Match’s Mandy Ginsberg on the importance of innovation
Match Group, the online dating expert behind sites like Match.com and Tinder, is renowned as an innovator. Now, the company’s CEO, Mandy Ginsberg, has written a piece for the Harvard Business Review on the importance of this quality in a fast-changing industry. The article offers not just a recap of useful business strategy for other businesses, but an inside view as to how Match was able to become such a dominant player in its space, and connect couples around the world.
Match Group’s share price has appreciated by an incredible 65% so far this year!
Source: Yahoo Finance
Describing the sea-change that has overtaken the online dating world over the twelve years she’s been at Match, Ginsberg says that the old-fashioned methods of scouring the net – going on to a dating site and just browsing an un-curated list of other users – seems bizarre today. She continues:
“If you describe that process to a 25-year-old Tinder or Hinge user today, it sounds as antiquated as fax machines. Over the past decade, significant industrywide shifts in technology and business models have occurred—the biggest one being mobile. They have completely changed the way people use our products, which now run almost entirely via apps and smartphones.”
She added that, as the stigma around online dating has evaporated, the number of married couples who meet over the internet has increased by more than tenfold. Now, as many as 35% of all marriages in the US start as online relationships.
Ginsberg describes two shifts that initially hurt Match, but would later prove to be its saviour. The first was a shift away from subscription models and towards ad revenue. Initially, OkCupid and Plenty of Fish pioneered this business model, attracting users “who were interested in online dating but reluctant to pay for it.” And the second shift was the use of algorithms to curate users: suddenly, you weren’t trawling through unsuitable people looking for Mr or Miss Right, the platforms themselves were showing you lists of users that might be more compatible with you.
A big part of Match’s early success came from simple good business: it outcompeted the upstarts, beating them at their own business models, and ultimately acquiring most of them. The second part, which is a direct knock-on of the first, was that now Match had multiple platforms. As a result, it could understand and cater to the different types of relationship people were looking for. And that’s how it found Tinder.
Tinder revolutionised Match’s business from the get-go. Ginsberg says: “Tinder introduced its product at a number of universities. It went viral among college students, and we never imagined how fast it would grow. Before Tinder, relatively few people under 30 used online dating. Today Tinder has tens of millions of users, and the majority of them are between 18 and 25. Young people who use it tend to also use two or three other dating apps, which makes our strategy of owning a portfolio of brands even stronger.”
With an evolving portfolio, still spearheaded by Tinder, which has innovated itself – now with premium features as well as a freemium model – Match Group is in pole position in the online dating world. Given its current trajectory – both in business and on the market – it looks like a strong candidate for staying there.
Dominion holds Match Group in its Global Trends Ecommerce Fund.
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