It's how people meet

GRENOBLE ECOLE DE MANAGEMENT- MSC. INNOVATION, STRATEGY AND ENTREPRENEURSHIP ID 142182

Abstract
The paper is dedicated to the
analysis and examination of
Tinder
from
innovation
management point of view. The
perspective adopted will define
how the topics encountered affect
the chosen innovation. First, the
essay will introduce the context of
the virtual dating before Tinder.
Then, the paper is going to
classify Tinder among the types of innovation explored and observe the
degree of expansion and diffusion in both economic and social contexts.
The study will investigate the source of the innovation, its origins and the
role of the users, how it spreads, the weight of the technological lockouts
and time of entry. Then there will be an analysis of Tinders business model
and its intellectual property rights.

Introduction
The technology has had huge impact on every aspect of our life, above all
how we interact with other people.
People began to use the WWW to find a partner since 1995 1. Today there
are both millions of websites and couples made up online.
The diffusion of smartphones has brought the ubiquity of connection to
1.75 billion devices owners starting the migration from online dating to
mobile dating.
After the first dating service on a mobile phone 2 and the expansion of
smartphones in 2007, the outbreak of the mobile dating apps took place.
Their portability and proximity features turned peoples daily life in a
social activity.

1 http://blog.badonlinedates.com/date-stories-jens-blog/2012/10/infographic-theevolution-of-online-dating.html
2 Proxidating was using the Bluetooth technology to connect mobile devices.
1

Dating is one of the aspect of our life the most suitable for becoming a
social activity. In fact, in 2013 7% of smartphone users had used a dating
app3.
One of the most innovative and lively dating app is Tinder 4 that, of course,
takes advantage of proximity and portability features that smartphones can
provide to the dating apps. A market valued at 1.4 billion in 20135.
Tinder is influencing and changing the entire process of dating, involving
the means, the tools, the processes, the feelings, the contexts and of course
the behaviours.
The curiosity for this app built in only 3 weeks and how it would face the
challenge to shift to a profitable business model arouse me deciding my
choice.

Definition types
Tinder is a product innovation, which according to the Oslo Manual
definition is a good or a service new or significantly improved by technical
specifications, component and materials or degree of user friendliness and
other functional characteristics6. The novelty or the changes to products
and services have to add value and benefits to the customer or meet the
market needs. Tinder does both since it combines new benefits to the
customers, that can avoid the fear of rejection and take advantage of
localization feature, with the market needs because people are
continuously seeking new way to connect each other and update their
behavioural habits with the new trends and technological tools.
Tinder is a service innovation, providing a new dating service that include a
link with Facebook - making the connections more reliable and more
comfortable because of the linkages among people who have common
friends and involving a game component - users can swipe each other
and the gathering of the matches has huge influence from a psychological
perspective. The dating service does not rely on shared interests and
hobbies anymore but it shifted to the mutual liking.
3 http://www.neomobile-blog.com/online-dating-evolution-infographic-neomobile/
4 http://www.gotinder.com/about
5 http://www.neomobile-blog.com/online-dating-evolution-infographic-neomobile/
6 the OECD Oslo Manual, 3rd edition (2005)
2

Tinder can be classified as a social innovation. It meets social needs of the

users who want to know easier new people and creates relationships based
not anymore on a likely compatibility but to physical attraction.
Accordingly, the users are able to contact each other only when they
mutually like so the reciprocal interest is stronger and deeper changing the
way to establish relationships nullifying the emotional barriers that were
making realations among people difficult. Now users can seek the dates
without the fear of refusal because the app will allow the communication
only between the matches7.
Finally, Tinder deserves to be included among disruptive innovations. It is
simple, convenient, accessible and affordable8. In fact, its ease relies on its
functionality, its convenience on the users win-win situation - they cannot
be disappointed because Tinder does not allow you to see who disliked you.
Moreover, Tinder is accessible because it is able to be possibly in the hands
of 1.75B smartphones owners. Although the dating app recently shifted to a
freemium business model, the main features are still free making it
affordable for everyone.
Tinder clearly overturned the way the relationships born. Rad and Mateen 9
wanted to address common needs. People were willing to increase the ease
of having new relationships, overthrow emotional barriers of
communication, simplify the approach and avoid the disappointment
derived by the rejection. Tinder entered in a market full of constrains. The
virtual dating led by online service has several drawbacks (less prompt
than mobile dating, higher costs, less personal and safe since the web is
perceived as unreliable) there were obstacles that people did not reach to
solve easily. They found those barriers to the consumption and provide
people for a solution to their requirements. Therefore, Tinder removes all
those barriers and transform a frustrating experience as the hunting for
dates in an ego boost activity deeply affected by the game component.
Tinder moves to the centre the users need that are one of its main sources
of disruptiveness.

7 Users who have already mutually liked each other.

8 https://www.youtube.com/watch?v=KGzXWO_anLI&feature=youtu.be
9 The two main cofounders
3

Technology performance curve

From the S-curve perspective, Tinder is in the phase where the early
adopter are beginning to
embrace those applications.
Moreover, customers are
comfortable
with
virtual
dating, they overcame the
initial phase when many
online dating services were
launched and now they have
diversified their needs served
by
new
emerging technologies. We
have not still seen the
achievement of a dominant design. We are still in the stage where people
are experimenting new virtual dating patterns and models.

The pace of Diffusion

Today Tinder, launched in September 2012, has 2 million of active users.

Mateen has contributed the most to the diffusion of tinder. In 2012, after
the app was created, following Zuckerbergs path, he went to the most
exclusive colleges and began to spread the app through the campuses,
using the feedbacks to adjust the features of the app. By 2013, the app had
400,000 users. Then, he started mailing the biggest social influencers in
LA., he said: I learned if we could penetrate social influencers first, it
would trickle down to everyone else10 engaging just the people who have
the biggest social influence they could take advantage of the bandwagon
effect11. Lately, Tinder reached the mainstream this winter due to Sochi 12,
spreading the app in the athletes parties the hook-ups caused by the
Tinders matches fuelled the buzz about the app.

Source of Innovation
Serendipity played an important role within the creation of the app. It is
likely the two founders did not know which was the direction they
undertook and the implications of what they created. While Rad and
Mateen were employed at Hatch Labs13, they were working on the idea of a
flirting app based on mutual liking system. They just wanted to overcome
some of the main typical drawbacks and fears of the offline date process
that occur to both male and female: feelings as disappointment and
embarrassment, uncomfortable situations (unwanted suitors and
consequent unfiltered requests, meetings and messages) or the habitual
uncertainty of identity of the virtual dating systems. Maybe Tinder
founders did not know what they would have cause but they knew what
they were addressing to: a market with several constrains that was looking
for who could provide a solution to its problem.

10 http://www.forbes.com/sites/stevenbertoni/2014/11/04/exclusive-sean-rad-out-astinder-ceo-inside-the-crazy-saga/3/
11 http://en.wikipedia.org/wiki/Bandwagon_effect
12 http://www.dailymail.co.uk/femail/article-2561518/Winters-unofficial-Olympic-sportSingle-U-S-athletes-admit-Tinder-turned-Sochi-dating-game.html
13 a New York-based incubator owned by the
IAC(http://en.wikipedia.org/wiki/IAC/InterActiveCorp )
http://www.forbes.com/sites/stevenbertoni/2014/11/04/exclusive-sean-rad-out-astinder-ceo-inside-the-crazy-saga/2/
6

Tinder is a market pull innovation: the app is answering to a shared human

need - meeting new people without the deriving feelings. Many companies
had already tried to reach this goal but the market got services
characterized by an excessive focus on profiles and pictures, mostly fake,
lack of information of the likely match, tiring inscription system, high costs
in term of time and money, to summarize a bad user experience. Rad and
Mateen wanted to try to fill this gap.
Even if Tinder has not been built through an open innovation process,
users had high impact on the development of the app. At the beginning, the
app was launched in few colleges where listening to the users they adjusted
the features and usability of the app with slight modifications to address
the feedbacks received. The app became more user friendly enhancing the
user experience.14

Standards battles

14 Here you have how Tinder was at the beginning:

http://www.businessinsider.com/tinders-first-startup-pitch-deck-2014-7?op=1
7

The technological lockout affects Tinder in two main dimensions. The first
one is the network effect, Tinder is certainly the type of innovation that
relies on the effect that the users of the service have on the value of that
service for the other users15. The app takes advantage of the two-sided
network that has two types of members, creating value each others
because the value of the network to one type of members depends on the
number of members of the other side. It entails that Tinder aims to be a
standard for dating but also for meet new people for many and varied
reasons. The bigger the number of Tinder users the more its value
increases and appeals the nonusers. The second dimension regards the
installed base. At the beginning, it could originate a technological lockout
since apps that relies on networks need large
installed base to function. The ease of usage, its user
friendly and the needs addressed fueled Tinder
installed base increasing it exponentially. Since its
simplicity and its free features, I cannot talk about
learning effect and switching cost. To conclude, from
a wider perspective the app could consider as
technological lockout complementary goods that can
be the mobile phone and the smartwatch. Indeed,
Tinder is a mobile app and it operates just on mobile
phone and smartwatches. The availability only on
those kinds of devices is both an advantage and a
drawback: it differentiates from the other services
making the experience more direct but limits the
usage excluding tablets and laptops.

Timing of entry
Since it is not the first dating service nor the first dating app neither the
first Facebook based mobile dating app, Tinder is not a First Mover but can
be defined fast second. It gathers the main features owned by the most
influential and disruptive apps - social discovery, gamification, location
and messaging - including those features in a service that changed the rules
of its market with its ease, user-friendly experience, reliability and level of
identification.

15 Innovation Management Slides Session 2: STANDARDS BATTLES & DESIGN

DOMINANCE, TIMING OF ENTRY. Mathieu Chat October 2014 page 11
8

Business Model16
Customer Segment
Tinder focuses on mobile app users addressing the customer segment
called the mass market. In fact, there is no difference between customer
segments, offerings, distribution channels and level of profitability nor
willingness to pay for different aspect of the offer 17. The different customers
themselves perceive differently the features of Tinder depending on which
has more value for them. Even if it could be defined as a multisided
platform because the platforms value for a particular user group depends
substantially on the number of users on the platforms other sides18 there
are not two distinct groups of customers, associated value propositions
neither revenue streams. Tinder takes advantage of the two-sided network
and it has some features of the multisided platform pattern but the
distinction is not among customers but among the perception that the
customers has about Tinders features.

Value Propositions

16 Tinder Business Model Canvas https://bmfiddle.com/f/#/z4VX5

17 Business Model Generation. Osterwalder and Pigneur 2010. Page 20
18 Business Model Generation. Osterwalder and Pigneur 2010. Page 78
9

Tinders value proposition makes its service unique. Increasing the speed
and frequency to whom people meet, users do not need to go in a bar they
can just start swiping and waiting for their matches. The mutual liking
system had a double effect, it has deleted the fear of rejection and
simultaneously it has solved many problem for high-pursued women as
unwanted suitors, unfiltered messages and meetings. It delivers you an ego
boost experience, since users are enabled to see the list of all their matches
knowing they have liked them. Moreover, through Facebook authentication
it provides the identity restriction that makes the app more reliable and
comfortable, the users know that the displayed Tinder profiles correspond
to real people who often belong to circle of Facebook friends that intersects
yours. Therefore, it adds the social and geographical proximity of the
possible matches because Tinder is a location-enabled app as well.
However, Tinders level of privacy is not affected by the interaction with
Facebook. In fact, only the First name, the age and a maximum of six pics
are showed as well as the social network will not share anything on your
behalf. Finally, Tinder provides a new way to meet people and simplify how
human court and approach.

Channels
Tinder reaches its users through different channels used to address the
Channel phases. The channels are the Apple Store, The Google Play and
Windows Store as well the webpage and blog. The apps stores with their
reviews and the Blog with its post raise the awareness among customers,
providing user generated experiences and app generated news. The
evaluation, purchase and delivery are essentially on the stores because the
content of the blog is app generated. The webpage performs its
functionality after sales since users can write to Tinder if they are looking
for any support.

Customer Relationship
Tinder has weak relationship with its customers because its value lies on
the linkages that it builds. The app listens to the customers to build
improvements and add new features providing them for all the necessary
means to communicate and get support. The Tinders customer
relationship is self-service19.

Revenue Stream
19 Business Model Generation. Osterwalder and Pigneur 2010. Pag. 29
10

In November, Tinder shifted from free

business model to a freemium one.
Since the app is capitalizing the twosided network and is not providing a
unique service, it had to build a
customer base in order to attract new
users the bigger the number of swipes
and matches the bigger the number of
users that entails linkages that are more
precise. At Tinder, they knew the
demand generated at a price of zero is
many times higher than the demand
generated at any other price.20. Yet
everybody were wondering how the app
would draw profit from the users base.
They introduced their freemium
business model. Tinder offers to its
large base of users the services basic
features. Users can swipe the profiles,
upload up to 6 Facebook pictures, text
the users that previously liked them and
recently Moments21(swipe-able photos
you can instantly share with all of your
matches at once but for a limited time - 24 hours) and List (the function of
list the matches by their personal criteria). The premium features are Undo
and Passport22. Until now, if you would accidentally swipe someone he or
she would be lost in the Tindersphere. Undo allows users to take back their
last swipe. Instead, Passport lets you change your location to match with
people around the world. In fact, so far Tinder had a geographical
constrain showing only users in a certain range of distance. Passport
embraces travelers needs and increases the value of the service expanding
its level of reach. Since the free basic service have a low marginal cost, they
can afford to provide users for this ancillary features 23. Tinder has a low
20 Business Model Generation. Osterwalder and Pigneur 2010. Pag. 90
21 http://www.gotinder.com/blog
22 http://www.gotinder.com/blog https://vimeo.com/111080451
23 Business Model Generation. Osterwalder and Pigneur 2010. Page 96
11

average of cost of serving a free user and it is likely that the price they are
charging (probably 0,99 ) will increase the rate at which free users
convert to premium customers.

Key Resources
The Platform is the most important asset in the fremium business model,
allowing free basic service to be offered at low prices 24. Therefore, the app
stands for the main mean through Tinder delivers its value proposition the virtual place where users like or reject each other, matches and text.
Then, we have intellectual resources as the brand, worldly acknowledged
for the boost it brought in the human relationships. Finally, the customer
database that includes all the matches, lists, messages and data ongoing
evolving. In fact, the more we use Tinder the more the precision the
algorithm has - recording tastes and changes in interests and friends.
Human resources are necessary as well, the team and its perspective on the
goal and mission of Tinder had lead the app through a development that
tried to address to customer feedback and requirements. Moreover, the
initial decisions of the team shaped the evolution of the app, as the choice
to pilot it in the colleges or spread it among L.A. social influencer. Although
we are not in knowledge-intensive industry, as pharmaceutical or software
ones, the human resources owe their importance to the vision they bring to
the developing of the app. As Financial resources, we must mention the
IAC, which is still providing the necessary financial support it stands also
as a drawback since the founder owns just the 10% of the app. It would be
not feasible not quoting, Since Tinder is a mobile app and function only on
smartphones and smartwatch, the mobile network is a key resource
differentiating the service accelerating the meeting process.

Key Activities
The key activities regard the management of the platform and its
promotion as well as the provisioning of the service. Tinder has to manage
the platform where each users have to see possible matches based on user
preferences, location and interests. The algorithm improves its accuracy
progressively with the usage of the app, updating the possible matches
displayed with both new friends added on Facebook and in-app swipes and
rejects. Since the beginning, Tinder promoted its service and brand image
in an unconventional way. They started with the colleges in order to have
24 Business Model Generation. Osterwalder and Pigneur 2010. Pag. 102
12

feedback from an audience used to technology. Then they have carried on

targeting the social influencer and big events to turn to mainstream the app
and engage the entire audience, finally Tinder parties are the new
disruptive way to promote the app implementing in the reality the benefits
of Tinder - parties perceived as safer, more
intimate and personalized. The goal of Tinder is
providing a service that improves how people
meet in real life, quoting its motto: its like real
life but better. Their service is similar to the real
life approach but without the correspondent
drawbacks. Now people are willing to jump into
interactions with much less information about
each other than earlier dating platforms
provided25, they wish to meet, text and exchange
information with counterparties to whom know
less information because of Tinders strong
connection with reality perceived by the users
due to its promptness. The service allows people
to see the activity while it is proceeded by users,
making the virtual dating common and shameless if everyone does it, it is
not anymore pathetic and awkward.

Key partnerships
The first important key partnership affect one of the main functionality of
Tinder: the geographical proximity. The app display the users nearby you
and to make it available, Tinder had to agree on a partnership with Google
Map. Once Tinder shifted to the fremium business model, the
geolocalization increased its value since one of the two features, Passport,
uses the geolocalization to add value to the customer. Recently, Tinder
partnered with Amnesty International to make aware people of violence of
women26. Since the app was accused of sex discrimination, it helped to
rehab the image of the brand. Therefore, I can define such kind of
partnership that act on the perception that the customer has about the
brand key ones.

25 http://www.forbes.com/sites/jeffbercovici/2014/02/14/love-on-the-run-the-nextrevolution-in-online-dating/
26 http://www.amnesty.org.au/news/comments/34082/
13

Cost structure
The costs for Tinder are definitely value driven. The additional value of the
app is the service it provides, hence it cannot decrease any cost connected
with the value proposition. The highest costs are linked with the platform
management and development, Tinder has to guarantee simultaneously
the stream of possible matches updated with correspondent modifications.
Then Tinder has to bear costs that regards, its employees, the software
development and the cost related with the premium features. Besides,
there are also Google Map rights and storage costs for the data of each
customers and the expenditures for the promotion of the app.

External Value Chain

IT

Inbound Operatio Outboud Marketin

Service
Logistics ns Logistics g & Sales

Storage
Informatio
n

Managing
Digital
Platform
Software

Mobile
Inventory
& Delivery
system

Algorithms

Google
Play, Apple
Store,
Windows
Store
Google
Maps

Software
Developme
nt

Tinder
webpage
and blog

Activities
with

Ongoing
Updating
of the
data

Maintena
nce and
Diagnosti
cs
systems
Promotion
of Service

14

Suppliers
value chain

Company
value chain

Channels
value chain

Google
Maps

Apple
Store

Facebo
ok

Google
Play

Google
Maps

Windo
ws

Apple

Customer
s value
chain

Mobile
App

Website
and Blog

15

Intellectual property
It seems Tinder did not patent its service. It is possible to find a patent
about an application for mobile phone, called Lasso27, that works with the
same principle of Tinder, Hot or Not. Two students filed the patent in
2005 before the beginning of the smartphone era. Currently, there are not
patents available on WIPO website nor on US patent office, neither patents
filed from Hatch Lab, the incubator where Tinder was born, or IAC, the
company that own both the incubator and Tinder. It is unknown how
Tinder is protecting its functionality of displaying the possible matches
through an order based on a score that depends on the social proximity on
Facebook. Instead, Tinder protects its Trademarks with US Trademark 28,
Australian Trademark29 respectively registered on 02/04/2014, and
04/11/2013 (in Australia it will be protected for 10 years). While in Canada,
its registration is still pending although it has been filed on 01/11/2013.
The owner of trademarks in US and Australia is Tinder, Inc. Corporation
and in Us Hatch Lab corporation as well.

27 http://www.google.com/patents/US20070037574
28 http://www.wipo.int/branddb/en/showData.jsp?qi=46551417967152980&ID=USTM.85980800&LANG=en&NO=1&TOT=3
29 http://www.wipo.int/branddb/en/showData.jsp?qi=46551417967152980&ID=AUTM.1589323&LANG=en&NO=0&TOT=3
16

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