Name: Brainstorm Tech 2024: Rise And Grind
Uploaded: 2024-07-16
Duration: 13 min 7 s
Description: George Arison, Chief Executive Officer, Grindr Interviewer: Polina Pompliano, Founder, The Profile; Co-chair, Fortune Founders Forum

George Arison, Chief Executive Officer, Grindr   Interviewer: Polina Pompliano, Founder, The Profile; Co-chair, Fortune Founders Forum

Brainstorm Tech 2024: Rise And Grind

Tech

George and I were both born in Eastern Europe, Bulgaria and Georgia, the country in our, just a black the parts. Yeah. In our, in our cultures at the time didn't exactly put a premium on capitalism and entrepreneurship. But you moved to the US at age 14. Can you tell me how and what drew you to the US? So my dad was a little naughty and he believed that sin was going to fall apart and that English was going to be the kind of the way to survive. And when did he think that they like 19 eighties, early eighties? Yeah. And so he forced us to learn English, me and my brother when we were very young. Um I on my own applied to us prep schools when I was 12. I got into a few of them. Fortunately because I had an American tutors in Georgia who wrote me reference letters. And so it kind of worked out. Um and then I went to the embassy got a visa and showed up in the US when I was 14 and I was the one of the very first Soviet kids that allowed to leave. Um to come to the US. Um So I was very lucky. Um So I just ingrain anything like going to America was the thing to do. Um So even though I grew up in a very Soviet environment, like the support for America was very, very high in my mind. Um And, you know, I kind of jokingly like I've been built three companies since then and I joke that actually coming to America was my first start up. That was kind of game changing for my life. Yeah, we had a very similar upbringings. Um So before you became grindr CEO in 2022 you had actually co founded several start ups. And you've said before, there's, there's a lot of founders in this room, you've said before that founding a company is an impossible thing to do and that you have to be a little bit arrogant to become a founder, arrogant and crazy, arrogant and crazy. So I'd like to hear what you think it takes to start a company in today's environment. Yeah. So one of my motives in life is like, do impossible things, which obviously is an oxymoron. But I think it, it kind of encompasses at least how I shaped my life and I came up with it once because I had an employee at shift my previous company who was really complaining about like, I can't, this can't be done. This came and now I'm like, look man my whole life is impossible because, like, I'm now here doing this and, like, look at where I was born. So nothing's actually impossible. And so that's been really, been effective for me as an executive. Frankly, it's been very effective with my kids too because now my daughter, whenever she doesn't want to do something like, you know, oh, nothing is impossible data and I can actually do it, which is really good. Um, and, and I think that's true, kind of always, it's not a differentiator thing. Um I think the thing that's really different about now versus a even a decade ago is the number of people you will need to build a company is actually going to be much less than you needed in the past. Why? Because of what A I is going to do to how we work. And so the company being starting like starting now or especially a year from now, like I can easily envision a company getting to 50 or 100 million in revenue with like 25 employees because they'll have a bunch of synthetic employees as well doing a lot of the work. And so that's a really big difference because then the people you bring on board as your core team need to be exceptionally good because the synthetics are gonna be providing leverage for them and then to be able to work that way. So I think talent is going to become a more comp, I mean, it's always difficult. But instead of like, well, this is like, ok, for now he'll, he'll be good enough for the next 18 months. Get me to the next stage and then I'll get somebody else. I don't know if you could do that anymore in a, in a world that we're untrained to in the future. And I like that synthetic employees. I hadn't heard that before. So, so George actually took grindr public and a few things to note. Grindr generated $75.3 million just in Q one of 2024. And it has a market cap of 2.1 billion for those who aren't familiar with the Grindr model. How do, how do you make money? Yeah. Well, the vast majority of the money we make is through subscriptions. So we have two tier of subscriptions. One's 99 9 and one's 3999 and people subscribe to that. We have a fairly low pair penetration. It's about 7% as a comparison point. Tinder, which is kind of the dominant product for straight, straight people. It's about 15% penetration. 15. Yeah. So there's a lot of room largely. It's because the grinder never really focused on modernization until about three years ago. So we're now only now starting to kind of drive modernization in a big way by investing in the product and building features that people want to pay for. Um And then we have an ad business which is about 15% of our revenue. And that's a big growth opportunity as well for us because we have a very kind of in demand user base. You know, average gay couple in America has a household income that's twice as high as an average straight couple. Interesting gay men have two X likelihood of having AJ DMB A phd MD versus a straight male counterpart. They also don't usually have Children. So we have a lot of disposable income and more time. So the audience is really good for advertising. And so that's another big role factor. So those are the two primary ways in which money. Yeah, I want to come to you guys for questions. If you have a question, please raise your hand and we'll send somebody your way before we come to you. I have one more question for you. So it really feels like grindr is innovating at kind of breakneck speed. You have, you have added features, trip planning. It's more of a community than the other dating apps. You're creating a neighborhood in your pocket. What features can users expect in the near future? Yeah. So when I joined like grind has always been the thing that it does really well, which is like the right now immediate use case with a user or long term relationships. You know, our rough estimate is somewhere between one and 4 to 1 and five gay male relationships in the US originate on grindr. So we do play a pretty big role in that sense, but people do use the product in a very community sense as well. Like, hey, I'm going to Singapore, let me use Grindr to figure out what I'm going to be doing in Singapore. And oftentimes I interviewed a candidate once for a fairly senior role and like, oh yeah, my friend just had a tour of Singapore for three days with this guy that he met with on Grindr and that's not an uncommon thing. So a lot of what our focus has been like, how do we product all that? People already use grindr in so many different ways, but we don't have features for that. Can we build features for those? And so we are now going in that direction. There are two things we've publicly talked about. One is travel because I think there's a pretty big opportunity there in travel planning and in events planning and that's both local discovery and when you're traveling, discovery. Um you know, like, hey, what are the activities going on tonight? Where should I go to a bar? Um What are the places for me to stay, et cetera? And then the second big one is around health and wellness. Um You know, not surprisingly health and among is really important to gay by men is like a big driver of how we make decisions. Uh And so there's a lot we can do there. Um We're not really given use case examples of that yet because we're not ready to do that. But I think it'll be kind of coming. But you can imagine anything from like, you know, people might want to buy certain types of medications, which they already do, but we actually can extend our brand to let them do that and integrate it with our core products to, you know, loneliness and depression is a really big thing in our community. And if we can do things through A I to help support those problems and help people be in a better place that could be really valuable for the users. So that's kind of what we're envisioning. And I want to highlight something here because as I'm hearing you talk, if you're on Tinder or Bumble, once you meet somebody, you get off the app. But grindr technically, even you can stay on the app. A lot of people stay on the app, even not in a relationship that's actually quite common. Yes. People kind of do a little bit age out. So we do an opportunity to kind of bring people, you know, 40 plus to be more engaged. If you look at our user cohorts, like we start to not have as many users at that age group as we used to. So there is a way to bring them back, I think. But in general, people stay on the app for that long time. That's fascinating. Any questions right here. Uh Please state your name company and be concise. Yeah. Hey, Andy Dunn, my company is called P I live in Chicago. Do you think Chicago can ever become a great tech place? Yeah. So we were really lucky. Um Grindr used to be owned by the Chinese and was forced the recipe to be bought by, you know, a, a non Chinese ownership cohort which is mostly American and American allies. Um that, that, that bought it. And uh the, the, the team, the engineering team at that point was almost all based in Taiwan. So when that transition happened, they all quit. So there's like emergency, we have no engineering. What are we going to do in 2020 in the middle of COVID? It so happened with one of the people involved in that transaction was Sam Yan, who is a former CEO of, of match and he had been ac o another company that had sold to fedex and they had let go of a bunch of engineers. And so he's like, wow, I actually, I have a bunch of engineers in Chicago that like RDA should hire. And so we got a little bit of a like aqua hire like situation. It wasn't actually a hire, aqua hire, but, you know, we brought a bunch of engineers in together from the shop around team in Chicago. So we end up with a Chicago team that way. And since then, we've dramatically expanded that team. That's actually where most of our engineers are. We do have engines in the Bay area as well and it's been really effective. Um, I mean, I generally think that, you know, during the last decade, it's gotten a little bit out of control in terms of what people expectations are. And the Prima Donna nature of stuff has been a little bit too much and that's something we don't experience in Chicago. And that's very positive. The flip side, what's hard is actually finding mobile talent, like hiring IOS engineers in Chicago. It's been way more difficult than I would have expected. Um Grindr has 13.7 million monthly active users. That's an insane number. Why do you think that your dating app, competitors like Tinder and Bumble are on the decline while you're growing? Well, I'm asked this question a lot and I try to be super diplomatic in my, don't be diplomatic. Well, it's like, I mean, we are all kind of trying to do the same thing is like help, help people find love, right? So I think we should be positive about it. But in one of the things that strikes me about how Bumble and Tinder approach the world is that they frankly don't treat 70% of their users very well, right? Like 70% of people who use both of those products are men and the way they talk about their male users is actually really negative to the point where like, they're offensive to them. And like, I'm not their target audience but I still, I, as a guy, I'm offended and it's not because like, I think it's great to be talking about how we are really targeting women and we want to create a really great experience for women 100%. That's awesome. But you can create a great experience for somebody without creating a bad experience for somebody else. And is it the messaging or the c it's both and it's like the messaging but the music as well. So you have like these huge percentage of men who are looking to settle down, who are looking to find a partner but and they're very captive to the products in the period when they're there. Why not build a lot of features for them, by the way, those are your paying users as well because both of the products are built in a way in which men pay and women don't have to pay for the product as much. And so I think it's a huge missed opportunity in, in kind of how they speak about it and, and in some ways, it's gotten worse because instead like as a run into pro instead of thinking like, hey, I got this huge audience, I don't do anything for, let me lean into that one that's trying to mean more into the audience that they've always been doing something for, which is the women but the result of that is they're even more negative about men. So, like, when I listen to the earnings. So I'm just like, wow, like, if I was a user, I wouldn't want to even be on this product. Given how I'm, I'm, I'm, they're talking about me. So that's one thing. The second thing is the product innovation hasn't really happened. Right. Like, they've had the product they've had and they've not really innovated. Everyone's like, well, why is hinge doing so well? Because hinge is actually product innovating. So people are moving to a product that is new and different, which is exactly what you'd expect. I mean, if we, we did not product innovate for a long time either, that's why we're now very much focused on product innovation. Because if you don't do that, then the users are going to go somewhere else inevitably in 30 seconds. Can you tell me in 10 years? Is grindr still a dating app or is it something else? Well, we already, like I said this at an invest last month that we are more to a social network than we are dating up. Yes, dating. And the casual dating experience is always going to be co to grinder. I mean, very directly like sex is a really big part of gay culture. And if you try to remove that, that would not really work. But around that, we can build a lot of stuff that's more social network like with a very kind of direct online and in real life components. I think that's the direction we'll be heading into. And when can we expect more of these features to come to the app? So we gave a lot of direction on that, that invest today. We are one of the big things we're working on right now is called right now. That's going to be coming late this year, early next year. Some of it is already in launch, but a lot more of it and then the rest of it probably kind of in 25 and into 26. Amazing. Thank you so much George.