An analysis of the U.S. mobile dating app industry from its inception in 2007 to its phenomenal shakeout in 2013 demonstrates that Tinder changed the game — quite literally. As in other cases of industry disruption, dating app upheaval illustrates that newcomers need to compete by transforming noncustomers into customers rather than challenging incumbents for the established mainstream market. Although emerging technologies may allow newcomers the opportunity to overthrow incumbent competitors, our research shows that altering the user experience for an overlooked market segment, not technology, is the key success driver for industry disruption.
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Dating apps, including eHarmony, Match.com, and OkCupid, originated as desktop-based dating websites in the dot-com era and transitioned to mobile apps after the iPhone was introduced in 2007. These apps dominated the industry with their first-mover advantages and large user bases. Simply because they had more users, these incumbent platforms offered users a higher probability of finding a suitable partner. They also emphasized matching algorithms, which were continually refined using ample data gathered about their customer bases. New entrants, with small customer bases and lack of historical data, struggled to gain even a slight share of the market as legacy brands dominated the industry until 2012.
Enter Tinder, an app that transformed the industry to become the most popular dating app just a few months after its launch in 2012. (See “Market Share of Mobile Dating Apps in the United States.”) The app didn’t introduce a cutting-edge matching algorithm to suggest more-promising dates to its users, nor did it showcase new technology. In fact, from a technical standpoint, Tinder initially paled in comparison with other apps, and it frequently crashed. Two key factors underpinned Tinder’s sudden success: focusing on young adults, an overlooked market segment; and introducing new gamelike features, such as swiping and variable rewards, which altered the user experience and reduced consumption barriers in that specific segment.
Numerous academic studies show that before 2013, U.S. young adults were less likely to meet dating partners online
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3.G.G. Parker, M.W. Van Alstyne, and S.P. Choudary, “Platform Revolution: How Networked Markets Are Transforming the Economy — and How to Make Them Work for You,” (New York: W.W. Norton, 2016).