Exploitive Platforms: How Tinder Exploits Lonely Men to Make MASSIVE Profits
Tinder is a matching platform that helps strangers within a reasonable geographic radius to meet and to converse if both users express interest. The platform makes gigantic profits by exploiting lonely men who pay outrageous asymmetric prices for premium features/services that barely help their prospects based on empirical evidence. This blog post explores the dark side of platforms.
As a long time user (Read: Forever Alone Engineer :P) of dating apps, I’ve always been fascinated by how they worked. Tinder, the market leader, and other dating apps like Bumble (my personal favorite), Hinge, POF, The League, etc. act as matching platforms, connecting consenting users to converse over the platform. I will focus my attention on Tinder specifically for the purposes of this blog post, but rest assured, many of these insights are broadly applicable to the dating app marketplace. Tinder has completely changed dating marketplace dynamics. As I did a little bit of digging and exposed the dark truth, my views have completely changed.
What I once saw as fun app to pass time and a potential way to meet the person I hope to spend the rest of my life with, I now see as an exploitive platform that preys on the insecurities of men, and undermines that dating culture hurting both genders. Before I spit my written rhetorical righteous rage and cultural commentary (note the alliteration :)) that motivated this blog allow me to cover some of the basics.
How Tinder Works:
Swipe Left. Swipe Right. Sometimes you even Swipe Up. Tinder is a dating app, and digital matching platform that connects two mutually consenting users of any gender/sex, within a selected geographic search radius up to 100miles/161km. A user swipes right to indicate interest or left to move on to a new profile. Tinder operates on a freemium subscription model. Free users have 100 free right swipes per day, before running out for the remainder of the 24hr period and are given one Super Swipe or Up Swipe per day which allegedly triples the odds of a match. Tinder has released numerous features, like Boosts which bump your profile to the top of the queue for currently active users, and premium services like, Tinder Plus, Tinder Gold and Tinder Platinum, which offer varying levels of allegedly value added service to increase a user’s odds of success, for a price.
How Tinder Creates and Captures Value:
Tinder creates values for it’s users by acting as a virtual bar room. Rather than needing to be in the same place, at the same time, like in the dating days of old, at a bar for example, Tinder enables you to connect with people whom you find attractive/desirable, and who have also expressed interest in you (both individuals right swipe= a match). Tinder captures economic value by selling premium features and services to “help” their users get more matches. For example, Figure 1 below shows the pricing that I see on my app as a 29-year old male user.
Figure 1- Tinder Plus, Tinder Gold, Super like and Boost Pricing.
Tinder has supply/demand issue as a matching platform because over 78% of users are male [2]. They attempt to follow the same playbook as Las Vegas nightclubs by pricing features and services at lower rates for female users [1]. This hasn’t stopped Tinder’s success at all, with its paid user growth increasing steadily over the years as seen in Figure 2. In fact Tinder is WILDLY successful as one of the highest grossing app on IOS in 2018, as seen in Figure 3 , and grossed over $1.2B in 2020 alone across all operating systems, with an astonishing 40% gross margin [3].
Figure 2- Tinder Paid Subscriber Growth Over Time [4].
Figure 3- Highest Grossing Applications on IOS in 2018
Scalability, Sustainability and Features of Dating Application Platforms:
Dating applications, like social media, have VERY strong network effects. You want to be on the dating app that has the greatest number of users to maximize your opportunities to meet someone. This is where Tinder really shines. Tinder was first to market for heterosexual people (Grindr was first overall) and has the largest user base of any dating app as can be seen in Figure 4. However, despite the strong network effects, multi-homing is a very common phenomena since users can easily operate multiple apps at once. Hell, after a particularly bad break up, I once was on four dating apps at once (not my finest moment).
Figure 4- 2019 Dating Application Users [5]
As a digital platform, Tinder is infinitely scalable. If there are single people with smartphones, this app will thrive. Furthermore, in the disconnected and locked down era of COVID-19, it’s getting more challenging to meet people further increasing the short-term prospects of this application. The app’s growth will be sustainable, especially as younger generations’ (Gen Z I’m looking at you) social skills degrade due to the move from the physical to the digital world [7].
The Exploitation of Men (Righteous Fury Time):
Users are assigned an attractiveness score based on how many people like them. The dating apps tends towards a pareto distribution where 20% of the users get 80% of the matches as seen in Figure 5. However, users are sorted based on their attractiveness score, and thus you’re shown users who are roughly in the same league as you. Furthermore, the average male user gets one match in 115 profiles [9]. With only 100 free swipes a day, 80% males who haven’t paid for premium service will average less than a single match a day.
Figure 5- Like distribution by gender and attractiveness[9].
Tinder sells users a fantasy, a hope that maybe if they just purchase this premium feature or service maybe they will find the one. The claims about getting up seen by 10x more profile views, or up to 3x improvement in matches, when examined empirically means that many users still get almost no benefit from these features/services. The ease of use of the application to purchase said services acts as an almost gamification, that facilitates the microtransactions that create the app’s wild profitability. The app explicitly and almost exclusively preys on lonely men. What’s worse is the 20% of users who get all the matches (myself included), get most of the matches, thus creating a dating culture where people are disposable because there’s always another match waiting. This is the grim reality that the Tinder platform has created. Don’t waste your money on dating apps.
Sources:
[1] Campbell, Patrick. 2021. “Why Tinder’s Charging Older Users More, And Why It Makes Perfect Sense”. Priceintelligently.Com. https://www.priceintelligently.com/blog/why-tinders-charging-older-users-more-and-why-it-makes-perfect-sense#:~:text=But%20this%20much%20anticipated%20launch,paying%20upwards%20of%20%2419.99%2Fmonth.
[2] “U.S. Tinder User Ratio By Gender 2020 | Statista”. 2021. Statista. https://www.statista.com/statistics/975925/us-tinder-user-ratio-gender/.
[3] “Tinder Made $1.2 Billion Last Year Off People Who Can’T Stop Swiping”. 2021. The Verge. https://www.theverge.com/2020/2/4/21123057/tinder-1-billion-dollars-match-group-revenue-earnings.
[4]”Tinder Paid Dating Subscribers 2020 | Statista”. 2021. Statista. https://www.statista.com/statistics/992916/paid-dating-subscribers-tinder/.
[5]”U.S. Dating Apps By Audience Size 2019 | Statista”. 2021. Statista. https://www.statista.com/statistics/826778/most-popular-dating-apps-by-audience-size-usa/.
[6] “Tinder Revenue And Usage Statistics (2020)”. 2021. Business Of Apps. https://www.businessofapps.com/data/tinder-statistics/.
[7] 2021. Usatoday.Com. https://www.usatoday.com/story/opinion/2018/05/03/gen-z-loneliest-generation-social-media-personal-interactions-column/574701002/.
[8] Bartlett, Matt. 2021. “How Tinder’S Algorithm Is Micromanaging Your Dating Life”. The Spinoff. https://thespinoff.co.nz/tech/18-07-2020/how-tinders-algorithm-is-micromanaging-your-dating-life/#:~:text=Users%20are%20then%20sorted%20into,of%20attractiveness%20when%20you%20swipe.
[9] “Tinder Experiments II: Guys, Unless You Are Really Hot You Are Probably Better Off Not Wasting Your…”. 2021. Medium. https://medium.com/@worstonlinedater/tinder-experiments-ii-guys-unless-you-are-really-hot-you-are-probably-better-off-not-wasting-your-2ddf370a6e9a#id_token=eyJhbGciOiJSUzI1NiIsImtpZCI6ImZlZDgwZmVjNTZkYjk5MjMzZDRiNGY2MGZiYWZkYmFlYjkxODZjNzMiLCJ0eXAiOiJKV1QifQ.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.fZaDMUkk-xJxUC-c5DNIffWfk1CGsbcVc6XDPwOwftEkHYMoVx57YOva6dCzNQ0_yNAxb85SbWaoL5XGWojNRzkGpfc4y4EaaFBAoE4DWjy1hiGxuNZX7LhN_don0DKJ7-4wto01ZpaoBU5Btt9aibCd1N2HEKlFn0PeJi0jYoOkEZ8kK_T8Z6VZkNecfnj-prkfsehUOBEf_z1QdTRSv-ZMGdy4CAwvlNmT6yVfskQmQPsEkfvvScctirzN7x1YO793s5VPuqJsgHfgRQUjhqv57Pqdz1DZBrIGtlQgiNFjcYcGlwVR8rNGdlvGpipFIAxFwZIJta6Ecc8OplRJ2g.
As I read your breakdown of the economics and science behind Tinder’s business model, I have grown very curious as to how competing app’s economics work. My guess is not that different, and if for some reason they were, I wonder if it significantly helps or deters them from competing against Tinder. Great post Omar.
Fun fact, almost all dating apps outside of Bumble are under the same ownership, the Match Group. You’re absolutely right though, these app generally extract their value from males who don’t get a lot of success on these apps.
Amazing post Omar. I think this matching algorithm that, as you clearly mentioned, preys on men could finally also be their downfall. Loneliness is a great driver for their business. But the 80% of their users not getting matches could also be driven off their platform to something else that comes along that is slightly less discriminatory. Assuming that these are where most of their paying users come from, this could potentially prove to be a serious problem. Especially when coupled with the branding issues that they are having and the now prevalent ads on the platform.
While, I would hope that there would be a mass exodus from Tinder, the reality is the primary users are 18-25 (Gen Z) who are notorious for having issues meeting people. They go on less dates, have less sex, drink less, etc. and thus I sense will become even more reliant on platforms like Tinder.
Amazing take on the platform! Their monetization power is huge. I loved the data-driven way you were able to explain the reasoning for the initial claim. From a purely cynical view, their business model relies on people continuing to use the platform. If you find the one, you will uninstall the app.
Yup. The deeper point I was making was that guys are plowing dozens if not hundreds of dollars on features/services that empirically provide almost no value. Tinder is basically a snake oil salesmen who’s product gives you worse that casino odds of success.
Fascinating analysis Omar! I’d be curious to know if Tinder is changing its strategy in the face of strong competition from other dating apps (specifically Bumble) and if it is branching out into other segments such as Bumble BFF.
I’m fairly certain, given their success, they don’t need a change in strategy. They’re generating huge revenues, stable growth and fat profits. Bumble’s branching out may not necessarily pan out for them.
This is great, Omar. Your post is very well-written and fun to read! I wonder if there’s a way these platforms could use all this data to actually help people to find lasting romantic partners. There must be many insights about matching characteristics and personalities that might help people to find a soul mate in the platform. But, as Bruno said in an early comment, this is not in the best interest of the company, at least not as long as Tinder has this business model.
Yeah, I believe a different Match Group product (the match group owns most dating apps), Match, does exactly that by asking users a bunch of questions to get to know them and assigning combability percentages among users. It exists, but it’s more work and thus has lower adoption.
Insightful and well-written post, Omar! I did not know that 78% of users were male (although that doesn’t really surprise me). But given that it is a known fact, I am truly wondering why Tinder is not doubling down its efforts to grow the female population, and not just by using monetary incentives. They could for instance introduce a Bumble-like feature or some options to filter undesirable profiles to improve the reliability of the platform. Everyone would benefit from that: lonely men would feel less “exploited”, Tinder could leverage its more female-friendly approach in their marketing strategy, and women would feel safer using the product (thereby potentially increasing retention and decreasing multi-homing).
But maybe I’m just being to naive here… (I’m not completely familiar with these apps) 😀
No no, I think you’re onto something. I do think they should try to solicit more female customers, but there are cultural and reputational roadblocks (Read: Misbehaved males). I’d like to see tinder be more honest about the actually benefit of its features as I believe they mislead their customers.
Great post, Omar!
And I really like the irony and the alliteration of the introduction 🙂
In your opinion, which are Tinders’s competitive advantages versus the other dating apps such as Bumble, The League etc?
I think Tinder’s competitive advantage is its size/scale and it’s name recognition. It kind of has a notorious hook up reputation at this point, but the fact that it is profitable certainly means they can continue to innovate and create new features/services.