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- [00:00]
Indiana University Announcer
Indiana University strengthens tomorrow's workforce with practical, real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu.edu impact,
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Interviewer 1
Bloomberg Audio Studios Podcasts, Radio news. Look, it's June Pride Month here in New York and around the world, and Grindr is the world's largest network for LGBTQ few people. The app is now evolving into what it's calling a global gaborhood, integrating AI or as the CEO calls it, gay eye. That's right. And looking into expanding its product line beyond just the dating app.
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Interviewer 2
Well, that includes live events like a pop up concert with Madonna took place Thursday night in Times Square. In the past year, Grindr's revenue is up 38% while its share price has dropped by half. For C Suite Saturday, we spoke to CEO George Arison about the future of the company.
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George Arison
I can't control what the stock does. The stock is going to do its own thing. And I think that over the long term, the market is pretty efficient. Over the short term, it's not sometimes. And I think Grindr does have some complexity for people to understand. But we do have an incredible business. I mean, the company's grown 25/% every year over the last four years. Since I've been around even longer, it's been growing at that pace or higher. EBITDA has also been getting better. We did more EBITDA last year than we did revenue in 2022, which I think that's the number I really like. And it's going to continue going up. And I don't see anything that in the next three, four years is going to slow us down. Like, we have a very strong plan and execution is really, really strong. The team, you know, is doing everything that needs to be done to make the business work really well. So I think my job from the investor perspective is to keep meeting with people and telling them our story. And I think over time it'll take care of itself. You know, we had some challenging things happen last fall when one of our shareholders had issues with his pledged shares and that led to, you know, a squeeze on, on, on him and resulted with share price coming down quite a bit. So I think there is some recovery that needs to happen from that. And that does take time. I mean, it's only been three quarters, so we'll, we'll keep kind of plugging along. And what I do tell the team is to not focus on the share price because that'll Be distracting. We should focus on execution. And ultimately the market is pretty efficient.
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Interviewer 1
You did a survey last year and you found that one in three gay relationships started on Grindr. And that's been kind of an evolution because I think when I first started learning about it, it was thought of as a hookup app, but now several, actually. Most of my friends who've gotten married in that community met on Grindr. What does that do to your business model and how is the dynamics of what people are using the app for changed?
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George Arison
Yeah, the actual numbers 50%. So it's even higher. Wow.
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Interviewer 1
Okay.
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George Arison
It's pretty incredible.
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Interviewer 1
Every wedding I've been to, it's had a Jimmy Grinder.
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George Arison
For me, one of the most cool kind of moments when I was just getting started, actually wasn't CEO yet, but I was doing the roadshow for us going public, and we met with this one investor and he's like, let me show you this picture. And he pulls out his picture from his brother's wedding where brother and his husband had met on Grindr and they had this like little Grindr logo where you could take a photo in for every guest. At the wedding? Yeah, at the wedding. So people decided, I'm like, okay, well, this meeting is going to probably go well because I don't have to like explain to him what we do. I think, look, in the gay world and gay culture, things are pretty fluid, right? So casual dates or hookups leading to long term relationships, actually very common. Internally we tend to joke that if, you know, a gay couple hooks up three times and then doesn't go on a date, probably will never go on a date. Whereas a straight couple, if he doesn't go on three dates prior to a hookup, that relationship probably won't.
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Interviewer 1
That's right. It's just a different three date rule.
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George Arison
So it's. So it's, you know, that's just how the culture is. But the reality is that a lot more gay men today want to be in long term relationships than was the case, say, when I was in my 20s and you know, Andrew Sullivan, who was probably one of the primary architects of the case for gay marriage over the years, you know, he would make this argument that if we allow gay marriage, then gay men will move more in the direction of what straight people do, which is getting married and having stable long term relationships. And I think that's very much happening because if you survey men under 35, you know, over half of them say that they want to be in a long term relationship, and a quarter of them Say they want to have children. So I have kids. I've always wanted kids. But when I would say that I wanted kids in my 20s, I was literally like the oddest ball out. 1 in 100. So society is changing dramatically in part because of the recognition of marriage and that's really positive. And obviously Grindr is in an awesome place to help with that because that is where people meet and we have the critical mass of people to meet each other.
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Interviewer 1
We want to ask you about AI and I understand you, you know, you something you've coined gay eye through the app.
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Interviewer 2
I see what you did there.
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Interviewer 1
All right, tell us what it is, how it works and if it's been worth the investment. Because one of the things we're looking at, especially right now, is the ROI on these AI investments. And whether or not they're the juice is worth the squeeze for some of these.
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George Arison
Yeah, I. So we, we've been way ahead of the curve on AI. I had built an AI company in 2018, not on Gene, because genders were out back then, but having done that and that company has done very well and was very good for everybody involved, I knew that I was going to be a huge foregrounder because we have so much data and that creates unique opportunities. So we both have invested a ton into building AI products for users and those are going really well. We are, you know, have a lot of them are already out in this product and the feedback from users is very positive. We're building a new AI tier which is a more premium tier that is powered with Gai, that it will be already in beta with a bunch of users and will be live towards.
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Interviewer 1
What does it do? Does it just really hyper tailored?
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George Arison
It gives you a lot more information about people you're talking to and creates transparency for both parties about why that connection might make sense. Then we've also done a ton of investment in how we work and Grindr is really like, I actually call it terraforming, not transforming because the change is so massive. Our engineering team, you know, started adopting AI coding much earlier than most people. And today 80% of the code that's written in Grindr is not written by humans and AI generated. It's all AI generated. And engineers job is fundamentally changing. It's no longer writing code, it's actually architecting the code and managing synthetics that are writing the code. So every engineer is becoming an engineering manager in effect. Organizations are going to become flatter as a result overall. And you know, in March when we were planning for Q2 Engeam came to the planning meeting and said that they don't have enough work and we need more projects. I've been building software for 20 years and I've never had anything like that happen to me. And don't get me wrong, like our team works extremely hard. We are a very hardcore culture. We're not like SpaceX. But in the layer of where do you fall in the hardcore, we're very much closer to SpaceX than we are to an average company. So these are not people who are not working super hard. But we still had more capacity because of what AI is doing to how productive we are. I, I don't care how much money we spend on tokens, honestly, because every dollar that spent on tokens is way more output than you'd ever expect. I think companies that are worried about the spending are actually not well managed because then probably people are running around doing things that don't need to not use to be done. But I don't want to give numbers out because these were combination numbers that were shared with me. But one of the very large tech companies that recently was in the press a lot being worried about token spend. I did a rough I heard what the total number of their concern was and by on an order of the magnitude basis like they were say at 20k per engineer and we are roughly running like 50k per engineer in token usage. But I'm happy If that became 100 because I know for a fact already that what we're getting on the other side is way more valuable.
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Interviewer 2
Let me ask you lastly, just about politics and I'll confess, we were both in Washington for the White House Correspondents association dinner and alas, neither of us got the invite to the party that you threw in the run up to that.
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Interviewer 1
We're not bitter about it, but it
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Interviewer 2
was a popular party and I think popular because there were so many people there from both sides of the aisle, attracted a broad swath of people. How do you view engagement with politics with Washington? The job of any CEO in this day and age is to make that part of the role. You have to engage with regulators and with lawmakers.
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George Arison
So about six months into me starting my job, I get this note from the person who was leading Grinder for Equality, which is our public service arm, telling me that this horrible situation is developing in Egypt where Egyptian police is arresting gay men and then using their phones to honey trap our gay men. And I'm like, okay, who in D.C. do we call? Because like, you know, America has a lot of influence around what happens in Egypt. And we didn't have a single person to contact because we had zero relationships in Washington, which I thought was kind of totally unacceptable. And then secondly, it felt to me like a lot of the groups that should be advocating on behalf of gay rights and do were becoming very partisan. And I am of the opinion that you cannot accomplish stuff in D.C. no matter who is in power, unless you're bipartisan, because it takes 60 votes to get anything done in the Senate. But also for things to stick around, you need both sides to be bought into it. And I felt like we were uniquely positioned to be able to do it because we are a business and we can talk to both sides of the aisle. And that's what we've been doing, striving to do. And so far we've been very, very happy. There are specific things we care about. Decriminalization of homosexuality in certain countries where it's illegal marriage equality. Access to fertility treatment for gay couples in the US in the same way that it's available to others, and then access to std, preventative and treatment medications and services, which matters to all our users. This is not a issue that's like 60, 40 on Grindr. It's most of these issues are like 9010 or 100 and 0 and, and we can make massive headways on those if we bring people together to advocate for them.
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Interviewer 1
Do you think, given your background, you're in a good position to try to talk about these issues to a more conservative leaning government? I mean, I know you grew up in what was then the USSR is now Georgia. That's not a place that's very friendly towards alternative lifestyles. Does that give you a way to talk about this to people who may have a knee jerk? No. But when you talk to them about the human rights aspects of it and how it can benefit society as a whole, they're more able to have that conversation.
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George Arison
It certainly helps me better appreciate the challenges that our users face in countries like that. I mean, one of my first board meetings at Grindr, we were discussing whether to enable GRINDR in Iran or not. And this was like something we had shut down because of U.S. sanctions. And we're getting messages from local activists and users saying we would prefer for you to be on and take the risk of being caught by the government that we're using Rindr to, not having a way to connect with each other because there's no other way to do
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Interviewer 1
that, because the risk of having that on your phone is really substantial. Yeah.
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George Arison
So I'm like, yeah, not a normal board discussion of like what you're going to be dealing with. I remember going to see the Secretary of Labor about a year ago or nine months ago and we were talking about, about, hey, we want to make sure that if we do things on IVF we should, that should be extendable to gay couples because gay couples are not actually receiving the treatment themselves. It's usually a surrogate that's receiving treatment and like you should be able to transfer that service on. And her response to me back then was like the President said all families, that includes gay families. And like some people might not expect that from this administration, but I'm like, there's no question about that. And that's actually the kind of rule that they issued on IVF and insurance, you know, earlier this Q2. So that was a really good meeting on our end and a very good outcome for everyone. And so I think people are generally very willing to listen. And that's not to say that there's obviously a huge number of people in the Democratic Party who have been massive champions of gay rights and they've been great at engagement with us. And obviously it's really imperative for us to be working very closely with them and ensuring that they have the right information to be able to do the incredible work that they do on behalf of all grander users.
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Indiana University Announcer
Preparing for tomorrow's careers requires forward thinking education. Indiana University graduates are degrees above the competition, building on strong foundations to create new possibilities that make a difference where you live. From teachers and nurses strengthening communities to engineers advancing microchip research, Indiana University is investing in tomorrow's workforce through career ready training. Learn how IU is driving economic growth at iu. Edu Impact. Lots of places can expose you to identity theft. That's why LifeLock monitors hundreds of millions of data points a second for threats to your identity. Which is way more than anyone can do on their own. If we find anything suspicious like new loans or changes to your financial accounts, we we alert you right away all through text, phone, email or the LifeLock app. Save up to 30% your first year. Visit lifelock.com iheart Terms apply.