Insider did a great podcast with Tinder CEO Sean Rad.

In it, he discusses some of the marketing tricks that he used to speed up Tinder's rapid increase in popularity.

Potential Privacy Concerns

Privacy is increasingly becoming a concern for users of all web-based apps and platforms

All of the recent Facebook news has shown us that websites and apps are gathering large amounts of personal information.

Tinder is no exception.

The app gathers plenty of personal data about you as a user.

This includes your gender, age, interests, where you go and live, and the people you have dated or spoken to, which is used to deliver targeted advertising.

Your information and communications are generally secure.

However, it's something to consider as both a user of the app, as well as a would-be app developer who is looking to create something similar.

The public is demanding an ever-increasing level of transparency and security.

This makes it more critical than ever for companies like Tinder to ensure customer data is kept safe and secure.

A clear and easy-to-understand terms of use and privacy policy is also a must.

Conclusion

Tinder is a great example of an app done right

Tinder has become such a household name that even your uncle and grandmother probably know about it.

It's a great case study on how to successfully establish your mobile app and send it to the top of the Apple and Play Store charts.

Its ease-of-use ensures that new users are willing to give it a try instead of being deterred by a long signup process.

The company focused on organic growth instead of traditional paid advertising, and it paid off handsomely.

The use of key influencers helped speed up the word of mouth process to get their application into the hands of millions of users.

Tinder then monetized their audience with great success while still retaining an excellent base product for free.

All of these factors combined allowed the app to experience explosive growth relatively quickly.

Which one of Tinder's lessons are you going to incorporate into your next app or business project?

Let us know what you think in the comments below.


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