Key Takeaways
- Match Group CEO Spencer Rascoff plans to refurbish Tinder for a new generation of daters who prefer serious relationships over hookups.
- After a 13% workforce reduction, Tinder will reinvest $45 million in saved costs to improve its innovation and safety efforts.
- Rascoff revealed several upcoming features aimed at Gen Z values, including Double Date and a new ID authentication system.
Spencer Rascoff is taking a hammer to millennials’ favorite neighborhood hang-out: Tinder.
As CEO of Match Group, and soon-to-be CEO of Tinder following Faye Iosotaluno’s recent decision to step down from that position, Rascoff knows better than anyone the crossroads the dating industry is facing. The question dating app developers are asking themselves is whether to be a hookup app, or not?
As an industry leader, Rascoff’s answer has the power to send Tinder — and the industry — in a new direction.
“Think of Tinder like a bar where people come together to meet new people,” Rascoff told The Wall Street Journal. “We have to innovate to drive more people into our establishment, and that means renovating our bar.”
Rascoff becoming CEO of Tinder is a no-brainer; Tinder is easily Match Group’s most valuable and best-known brand. Now, Rascoff plans to transform Tinder for a new generation of daters who prioritize authentic connections over fleeting flings.
Reinvesting $45 million into the now-classic dating app couldn’t hurt, either.
Dating App Users Prefer Quality Over Quantity, Rascoff Says
According to WSJ, Rascoff shared his plans for Tinder in an internal memo on Tuesday. The gist? Gen Z is leaving dating apps behind, and Tinder needs to catch up if it wants to survive.
“Users don’t want more matches, they want better ones,” he allegedly said in the memo.
After all, the thrill of a match notification means nothing if the person a user matched with isn’t actually compatible.
This is why Rascoff allegedly called for increased workplace efficiency and product innovation in the memo. Giving users high-quality results at a quicker rate is never a bad thing, and Rascoff claims that Match Group’s recently announced 13% workforce reduction will actually streamline the process.
Losing over 300 employees, including 1 in 5 managers, will make Match Group workers “more nimble, more focused, and better aligned, enabling faster decision-making,” Rascoff said at the company’s May 8 earnings call. It will have a similar impact on Tinder’s employees, he said in the memo.
Rascoff allegedly encouraged Tinder employees to work in small, efficient teams. “Small teams are more nimble than large ones, and can innovate rapidly with accountability,” he explained.
Clearly, Match Group is willing to bet on Tinder — and even reinvest in its future.
Tinder is No Longer a Haven for Millennials
Now, Match Group intends to save upwards of $100 million in costs as a result of its workforce reduction, and to reinvest $45 million back into Tinder, according to Evercore ISI.
This $45 million will help Tinder innovate with Gen Z’s values in mind. Rascoff specifically mentioned AI enhancements and stronger safety measures as goals for 2025.
Many of the millennial daters who made Tinder a success are no longer on the dating scene. Like most dating professionals, Rascoff and his teams at Match Group and Tinder have picked up on a worrying trend: Gen Z is less likely to be pulled in by Tinder’s original hookup culture.
The speedy succession of likes and matches, the unknown person at the other end of flirty messages, breathless hookups were all qualities that once made Tinder so thrilling. Now they alienate daters who find the them to be too high-stakes, too impersonal, and too dangerous.
“This generation of Gen Z, 18 to 28 — it’s not a hookup generation. They don’t drink as much alcohol, they don’t have as much sex … we need to adapt our products to accept that reality,” Rascoff said in a May investors meeting, according to WSJ.
There’s Still Untapped Value in Tinder
For now, Tinder’s focus is on strengthening safety measures and improving user experience, even if — and when — doing so means further revenue decreases, Rascoff told WSJ. Going forward, Tinder must prove to Gen Z that it still has untapped matchmaking potential.
As Tinder’s team outlined in its Q1 earnings report, the app’s ultimate goal in 2025 is to “rebuild trust on the platform through a cleaner ecosystem; deliver better user outcomes; and re-energize the user experience.”
Rascoff hopes that the $45 million of saved operating costs will make this goal a reality.
Rascoff pointed to Tinder’s double dating project as evidence of its new low-stakes, safety-first mission. Double Date encourages young daters to find safety in numbers by dating in groups. The feature has already seen success among Europe’s Gen Z daters:
“Nearly 90% of Double Date profiles are from users under 29, and women using Double Date are three times as likely to swipe right on a pair than an individual,” Tinder’s team said in its recent earnings report. “It’s also growing our audience, with nearly 12% of invited users in these markets representing new registrations or reactivations.”
Rascoff hopes that Gen Z in the U.S. will embrace Double Date when it makes its American debut this summer. AI will almost certainly play a role in Tinder’s modernization efforts, and may even have a hand in ensuring user safety, which is another major Gen Z priority.
“Last week we announced another cutting-edge innovation aimed at ensuring user authenticity – our collaboration as the first dating or consumer social company to integrate with World ID,” Tinder announced in its report.
Innovation is clearly on Rascoff’s mind as of late. During May’s earnings call, he cited “a lack of innovation” and “our failure to recognize and respond to changes in the younger demographic, especially Gen Z and what they want” as reasons for the app’s consistently falling revenue and engagement.
But by reenergizing Tinder’s young user base and putting $45 mill toward the app’s refurbishment, Rascoff just may turn things around.
