- 2 months ago
Category
🗞
NewsTranscript
00:00Look, it's June. It's Pride Month here in New York and around the world, and Grindr is the
00:04world's largest network for LGBTQ people. The app is now evolving into what it's calling a
00:11global gayborhood, integrating AI, or as the CEO calls it, gay-eye. That's right. And looking into
00:17expanding its product line beyond just the dating app. Well, that includes live events like a pop-up
00:22concert with Madonna took place Thursday night in Times Square. In the past year, Grindr's revenue
00:27is up 38%, while its share price has dropped by half. For C-Suite Saturday, we spoke to CEO George
00:33Arison about the future of the company. I can't control what the stock does. The stock's going
00:38to do its own thing, and I think that over the long term, the market is pretty efficient. Over
00:43the short term, it's not. Sometimes, and I think Grindr does have some complexity for people to
00:49understand, but we do have an incredible business. I mean, the company's grown 25-plus percent every
00:53year over the last four years. Since I've been around even longer, it's been growing at that pace
00:58or higher. EBITDA has also been getting better. We did more EBITDA last year than we did revenue in
01:032022, which I think that's the number I really like, and it's going to continue going up. And
01:08I don't see anything that in the next three, four years is going to slow us down. Like,
01:12we have a very strong plan, and execution is really, really strong. The team, you know,
01:18is doing everything that needs to be done to make the business work really well. So I think my job,
01:24from the investor perspective, is to keep meeting with people and telling them our story. And I think
01:28over time, it'll take care of itself. You know, we had some challenging things happen last fall,
01:33when one of our shareholders had issues with his pledged shares, and that led to a squeeze on him,
01:41and resulted with the share price coming down quite a bit. So I think there's some recovery that needs to
01:46happen from that. And that does take time. I mean, it's only been three quarters. So we'll keep kind
01:52of plugging along. And what I do tell the team is do not focus on the share price, because that'll
01:58be
01:58distracting. We should focus on execution. And ultimately, the market is pretty efficient.
02:03You did a survey last year, and you found that one in three gay relationships started on Grindr.
02:08And that's been kind of an evolution, because I think when I first started learning about it,
02:12it was thought of as a hookup app. But now several, actually, most of my friends who've gotten married
02:16in that community met on Grindr. What does that do to your business model? And how has the dynamics of
02:22what people are using the app for changed? Yeah, the actual number is 50%. So it's even higher.
02:26Wow, okay. It's pretty, it's pretty incredible. Every wedding I've been to, it's how did you meet
02:31Grindr? I mean, for me, one of the most cool kind of moments when I was just getting started,
02:35actually wasn't CEO yet, but I was doing the roadshow for us going public. And we met with this one
02:40investor. And he's like, let me show you this picture. And he pulls out his picture from his
02:44brother's wedding, where brother and his husband had met on Grindr. And they had this like little
02:49Grindr logo where you could take a photo in for every guest. At the wedding? Yeah, at the wedding.
02:53So he pulls this out. And I'm like, okay, well, this is going to probably go well, because I don't
02:55have to like explain to him what we do. I think, look, in the gay world, in gay culture,
03:03things are pretty fluid, right? So casual dates or hookups leading to long-term relationships
03:08is actually very common. Internally, we tend to joke that if a gay couple hooks up three times
03:12and then doesn't go on a date, probably will never go on a date. Whereas a straight couple,
03:16if it doesn't go on three dates prior to a hookup, that relationship probably won't go anywhere.
03:19That's right. It's a three-date rule. It's just a different three-date rule.
03:21So that's just how the culture is. But the reality is that a lot more gay men today want to
03:33be in
03:33long-term relationships than was the case, say, when I was in my 20s. And, you know, Andrew Sullivan,
03:39who was probably one of the primary architects of the case for gay marriage over the years,
03:44you know, he would make this argument that if we allow gay marriage, then gay men will move more
03:50in the direction of what straight people do, which is getting married and having stable long-term
03:55relationships. And I think that's very much happening. Because if you survey men under 35,
04:01over half of them say that they want to be in a long-term relationship. And a quarter of them
04:05say they want to have children. So I have kids. I've always wanted kids. But when I would say that
04:10I wanted kids in my 20s, I was literally like the oddest ball out, one in the 100. So society
04:16is changing dramatically in part because of the recognition of marriage. And that's really positive.
04:22And obviously Grindr is an awesome place to help with that because that is where people meet. And we have
04:29the critical mass of people to meet each other.
04:30We want to ask you about AI. And I understand you know you something you've coined gay-eye
04:36through the app.
04:37I see what you did there.
04:38That was very good.
04:39All right. Tell us what it is, how it works, and if it's been worth the investment. Because one of
04:44the
04:44things we're looking at, especially right now, is the ROI on these AI investments and whether or not
04:49they're the juices worth the squeeze for some of these things.
04:51Yeah. So we've been way ahead of the curve on AI. I had built an AI company in 2018, not
04:57on Gen AI,
04:58because Gen AI models weren't out back then. But having done that, and that company's done very
05:02well and was very good for everybody involved, I knew that AI was going to be huge for Grindr
05:08because we have so much data. And that creates unique opportunities. So we both have invested a ton
05:14into building AI products for users. And those are going really well. We have a lot of them are
05:20already out in the product and the feedback from users is very positive. We're building a new AI
05:24tier, which is a more premium tier that is powered with gay-eye. He's already in beta with a bunch
05:30of users and will be live towards the end of the year.
05:32What does it do? Does it just really hyper-tailored to user experience?
05:34It gives you a lot more information about people you're talking to and creates transparency for both
05:40parties about why that connection might make sense. Then we've also done a ton of investment in how
05:45we work. And Grindr is really like, I actually call it terraforming, not transforming, because
05:50the change is so massive. Our engineering team started adopting AI coding much earlier than most
05:58people. And today, 80% of the code that's written in Grindr is not written by humans.
06:03And it's all AI generated. And an engineer's job is fundamentally changing. It's no longer writing
06:08code. It's actually architecting the code and managing synthetics that are writing the code.
06:15So every engineer is becoming an engineering manager, in effect. And organizations are going
06:19to become flatter as a result overall. And in March, when we were planning for Q2, Eng Team came
06:28to the planning meeting and said that they don't have enough work and we need more projects.
06:33I've been building software for 20 years and I've never had anything like that happen to
06:39me. And don't get me wrong, our team works extremely hard. We are a very hardcore culture. We're not like
06:45SpaceX, but in the layer of where do you fall into hardcore? We're much closer to SpaceX than we are
06:51to an
06:52average company. So these are not people who are not working super hard, but we still had more capacity
06:58because of what AI is doing to how productive we are. I don't care how much money we spend on
07:04tokens, honestly, because every dollar that's spent on tokens is way more output than you'd ever
07:10expect. I think companies that are worried about the spending are actually not well managed,
07:14because then probably people are running around doing things that don't need to be done.
07:19But I don't want to give numbers out because these were confidential numbers that were shared with
07:23me. But one of the very large tech companies that recently was in the press a lot being worried about
07:29token spend, I heard what the total number of their concern was. And on an order of magnitude basis,
07:37they were, say, at 20K per engineer and we are roughly running like 50K per engineer in token usage.
07:43But I'm happy if that became 100. Well, because I know for a fact already that what we're getting
07:48on the other side is way more valuable than that. So let me ask you lastly, just about politics.
07:54And I'll confess, we were both in Washington for the White House Correspondents Association dinner.
07:57And alas, neither of us got the invite to the party that you threw in the run up to that.
08:03But it was a popular party. And I think popular because there were so many people there from
08:06both sides of the aisle attracted a broad swath of people. How do you view engagement with politics,
08:12with Washington? The job of any CEO in this day and age is to make that part of the role.
08:16You have
08:16to engage with regulators and with lawmakers. So about six months into me studying my job,
08:20I get this note from the person who was leading Grindr for equality, which is our public service arm,
08:26telling me that this horrible situation is developing in Egypt where Egyptian police is arresting gay
08:31men and then using their phones to honey trap our gay men. And I'm like, okay, who in DC do
08:36we call?
08:37Because like, you know, America has a lot of influence around what happens in Egypt. And we didn't have a
08:40single person to contact because we had zero relationships in Washington, which I thought
08:44was kind of totally unacceptable. And then secondly, it felt to me like a lot of the groups that
08:50should be advocating on behalf of gay rights and do were becoming very partisan. And I have some of
08:56the opinion that you cannot accomplish stuff in DC, no matter who's in power, unless you're bipartisan,
09:00because it takes 60 votes to get anything done in the Senate, but also for things to stick around,
09:04you need both sides to be bought into it. And I felt like we were uniquely positioned to be able
09:08to do it,
09:09because we are a business, and we can talk to both sides of the aisle. And that's what we've
09:13been striving to do. And so far, we've been very, very happy. There are specific things we care about,
09:18decriminalization of homosexuality in certain countries where it's illegal, marriage equality,
09:23access to fertility treatment for gay couples in the US at the same in the same way that it's available
09:30to others, and then access to STD preventative and treatment medications and services,
09:37which matters to all our users. This is not an issue that's like 60-40 on Grindr. It's
09:42most of these issues that are like 90-10 or 100-0. And we can make massive headways on those
09:49if we
09:50bring people together to advocate for them. Do you think, given your background,
09:54you're in a good position to try to talk about these issues to a more conservative-leaning government?
10:00I mean, I know you grew up in what was then the USSR is now Georgia. That's not a place
10:04that's very
10:05friendly towards alternative lifestyles. Does that give you a way to talk about this to people who
10:10may have a knee-jerk note? But when you talk to them about the human rights aspects of it and
10:13how
10:13it can benefit society as a whole, they're more able to have that conversation.
10:17It certainly helps me better appreciate the challenges that our users face in countries like
10:22that. I mean, one of my first board meetings at Grindr, we were discussing whether to enable
10:27Grindr in Iran or not. And this was like something we had shut down because of U.S. sanctions.
10:32And we're getting messages from local activists and users saying, we would prefer for you to be
10:38on and take the risk of being caught by the government that we're using Grindr to not having
10:42a way to connect with each other, because there's no other way to do it.
10:44That's because the risk of having that on your phone is really substantial.
10:47It's massive, yeah. So, I mean, I'm like, yeah, not a normal board discussion of like what you're
10:51going to be dealing with. I remember going to see the Secretary of Labor about a year ago or
10:55nine months ago. And we were talking about, hey, we want to make sure that if we do things on
11:01IVF,
11:02we should, that should be extendable to gay couples because gay couples are not actually
11:06receiving the treatment themselves. It's usually a surrogate that's receiving treatment. And
11:09like you should be able to transfer that service on. And her response to me back then was like,
11:13the president said all families, that includes gay families. And like some people might not expect
11:18that from this administration, but I was like, there's no question about that. And that's actually the
11:22kind of rule that they issued on IVF and insurance, you know, earlier this Q2. So that was a really
11:30good meeting on our end and a very good outcome for everyone. And so I think people are generally
11:35very willing to listen. And that's not to say that there's obviously a huge number of people
11:40in the Democratic Party who've been massive champions of gay rights. And they have been great
11:45at engagement with us. And obviously, it's really imperative for us to be working very closely with
11:49them and ensuring that they have the right information to be able to do the incredible
11:53work that they do on behalf of all Grindr users.
Comments