EP21 - Dating Apps
19 yo founder is losing money on a dating app he founded.
His marketing team says their mission is to help people find "the one."
I dont think he understands.
When their customers find "the one". They delete the app.
A successful connection is a lost customer. It's a two-person churn event.
My two greatest enemies are love and happiness.
His summer intern didn't understand this. He noticed a user who hadn't had a match in six months.
Feeling clever, he tweaked the algorithm to give him a "boost."
He got a match. Went on a date. Fell in love. My intern celebrated it as a success.
I congratulated him. Then, he is unemployed.
The intern thought his job was to create couples. His job was to create retention.
The app isn't a search engine for love. It's a slot machine for loneliness.
Every swipe is a pull of the lever. The occasional match is just enough of a win to keep you playing.
Frustration is what drives our in-app purchases.
'Likes' and 'Boosts' are not tools for success. They are taxes on desperation.
We don't sell relationships. We monetize the hunt.
Until the founder pivots their monetization strategy, I am short this company.
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Context
Show me the incentives and I will show you the outcome -- Charlie Munger.