How Hinge went from making less than $1 million in revenue in 2017 to about $400 million in 2023
On this episode of Executive Exchange, Hinge founder and CEO Justin McLeod sits down with host Ruth Umoh to discuss the online dating business, Hinge's premium services and how he transformed the company from a less than $1 million revenue business in 2017 to one that's projected to rake in a whopping $400 million by the end of 2023.
Justin also talks about the beginnings of Hinge, starting it in 2011 while he was attending Harvard Business School and slowly over time making changes to the app that now is the number three dating app worldwide.
Justin also talks about the beginnings of Hinge, starting it in 2011 while he was attending Harvard Business School and slowly over time making changes to the app that now is the number three dating app worldwide.
Transcript
00:00 Let's talk Hinge itself. What led you to launch it? Did you see it as a viable business opportunity
00:06 right from the outset? I was in business school at the time, so I think I was thinking like this is
00:11 well and actually at the time I was imagining a bunch of different startup ideas because I was
00:17 trying to enter a business plan competition and then the idea for Hinge through a sort of random
00:22 series of events just kind of hit me and... Walk us through that. Give us some specifics,
00:27 some color. Yeah, I was so I was in my second year of business school and I think that the
00:33 I'll say like overall I feel like the search for connection has kind of been like the
00:38 a theme in my life and romantic connection and like has been like a very big piece of it and
00:44 I had been dating on and off someone in college and she and I didn't work out in the end and I
00:55 and also during college I was actually a very heavy like drinker and drug user and had like a
01:01 pretty intense addiction problem and so those two were very related and on the day that I graduated
01:06 I stopped drinking, I like got sober and then when I went back to business school I just
01:10 I had always relied on drinking and drugs in order to like you know have the courage to go out and
01:18 meet people and it was my is the way that I socialized and I was just stuck I didn't really
01:22 know how to do that without that crutch and I just had trouble meeting people and I actually
01:27 reached out to my college girlfriend to try to actually like get her back and she turned me down
01:33 and I was heartbroken and I really just needed I was like really looking for a way to be able to
01:40 find people and connect with people outside of like going out to bars or going to parties
01:44 and that's kind of like when the that's when the idea came. One thing I do want to talk about
01:51 is you know Hinge has this subscription tier you also say that your mission at the end of the day
01:57 is to get people to go on more dates how do you balance the two getting people to pay for
02:03 subscriptions but also saying that at your core you know you're just looking to simply get people
02:07 to go on dates are they mutually exclusive? No and we have a principle that like the free
02:12 product is sacred and we really only charge for what we say we can't give away for free
02:17 so there are things that by their nature have to be scarce like roses like if everyone had
02:22 unlimited roses then the rose wouldn't mean anything anymore or if everyone had unlimited
02:27 boost then a boost if everyone boosted all the time then no one would be boosted
02:31 or there are things that harm the ecosystem like we think that a lot of some of like the
02:38 preferences that people set actually limit them and they're not actually good for them but if
02:42 someone has like a real intention they really want to set a preference then then they can upgrade to
02:46 do that but overall what we're trying to do is we think that the free product is great at getting
02:51 people on dates if you do want a leg up by using things that are that by their nature have to be
02:56 scarce then you can pay for those to have a better experience. Given that Hinge is a business at the
03:00 end of the day they have to be a business proposition do you or does the algorithm try
03:04 to steer people towards a paid subscription? No the algorithm does not try to like we
03:13 uh like how to describe it like there's not like the algorithm changes once you
03:19 um i'm trying to think about how to answer that question it doesn't there's no like
03:24 designing of the algorithm to get you to pay yeah i think no. Is that the end goal for you
03:31 as a CEO to get people to pay i mean to like this is a business model? No i mean genuinely like the
03:38 what we found as a business is that when we help people get on more dates we grow faster and people
03:43 tell their friends more and so that kind of like overall user growth is the lifeblood of our
03:48 company and so if we were to trade that off by like limiting your experience by getting you to
03:54 like just pay more money that wouldn't be good for our overall long-term trajectory and long-term
03:58 growth. Talk to me about who you are as a CEO what is your leadership style what have you learned over
04:04 the last decade running a tech company a tech platform? Yeah i don't know where to begin uh
04:10 i've changed so much i mean i think one of the i think one of the things that people say about me
04:15 who work with me is that like i'm on just inversion like 12.0 i think that i've like i
04:21 one thing that i'm is like very true that means i take feedback very seriously i'm like constantly
04:27 in a in a state of like self-reflection and continuous self-improvement i was so bad at being
04:33 a CEO so bad at product and a marketing and pretty much everything when i started Hinge
04:37 and i think over time through a lot of incremental improvement and self-reflection and feedback
04:42 i and persistence which i'd say is like my probably number one quality i think that has been like the
04:49 main key to success. Any growth numbers you can share whether it's revenue valuation anything of
04:54 that nature any financial metrics? Yeah so we went from less than a million dollars in revenue in 2017
05:00 to we're projecting to do about 400 million this year which is a like i think in the fourth quarter
05:07 yeah we're expecting to do well over 40 almost 50 percent revenue growth we are setting up a date
05:15 every two seconds about every two seconds now for the number three dating app globally.