You don't want to date a loser, right?
Well, there's, you know, we believe there's someone for everyone, so I don't pass judgment. There's no such thing as a loser.
That's kind of your business model.
There's no such thing as a loser. They're just somebody that hasn't met their right person yet.
That sounds really good.
Hi everyone, I'm Nicolai Tangen, the CEO of the Norwegian Sovereign Wealth Fund. Today I'm joined by somebody really special, Spencer Rascoff, the CEO of Match Group. That's the company behind Tinder, Hinge, and around a dozen other dating apps. Now, think about it for a second here. 40% of couples today meet online, not through friends, not at work. So this is one of the biggest shifts in human behavior that we have ever seen. And Spencer, he sits in the middle of it. A bit of an outsider, he built the property giant Zillow before taking over Match a year and a half ago, and we in the Norwegian Sovereign Wealth Fund own 1% of Match. So we are cheering you on, Spencer.
Thank you. I am glad that you are. I appreciate it and thank you for having me.
Now, how are matches actually made?
We have a recommendation algorithm, the Recs Algo, which tries to figure out who to show to whom. The way I like to think about it is, there are decks of cards kind of on the table. Imagine 10 decks of cards on this table with 52 cards each. The order of each deck has already been determined by us based on certain rules associated with each user type. Like there might be a deck that is optimized to show people in a particular order to keep them as a payer, essentially, to retain their monetization. There might be another deck for first-time users to drive engagement based on first-time users. There might be all these different goals. What we've recently done was we've done what we call Q unification, where we've combined all of these decks into one and then re-sorted the cards, and that's radically improved the quality of recommendations as measured by matches and chats and sparks.
And so what exactly has happened there?
We've basically customized and personalized the order of a much larger stack based on what we know about you, as compared with other people who have exhibited similar behavior to you in the past.
And is that based on who I like?
So if somebody likes people with red hair, they see a lot of red hair.
They will, but one of the big limitations is they'll only see people with more red hair a couple hours later. So right now our recommendations are not real time, which is a big problem.
When will it be real time?
By the end of the year, which is the way other recommendation algorithms work. If you're on Spotify and you like a certain type of music, or Instagram or TikTok, you know, you can see the algorithm changing as you give it more signal, you know, real time. That will come later this year. We think that has a lot of potential.
In addition to looks and so on, what are the other things you sort according to?
Their profile information. So we've made a lot of effort over the last year and a half to make profiles more rich. So additional content, and now you can leave what's called a contextual like. So old Tinder, you would just swipe right, which basically says, 'I'm interested in this person.' New Tinder, the profile has lots of different information, like what do they do for work, and what's their relationship with their friends like, and you know, what do they like to do on weekends? And when you respond, you're now indicating that you're interested in that particular item. You're saying, 'Yes, I like that they like to go for hikes.' And so now you've not only told that recipient that you like that they like to go on hikes, but you told us that you like people that like to go on hikes.
How much data do you have?
Near infinite. I mean, billions of matches.
How many people do you have drilling down in this? How many scientists?
We have this recommendations algorithm team that just eats and sleeps this topic, is probably 40 people, including some very senior people from TikTok and other companies that have really pioneered the recommendation algorithm space.
What's the most surprising finding you have seen?
My most surprising finding was how much potential there still is 15 years later. I mean, when I joined this company a year and a half ago, I assumed we already had the world's best recommendation algorithm, and we've improved it so much in the last 18 months, and I just think there's so much more potential. That was surprising to me.
A perfect guy, like who performs the best on Tinder, is somebody with a complete profile that has demonstrated the time, put in the time and effort. It's the opposite of what we have far too much of, which is the one-photo gym selfie with his shirt off. Like guys think that's appealing to women. It's not. What's appealing to women is seven or more photos, rich profiles, content, words, not just photos. Answering the prompts, basically demonstrating effort. That's what women are looking for.
Do you have to have a dog in there as well?
Dogs help. Yes. Everyone loves dogs. Yes. Cats don't help as much. So my profile — I'm married, but I'm on Tinder. I'm on all of our apps. And my profile says I'm married, I'm the CEO, I'm here for research. But my profile has pictures of me with my dog. I also have a picture of me with my wife on my profile.
I do okay. I do okay. But of course, this is just for research, and I never...
What's the perfect woman?
Likewise, just showing lots of content. So it's showing that they also have friends and that they do interesting things. So we actually have a feature that we're testing right now which basically uses AI to score your profile and make recommendations. So for example, for my profile, when we ran it through that system, it said I need more diversity in my clothing because I basically wear the same blue quarter-zip with the same blue shirt underneath basically every day. And most of my photos were like that. And so you want to show more sides of yourself. You want to show you with your friends, you with a glass of wine, you at a concert, you at the beach, because you're showing diversity of your experiences.
If you were to pick out a few of those things, what is it that really matters? Is it like beach, friends, clothing?
Well, it kind of depends on whom you're appealing to. I think for a typical Gen Z user, it's probably you with friends or you doing fun activities.
You don't want to date a loser, right?
Well, there's, you know, we believe there's someone for everyone, so I don't pass judgment. There's no such thing as a loser.
That's kind of your business model.
There's no such thing as a loser. They're just somebody that hasn't met their right person yet.
That sounds really good. Historically, men dated horizontally and down, and women dated horizontally and up socioeconomically. Is that still the case?
You know, we don't know much about the socioeconomic nature of our users. On Tinder and Hinge, our two biggest apps, we don't ask for that information. On Pairs, our number one app in Japan, we actually ask for salary. We include blood type. I mean, Japan is a very different culture. But we don't tend to look at socioeconomic impact.
My gut feel is that that's probably still right. That's probably a lifelong societal bias that online dating hasn't changed much. Although, I mean, we are proud of one thing that online dating has changed, which is it's exposed people to a much larger array of people than they otherwise would have noticed. So if you were mostly meeting people through your social network in real life or through friends, you're going to end up with people of a more similar socioeconomic or even racial makeup. But online dating exposes you to a much broader array. So perhaps we — actually, this would be an interesting thing to study. I haven't studied this or I haven't seen research on this, but I would guess, I would speculate, that we have contributed to greater diversity of socioeconomic relationships.
We don't share that, but...
It's higher than women, right?
It is higher than — well, for Tinder it's higher for men, and for Hinge. But some of our apps have more women than men. You know, The League and Pairs tend to skew more female. The League is our app for highly ambitious people. My guess is you'd be on The League if you were on a dating app. And that tends to skew more female. But you know, because Tinder has so much liquidity — I mean, it's the number one dating app in 166 countries. Even though there's a greater percentage of users that are men than women, we still have many tens of millions of women. And so in any given city, there's a wide selection of potential.
So what's the average age of men that women look at?
Well, about 60% of our users on Tinder are Gen Z, are 18 to 28, and about 60% of our users on Hinge are also Gen Z. So our typical user is kind of 25-ish, would probably be our median user, 18 to 28, Gen Z.
But I just saw some numbers that men look at women — I mean, the average man looks at women, you know, sub-25, and women look at men at, you know, 40.
I haven't looked at that. That would be — that's also, you know, you should work in our...
You need to look at your numbers here because this is good fun, right?
Yeah, this is good fun. No, you should join our analytics PR function because there's lots of fun data PR stories to mine from this content.
Is facial hair on the way up or down?
You're asking me all these questions I haven't prepared for or been asked by anyone. Mustaches are all the rage. You know, mustaches are the cool Gen Z thing globally now. I'm not a — you know, it's not for me, as you can tell as I sit here clean-shaven. But facial hair and mustaches in particular are definitely on the way up.
Yeah. Can you look at like fashion trends, where they're going? With you like, you know, you have the online retailers, you can basically see what colors are trending, which direction in various cities in the world, right? You can see this is trending in Munich, this is trending in Frankfurt. It's really fascinating. Have you done anything?
No, we haven't. But I've written it down in my notepad and now we will. You're right, we absolutely can mine that type of data. No.
Is it like a winner-takes-it-all for a single user in a single market, or online dating?
I mean, in dating, is it like some women and some men get all the hits, all the likes?
I see. No. No. And this is a bit of a surprise to me as well. I think there's a societal perception that that would be the case, but no, there really is a person for everyone out there. We see people of all types, of all body types, of all appearances, of all profiles finding matches. So people — and here the recommendation algorithm is quite good to put the right people in front of the right people. People are finding one another. I am inundated with emails and wedding invitations and comments on social media of people who have found their spouses, their partners, their relationships on Tinder, Hinge, or one of our apps. I mean, we are...
We think they're lower. That's what the research says. The people that meet online have a lower divorce rate than people that meet in person.
Why do you think that is?
I think that people that date online have sort of played the field and vetted lots of potential partners. So once they settle down, they've had more experience and understand more about themselves. This is another thing I didn't really appreciate until I entered the category. But online dating is as much about learning about your potential mates as it is about learning about yourself. And I think once you've gone through that online dating journey, you're more ready to stay in a marriage because you've experimented and explored and learned more about yourself and your preferences.
Spencer, moving on to how we date. How has the dating scene changed? What's different?
It's changed a lot. It's so much more social, and young people bring friends into dating. In fact, they don't even use the word dating. A date is a very high-pressure experience. You know, Gen Z users tell us that when they think of a one-on-one date, they think of it like a job interview in a very scary, stressful way. Part of this is their response to COVID and the pandemic, where young people lost a couple years of kind of societal adaptation, where they were learning how to form relationships, how to make small talk. Many of them don't drink as much alcohol, partly because they missed a couple years of development in late high school, early college. So as a result, dating today is more about friends first. It's you and three friends and, you know, her and five friends all kind of hanging out, and you're all getting to know each other over a couple weeks or months, and then people start to sort of couple off. So it's much more of a social experience than a one-on-one experience.
When you see the numbers about loneliness, what do you think?
I think it's tragic. It's an existential risk to society, to our species. It's what drew me to this job, to be quite frank, that there is a serious loneliness epidemic, which is a global health crisis and...
And it's worse than smoking.
It's worse than smoking. More than actually smoking. It is the key to longevity. If you want to live a long, happy life, you need to find a partner and find a social network of close friends. That is actually what contributes more than health or exercise or eating well. It's actually a close relationship.
What do you think causes the loneliness?
It's been exacerbated by social media, undoubtedly. We're all obsessed and absorbed in our phones, and that's caused us to live more isolating experiences. People are spending less time physically with other people. Working remote has made that worse. People are less connected to social institutions like their churches, their political parties, their unions — the ways and places that people used to physically congregate to meet people in person. We have a looser connection to those, especially in the United States, but really globally. And then the cost of living has gone up so much — cost of housing, education, and other things — that people are having fewer children, and that also is loosening social bonds.
I saw one survey which said that 45% of men between 18 and 25 have never approached a woman in person.
It is shocking. And you know, it is partly because they're afraid, they're nervous of it. It's also because they don't want to be perceived as overly aggressive. So the MeToo movement and other social trends over the last 10 years have made it feel awkward and almost like aggressive. If a man went up to a woman in a bar and said, 'Hi, can I buy you a drink?' — which would have been a very normal activity even 10 years ago — that can be perceived as an overly aggressive move, perceived by the woman and then perceived back to the man in that way. So...
Do you think it's getting better or worse, or just...
Well, I don't think that trend is going to change. I think that at least for the next couple of years. Now, Gen Alpha — we've done a lot of research on Gen Alpha, which is 12 to 18. All right. Gen Alpha, 12 to 18, is quite different than Gen Z, 18 to 28. Gen Alpha is more of a reversion to the mean. Gen Alpha, they date, they hook up, they have boyfriends and girlfriends in high school, kind of in a more traditional way. They're still very social, but they don't have the scar tissue from the pandemic.
So you think COVID caused a lot of this?
Yes, I do think it did. I think there was a trend in motion already, and then COVID accelerated it. I care deeply about this problem, and it's one of the reasons that I decided to basically come out of retirement to take the CEO role, because I think this is an important problem that Match Group is one of the very few companies that's actually addressing. I think the social media companies and the AI companies all are inadvertently contributing to this problem, and I think the online dating companies help address it.
But are you also contributing to the problem, given that you have to be perfect?
No, I don't think we are. I think we create a very liquid solution to this problem, where people at scale can safely meet new people, and we work very, very hard to get them off the app and in person. So Hinge's whole tagline is 'the app that's designed to be deleted.' We take it very, very seriously at Hinge in particular. We want people to use Hinge to meet the one and then delete Hinge.
But I mean, if you lose them too quickly, you're not going to make much money.
That's okay. That is totally fine. I am positive, and as a shareholder, you should support that because the positive word of mouth far exceeds it. So I'll use my brother and sister as examples. They're in their early 30s. They both just moved in with their partners that they met on Hinge. And yes, we lost their $20 a month that they were paying when they both stopped subscribing to Hinge. But the word of mouth that they have spread, of having told hundreds of their friends that they met their person on Hinge, has undoubtedly created much more revenue for Hinge than the revenue that we lost from them.
What does the change in alcohol consumption do to dating, you think?
It makes it harder. I mean, alcohol is not very good for you, health-wise, but it does lower your inhibitions and make it easier to socialize. And so it's changed the types of dates that people go on. People go on dry dates now. They go for a walk in the park. They go for a class, an event. Tinder has pushed very heavily into events. We now have events in the app in 25 cities. We'll be global, probably 75 or more cities by the end of the year.
