Tinder · B2C · dating app
Put a toggle in the top bar that opens a new paid tier
About $50M in revenue from one small A/B test
What they did
What happened
- Stage
- scale (~50M MAU)
- Effort
- One A/B test, sized small-to-medium
In their words
How a Single Paywall Experiment Generated $50M – Jeff Morris, Chapter One, Ex-Tinder
David BarnardYeah. One particular experiment that you mentioned was a single experiment that generated $50 million in revenue. Tell me about that one. I mean, at Tinder's scale, maybe that wasn't... And maybe you can fill in the details there of how big the scale was, but tell me about that one experiment that generated $50 million.
Jeff MorrisYeah. So probably in 2018, it was actually a really fortunate surprise, tested a toggle on the top of the application where you could enter a new subscription tier from the top nav bar. And obviously talking about real estate, that was a really premium piece of real estate within the product and people would tap on it. It was almost like we almost discovered new real estate because the design team actually didn't want us to have that top nav, which is always a tension by the way. You have to have a beautiful product, but you also have to be creative in how you monetize. And so really we always had a roadmap as small, medium, large Excel experiments like everybody else, and I would probably say that was a small to medium experiment. It was kind of a throwaway AB test. And you wake up and you look at the dashboard I was talking about and you're like, wow, crap, this thing is really working. And those moments are really fun.
Jeff MorrisYou get some of that when you're working at a smaller company. I had the benefit and fully aware of how lucky I was to be working at scale with 50 million monthly actives and a product that people were willing to pay for. So if you tried putting a top nav into a meditation app, I'm not sure if it would convert as high as what we were doing. But the point is you should constantly be thinking about where users can access your premium features, where the paywalls are placed. And often I find people are just not thinking creatively enough. Maybe you have some nav buried in your nav that people just can't access, and it always surprises me. I think revenue teams should be on the whole a bit more aggressive in terms of pricing and entry points because again, if your product's great, people are willing to go along for the ride.
David BarnardYou brought up something in there that I wanted to talk about next anyway. And it is the tension between creating a quality product and caring about the users and the mission and things like that, but then also monetizing. And so it sounds like that $50 million paywall was a tension in the company of the designers not wanting the top nav pitch. But how do you balance those things to keep the product quality up while still monetizing as …
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More from this episode
- Limit free swipes per day and charge for moreStopped mass-swiping and auto-swipers; turned into a strong revenue driver (no numbers)
- Give each paid feature its own paywall and check its sales every morningShowed 2-3 features drive most new subs; weak ones were made free
- Offer several paid tiers, from cheap starter to big spenders at $50K a yearGuest's biggest revenue unlock at Tinder; no numbers given
- Set different prices by country, starting with fast-growing markets like India
- Polish the paywall like a core feature, e.g. add a gold shimmerGuest says it showed users they cared; no numbers
- Ask for payment only after a user gets a match and starts chatting
- Build engagement and retention first; push monetization only years laterReached 30-40M monthly users before revenue became a focus in years 4-5
- Create a revenue team with its own iOS and Android engineersGrew from 6 engineers in 2016 to 40+
- Give the first flight free with every pro feature, then lock some
- Make free users pay before they can fix their buggy first buildFrustrated users complained publicly on Twitter
- Ship a new feature every single dayBecame the default database for most major website builders
Tags: ios, android, paywall-placement, entry-point, navigation, subscription-tiers, ab-test