The Hidden Cash Machine Wall Street Keeps Ignoring | George Arison

George Arison is the CEO of Grindr. In this conversation, we break down how AI has transformed Grindr's engineering team and product roadmap, the real "gay discount" baked into the stock price, and Grindr's fast-growing push into health. We also discuss the app's outsized role in gay relationships and safety risks abroad, and why efficiency — not headcount — is driving the company's next stage of growth. ====================== Arch Public is an agentic trading platform that automates investment strategies across Stocks, Commodities, ETFs and Crypto. Whether you’re rotating into AI & Gold, allocating to the S&P 500, or accumulating Bitcoin, Arch Public executes your plan 24/7 without ever taking custody of your assets or funds. Sign up today at https://www.archpublic.com, and start your FREE automated trading strategy! ====================== Figure’s $160k Community Appreciation (https://www.figure.com/crypto-community-appreciation/ T&Cs (https://www.figure.com/crypto-community-appreciation/disclosures/) Need liquidity without selling your crypto? Take out a Figure Crypto-Backed Loan, allowing you to borrow against your BTC, ETH, or SOL with 12-month terms, 8.91% interest rates, and no prepayment penalties. Or check out Democratized Prime (https://figuremarkets.co/pomp) and earn ~8.5% APY on real world assets. Unlock your crypto’s potential today at Figure! https://figuremarkets.co/pomp Figure Lending LLC dba Figure (NMLS 1717824). Loans subject to approval. Crypto collateral may be liquidated. Terms apply - see full disclosures at http://figure.com/disclosures/ ====================== Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/pomp ====================== 0:00 - Intro1:27 - How AI is transforming Grindr's business & product5:13 - Life inside an AI-run engineering team12:04 - Using AI as a CEO 19:57 - The "gay discount" in Grindr's stock price25:27 - Grindr's growing health business31:01 - Grindr's global impact & safety risks abroad36:10 - Demographics of Grindr's user base39:34 - Marriage, kids, & Grindr's family policy push43:24 - Why Grindr's best days are still ahead47:47 - Cutting headcount & running a lean company51:34 - Where to find George & Grindr

• 0:00Speaker 00

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• 0:29Speaker 01

  195 million to 540 million with insane margins. And then they add like Grindr discount line to it, and it gets you to a different number. I've had two different investors independently show me models like that.

• 0:41Speaker 02

  Oh, interesting. So they literally have like a line item baked in?

• 0:44Speaker 01

  Correct.

• 0:44Speaker 02

  The gay discount?

• 0:45Speaker 01

  Yes.

• 0:46Speaker 02

  What's going on, guys? Today, we have a very interesting conversation with George Arison. He is the CEO of Grindr. Now, this conversation is interesting to me because Grindr is one of those businesses that everyone discounts, literally. We're going to talk about something called the gay discount and why so many different investors, they completely ignore this business. But it's actually really, really interesting because they drive a ton of free cash flow. It's been growing very quickly, and it may be one of those diamonds in the rough that people are completely missing. But on top of that, this company's also been embracing artificial intelligence in a way that very few public companies have. They're not only using AI inside of the workplace in terms of changing the ways that they actually work on a day-to-day basis, but they're using AI inside the product as well. And we're going to get into some of the details there that I think you're going to find interesting. And then last but not least is that Grindr, most people think of it as somewhere

• 1:30Speaker 02

  where people go to connect with each other and try to find hookups. And that is part of the app. But also, they are pushing into health. And this derivative business model is ultimately driving why so much free cash flow is coming from this company. And so in this conversation with the CEO, I think you guys are going to learn a lot. I think it's going to change the way you think about how AI is being adopted by public companies. And frankly, George is fun. There's a couple of good jokes in here. He talked about some graphic content. And for some of you guys, you're going to be quite interested. So here's my conversation with George Arison.

• 1:58Speaker 02

  All right, George. You guys run a very, very good business at Grindr. But there's a lot of folks who have zero idea how much AI you use inside of the product and for the employee base in terms of how you guys work. Can you walk me through how Grindr as a business and as a product has changed with the rise of AI?

• 2:17Speaker 01

  I probably took this job because of AI. I wanted, once I was done with my last company, I was going to go and build an AI company because this is 2021. I kind of knew that AI was going to be a big deal. And then when they approached me about this show, I'm like, wow, you have this incredible product that is very profitable and has the very devoted user base. At that point, I think it was like 11 and a half million monthly octaves. Now we're at 15. And there's so much data from them in the product, but there's no AI plan or AI strategy. And so if you could convert this to be an AI business, that would be super interesting. And so for me, AI in the product was always a big reason why I came here. And I think it's been very good. And we can talk about that in a minute.

• 3:01Speaker 01

  But then I met with a mentor around maybe six months into taking this job. And I said, hey, this is a strategy that I'm going to go after. My hunch is we're going to need like 300 engineers to do this. And he had just left a job as CEO of a very large tech company where his access to what was coming from a lot of other companies was much ahead of everybody else. And I'm like, oh, no, you won't. And I'm like, what do you mean, no, I won't? It's like, I had just finished this tour of like Microsoft and OpenAI and Amazon and what is coming down the pike. And you're going to do all that with about 100 people? And I was right and he was right. I'm doing all that with about 100 people, but without AI coding, we would have had to have about 300 people doing the stuff that we are doing.

• 3:44Speaker 01

  So we've fundamentally transformed how the company is run internally. AI is now in everything that we do. And it's really incredible to watch that change and transformation. And for somebody who's been building software for like 20 years, the amount of stuff you can get done in such short amount of time is really incredible. Never in my professional life has the challenge been, hey, we don't have enough projects to work on. It's always been, I don't have enough engineers to do the work. The engine came to our Q2 planning meeting in March and said that they don't have enough work, which is like an insane thing to think about as a technology organization. And the reason they don't have enough work is because we don't have enough product people

• 4:29Speaker 01

  inside the company to go after all the projects that we want. So we've kind of flipped where the shortage is. It's not on engineers anymore. It's on the product side, partly because the product AI has not yet caught up to where engineering capabilities are. And then in the product, we are slowly going through the entire product and changing how the product operates with AI in mind. Initially, we are starting that at more premium features levels. So we're launching a new tier that is all AI-focused. And it's going to be fairly expensive for a small segment of users. I call that our kind of like roadster in the Tesla view. And then over time,

• 5:13Speaker 01

  we'll kind of democratize it down to a Model 3, where, you know, everybody gets some of those features. It's probably a two-year journey. Because fundamentally, all consumer products are going to have to change how they operate in an AI world, not just from functionality point of view, but also what they look like. And that journey is actually a really fun thing to be watching in a product that started out as a mobile first product. It was like one of the very first mobile products. And now we get to be one of the very first AI products. And that's really fun.

• 5:44Speaker 02

  So let's talk about internal work first before we talk about the product. What are some like concrete examples of things that have changed, you know, given maybe other companies that you've worked at or run versus now?

• 5:53Speaker 01

  So engineers no longer write code by hand, right? They're not typing code. And I'm saying not at all, but that's not the job. The job has fundamentally shifted from I write code to I manage agents that write code or synthetics, whatever you want to call them. So a lot of it is around architecting the work that needs to get done and giving it to these agents that then produce it. And then you're bringing all that work together. So in effect, every single engineer has become an engine manager. Because a lot of the work that they're now doing is more like what an engine manager would do previously by taking a big piece of work and assigning to a bunch of engineers and laying out what would need to get done.

• 6:36Speaker 01

  So that transitions basically happen fully. There are still a few pieces of the Grindr codebase where we cannot let AI do work because the codebase is old and we need to make it kind of re-architected for the AI world. That's getting finished now. But, you know, other than that, almost everywhere AI is working. The next phase is to actually turn these agents to be a lot more agentic in what they do. So go to a world where it's not just that you assign these pieces of work to the agent, and then the agents do it, and then you bring it together, but rather just give it the broad product requirements. And then the agent figures out what is the work that needs to happen

• 7:21Speaker 01

  for that work to get done and then produces code for that. Now, it's already starting in a lot of ways. So for example, I got an email or I got a message today on Slack from our head of engineering saying that one of our senior engineers got a message over the weekend notifying him of a bug that had just been filed. And this was the kind of bug where like it was not a mission critical bug. It could have sat out there for many months and not been fixed. Instead, he told one of our coding tools, in this case, Devin, that's built by a company called Cognition, that go take a look at this bug. So then Devin looked at the bug,

• 8:05Speaker 01

  recreated the bug to make sure that it was actually real, wrote the code to fix the bug, and sent this engineer a message telling him that the work was done and ready to be checked in. Before he finished walking his dog, he had gotten the message while he was walking the dog. And this was on a Saturday. So now the AI is not just like doing assigned work or like go fix it. It's actually like figuring out what work needs to get done and then doing that work. That's the next big transition in AI coding, where you will actually be managing like synthetic employees that are doing the work with you, alongside you, which makes each engineer way more productive. But beyond productivity, it's the fact that you couldn't have hired

• 8:48Speaker 01

  these many engineers like this, right? Constrain on software historically has never been, I don't have enough money to hire the talent I want. It's been, I cannot find the talent that I want to hire them and then have the productivity or the output that I want from this. AI is kind of solving that. And in my shareholder letter last week, I called it, it's like creating air on Mars because this is something that previously just was not theoretically possible. And when I listen to things like what I just described, it is a little bit like science fiction, right? I don't know if you're a Star Trek person, but like, it's kind of like, hey, computer, like, go find this problem and fix it. Like, in effect, that's what's going on. And we're not actually like living it.

• 9:33Speaker 01

  So in engineering, the tools are so advanced that this is all happening. We are not yet finding that the tools are quite there for non-engineering. Even product and design tools are behind where you want them to be. I think they'll catch up, but they're probably running a year, year-plus behind. But once the tools on the design side and the product side catch up, I think you'll start seeing that the job between an engineer, a designer, and a product manager collapses. Because a lot of what a product manager or designer does, an engineer will be able to do. And a lot of what an engineer historically has done, a product manager and a designer will be able to do.

• 10:18Speaker 01

  We already have one team on Grindr that is a very small team. It's four people working on a brand-new kind of what we call expansion bet. They don't have an engineer on the team. And you know, the PM is quite technical. He used to be an engineer. The designer is, and the product person is quite technical as well. But they're just writing all the code themselves. And this product has in-app features and out-of-the-app features. And for the in-app features, like they're on my phone in my app. And an engineer never wrote that code. It was a totally new engineering team that's produced it, that's working now. That's a special team that's exceptionally good and, you know, but it's an example of what the world is going to be like.

• 11:03Speaker 01

  And to me, that's a pretty incredible transition where the ability to build a business from scratch fundamentally changes. The amount of people you need to build a business goes down. And the capabilities that you need also fundamentally change as well. I think outside of the technical orgs, like in finance or in legal, you are seeing similar transitions. Like I know that our GC basically has told all the outside counsel that their bills have to come down massively because so much of what they do can be done with AI now. And so I think you're seeing a huge change there. In finance, same thing, you know, you're seeing a huge change there as well.

• 11:49Speaker 01

  I know that we significantly renegotiated our audit costs in part because of AI, because so much of what happens in audit can now be automated with AI as well. And so the changes in the organization are pretty massive. And I mean, as a shareholder, you should love them, right? Because it makes the business so much more efficient. I'm super proud of our like roughly 2.5, 2.75 in revenue per employee end of last year. I thought that we'd actually go down a little bit this year because we need to hire more people, but now we're actually going to go up. Meaning the dollar per employee is going to be higher than it was last year because we are hiring way less people this year than we had intended to hire. Because the team we had can do all the stuff that we had wanted to do.

• 12:34Speaker 02

  How would, has it changed what you do on a day-to-day basis? Like, do you have agents that are running? Do you have certain systems? Are you writing code?

• 12:42Speaker 01

  I don't, I don't write code. I, um, my job has, well, my job hasn't changed, but the way I work has changed. I think one of my big challenges historically, the CEO has been that I have a lot of stuff going on in my head, but I don't have the time to share that all with everybody else. Because there's so much day-to-day stuff to do that you don't have the luxury of time to do that. That's less of an issue. I don't think it's been fully solved for me, but it definitely has been solved to a large extent. So for example, there's something really exciting that we're working on that is not public yet. If that happens, it's going to have implications across the business.

• 13:26Speaker 01

  And so I had a bunch of thoughts about that. I was going to a wedding on Saturday from Manhattan to Queens. And in the car, I voice recorded a lot of my thoughts in a fairly disorganized manner. But ChatGPT, that my instance of ChatGPT knows so much of how I like to say things in writing that it can actually take my very disorganized thoughts and turn it into a memo. And so then I took the transcript of this and sent it to ChatGPT in the car still and said, hey, can you take this and create a much better memo out of it?

• 14:09Speaker 01

  Now, I have to like be very specific in what I want. I'm like, hey, like make this be all George talk. Remove all of the kind of corporate speak bullshit that you tend to add to what you produce a lot. And the end result was, you know, a memo that was probably 70% done. And then with one or two more edits, it was 100% done. So I was able to get that out to my team, you know, with about a one hour's worth of work, which otherwise would have taken me probably four. But because I don't have four hours, it would probably just never gotten done. And then I would have had team running off the stuff where the clarity around why I wanted them to do all these things was going to be far less. So I think what AI has done for me more than anything

• 14:53Speaker 01

  is it's allowed me to be way clearer in the expectations that I set for the team and giving them the rationale for why I set those expectations, which I think has been a very big improvement in my qualities as a CEO. I, you know, can't really compare before to now because it's such a big change. I've not yet gone to a place where I have AI like do things for me right away without me telling it what to do. Could I do that? Probably yes. And there are some people who are doing that. I'm a little bit more cautious for right now. As I, for example, like I don't have a read my email and try to like manage which emails should be read and which emails should not be read. Is that probably doable?

• 15:37Speaker 01

  Yes. Will it get there in a year? Probably. But I'm a little bit hesitant today.

• 15:43Speaker 02

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• 17:11Speaker 02

  Check out Figure using my link below or go to figuremarkets.co/pomp. Yeah, it is kind of this weird thing of peace of mind versus efficiency. And I catch myself sometimes, I know AI could do some stuff, but like if it misses one really important email, I'm like, it's actually not worth the efficiency gain. And so I will do other, I use Superhuman, I don't know what use, it's like an email client, but I'm pretty fast with it. I've been doing it for a long time. And in a weird way, I actually get a bunch of emails that I'm not going to respond to. But it's a data point. And if I see the same theme three or four times and then somebody that I know or trust tells me about something, I'm like, hold, wait a second, pattern recognition. Three or four people emailed me about this theme

• 17:55Speaker 02

  that I have no interest in talking to, but like now somebody trusted. Okay, I can triangulate. So in a weird way, it's almost like being in the flow.

• 18:03Speaker 01

  Yep.

• 18:03Speaker 02

  Has some value.

• 18:04Speaker 01

  Yeah, things that work for us, we want to continue doing. Like I, so I don't use Superhuman or any one of those clients. I'm still a Gmail person. I've been a Gmail person for a long time. I kind of know what I'm doing there. And, you know, could I switch to something else? Yes. But is that going to take some brain power for me to do? Also, yes. And I don't like want to go through that yet. But I also know that my current workflow on ChatGPT, so I don't, I don't use Claude, and you know, there's reasons why. But my current workflow on ChatGPT is not ideal. There's like ways I can do that it's better, that actually would save me time. And so I just need to make that mind shift.

• 18:45Speaker 01

  My hunch is that it's going to be like next Christmas when that happens. Because that's like the logical time when those kinds of things happen. But like I know what needs to get done, I just haven't gotten there yet. And so I am, you know, probably top 5% most forward in this regard. As like an executive, but I'm not 1% most forward.

• 19:06Speaker 02

  Why don't you use Claude?

• 19:10Speaker 01

  This is gonna be pretty controversial, but I view Clot as crack that I wanna get off. I want the company off.

• 19:15Speaker 02

  Why?

• 19:16Speaker 01

  I was outrageously taken back by the choices that they made about working with the DOD. I believe that as a gay man that enjoys every freedom that a human being can now enjoy, that is only possible because America is what America is. And part of that is that we elect people to be in office and those people get to make decisions about how to protect us. And I might not like who is making the decision today, but I like some other people who make those decisions and I am fortunate enough to be able to vote on who is in that place and so does everybody else in this country. And a private company doesn't get to decide how we secure ourselves.

• 19:58Speaker 01

  And so the idea that we don't trust our leaders enough to make those decisions is totally contrary to the foundations of our system, which in effect I view as a declaration of war on those systems. And I think this is by far the greatest thing that's ever happened to mankind, meaning America. And I just had a very revolting reaction to that. And I think as a gay business that in particular benefits from and should be appreciative of the freedoms that we afforded in this country, it is doubly problematic.

• 20:27Speaker 02

  Do you feel like the legalization of gay marriage, all of this stuff that has really evolved over time? You know, when you and I first met a couple of years ago, one of the things that we talked about, which in fact, when I brought this up to you, I'd heard this from other people, but I didn't know how legitimate it was, was kind of this like gay discount, right? And the gay discount was in the stock price. And the way it was originally explained to me is, you know, a bunch of heterosexual male portfolio managers who don't want to go to their investment committee and say, we're gonna buy into the gay app. And they wanna, you know, people give them shit or, you know, whatever the thing is. And so when I first heard that, I was like, that's an arbitrage. Like it's undervalued compared to where it should be or whatever. When you and I first started talking about it, though, you had a very kind of unique

• 21:10Speaker 02

  view as to, you know, does it exist or not? And like, what will change or not change about it? So maybe talk a little bit about this, like gay discount.

• 21:17Speaker 01

  So I a hundred percent guarantee it exists because I've had investors literally show me their financial models for Grindr, all the way down to like what their projection of share prices per, you know, based on where EBITDA is, et cetera. And then they add like Grindr discount line to it and it gets you to a different number. I've had two different investors independently show me models like that.

• 21:40Speaker 02

  Oh, interesting. So they literally have like a line item baked in, which is like the gay discount.

• 21:44Speaker 01

  Yes. Because and I

• 21:46Speaker 02

  So it definitely exists.

• 21:47Speaker 01

  Yeah, so it definitely exists because like I literally have people who own the stock tell me that they're modeling it out this way.

• 21:54Speaker 02

  How big was the discount, do you remember?

• 21:55Speaker 01

  Twenty-five percent.

• 21:56Speaker 02

  That's big.

• 21:57Speaker 01

  It's a lot. I mean, like, yeah. And, and to be honest, like that's roughly where I think we trade versus where we could trade, right? Like I And

• 22:07Speaker 02

  So those two investors, by the way, it's like they're the ones dictating the market.

• 22:10Speaker 01

  I don't think they're dictating the market, but I think it's like, and they're very supportive investors, I'm not.

• 22:15Speaker 01

  So I think it's definitely there. I think there's a combination of factors. I think it's number one, there's a lot of historical brand debt associated with Grindr. And I've had business partners, banks, investors, people who wanna reach our audience and wanna buy ads, all raised this as an issue that, hey, I don't, you know, when I go and search for stuff, stuff that pops up is not that positive. Now, I think that has fundamentally changed. I think we have been very intentional about telling the world what Grindr is all about and telling our story. And I spend probably more time than an average CEO doing that because we have this debt issue that needs to be addressed. And I think we have by and large addressed that.

• 22:59Speaker 01

  And, you know, I think what we did with Madonna this summer was a perfect exemplification of that. The fact that probably one of five most famous people in the world would come to you and work with you to launch her album, kind of saw, speaks to maybe there's not as much of a, you know, debt on, on brand anymore as there was three years ago. But there was definitely there and that was having an impact. I think secondly, because most of the things that you invest in on the consumer side, you can go and use those products. And, you know, if you're a Snapchat investor, you use Snapchat. Or if you're a Facebook investor, you use Facebook products, et cetera. With Grindr, most people who are investors don't use Grindr and they don't have employees who use Grindr.

• 23:44Speaker 01

  I think they kind of peripherally know that Grindr is out there and they have friends who might be on Grindr, but like it's kind of not discussed frequently kind of thing. And so there's a lack of like knowledge and the lack of knowledge leads to them not appreciating how embedded Grindr is in gay men's life. Right? Like, I mean, and a gay man who uses Grindr, which is a very large percentage of the US male, gay male population, is on Grindr for over an hour a day. It's like, you know, you sleep seven hours, you work nine hours, you got eight hours left and of that, one of them is on Grindr. Like it's a huge portion of people's lives. And, you know, that appreciation, I think, is lacking among investors.

• 24:29Speaker 01

  So that's, I think, the second reason why. And then the third one is, yes, there is a little bit of like unease. Hey, I'm going in and telling my older partners, I'm making this investment. And that ties back to this like reputational thing, but it's a little bit more narrow. But I do think that us telling the story really can help, right? We want people to think of Grindr as, hey, this is the kind of thing that my grandson's on and if he's on it, that's totally okay, rather than, hey, this is this product out there that is just for hookups. Grindr started out as a hookup product, but today 50% of all existing gay relationships in the US originated on Grindr.

• 25:13Speaker 02

  Wait, wait, 50%?

• 25:15Speaker 01

  Yes.

• 25:15Speaker 02

  All existing gay relationships started out on Grindr?

• 25:18Speaker 01

  Yes.

• 25:19Speaker 02

  That's a huge number.

• 25:20Speaker 01

  It's a, it's a massive number. So, I mean, you can talk about hookups all you want, but of all long-term relationships in this country among gay men, we resulted in, we're a source of half of them. So we are very much a relationship product as well. I mean, even go and survey gay men, every single one of them will tell you, yeah, I have at least three friends that I met on Grindr that I do all this other stuff socially with, that has nothing to do with, you know, romantic connections and whatnot. So there's that piece also. So we need to be able to broader understand the breadth of what people do on Grindr and why they are on it.

• 25:57Speaker 02

  Now, you all obviously have the dating component or the relationship component, but you started to expand. And the area that I think is, is very fascinating is the health tab or the health center that you guys have.

• 26:09Speaker 01

  Yep.

• 26:09Speaker 02

  Talk about, how did this come about? And when people think of Grindr, they don't exactly think of health. That's like the first thing from a brand perspective.

• 26:16Speaker 01

  Grindr is as much a public health company as it is a connections company. And I think over time it's gonna be even more so. So

• 26:23Speaker 02

  Cause you've guided also that the healthcare revenue or the health revenue was likely to continue to grow and at some point become more than 50%?

• 26:30Speaker 01

  Yeah, I've said, I've not given any numbers on that, but I think that health revenue could frankly have a business that's bigger than the core Grindr business. And partly because we would then be able to give, you know, kind of integrate those two things together so people could get Grindr features while they're on our health products, et cetera. We already do that. So if you subscribe to Grindr, Woodwork, which is our ED medications, you can get Grindr Unlimited for, for free.

• 26:55Speaker 02

  Hold on, go back for a second. What is the ED medicine?

• 26:59Speaker 01

  It's called Woodwork.

• 27:00Speaker 02

  Woodwork, alright. And it's a very popular product in the health space.

• 27:03Speaker 01

  I mean, it's a good product. It's ED medications. Compounded E medications. But the, you know, so for gay men, health is a pretty big deal. I think for anybody who grew up during the HIV epidemic, it's even bigger deal. But even post that, like you are taught from the very beginning that making sure that you avoid STDs is a really big factor and what you do about them matters as well. And Grindr has always played a really big role in that education to the user. So for example, you know, PrEP is a set of medications that you can take to prevent HIV from, you know, from getting HIV, even if you have unprotected sex with somebody

• 27:48Speaker 01

  who has HIV. PrEP had been around for quite a few years and was not really taking off in the user base until Grindr started to ask people on the app if they're on PrEP or not, which was probably the single most important thing in the kind of post-discovery of PrEP, for PrEP to take off. And most public health people will kind of tell you that.

• 28:15Speaker 02

  So back to us, you guys have an app.

• 28:17Speaker 01

  Yeah.

• 28:17Speaker 02

  People go on and they can use it, they use it for the dating, connection, relationships, et cetera. You have a health tab essentially that people can go, they can go get what I would consider more like pleasure type

• 28:28Speaker 01

  Yeah, I call them performance medications.

• 28:30Speaker 02

  Performance medications, okay, there you go. But then also there is like preventative healthcare and those types of things. So it's kind of like, in a weird way, offense and defense in the health.

• 28:38Speaker 01

  A hundred percent, yeah. And we don't yet like allow, we don't yet sell you a PrEP medication. We send you to a partner to do that with. But for all our partners that do PrEP, they'll all tell you that Grindr is by far the best source of, you know, customers. And so that piece of that vertical of like HIV prevention and STD prevention is a huge opportunity from the half of New York and I think we'll, you know, do more there over time inevitably.

• 29:07Speaker 02

  Do they trust you because they think that you guys are the best at health? Or is it because they feel like you understand them best and you're the trusted brand that then can route them to the right partner?

• 29:16Speaker 01

  I think it's because we understand them better.

• 29:18Speaker 02

  Yeah.

• 29:19Speaker 01

  I mean, look, I'm, you know.

• 29:23Speaker 01

  I'm very open about being gay. I am married to a doctor. So I don't need a gay doctor per se because I have one at home. But I wanted my GP, my general practitioner, to be a gay doctor. I could not find a gay doctor in the Bay Area.

• 29:39Speaker 02

  Interesting.

• 29:40Speaker 01

  Because there's a lack of them. I had one at Stanford and then he stopped seeing patients because he was just doing research. And then I was like, I don't have one. And it was a whole process to try to find one. But like, a doctor doesn't carry on his sleeve that I'm a gay doctor, right? Like, the one I had happened to work at the LGBTQ clinic at Stanford, so more clear. But like, a random general practitioner doesn't.

• 30:04Speaker 02

  Maybe there's a business opportunity.

• 30:06Speaker 01

  There's a huge business opportunity because like, if we could figure out a way to aggregate gay doctors and then connect our users to those gay doctors through telehealth, it's a huge opportunity. But I'm not unique as a gay guy who wants a gay doctor. Like, there's stuff I want to talk to him about that explaining to a straight doctor is more work. And I have a very good doctor now, like, he's totally fine. I'm not being negative about it. But there is a little bit of a cringe-ness going on in your mind when you're talking to him about some of these things that you wouldn't have with a gay doctor. And I think most gay men would agree with that kind of thesis.

• 30:46Speaker 01

  And so I think because we are a gay company and we understand the user, we can do things for them in the health side that people just, you know, appreciate and they trust us as a result.

• 30:58Speaker 02

  I mean, it's just when you understand the user and you build things that they want, whatever.

• 31:01Speaker 01

  And then there's another piece of it, which is like, this is in the US. Now, there are numerous countries where we operate where there's literally no access to gay health information online in that language at all, right? Whether it's in Arabic or in parts of India, et cetera. And we maintain this global health center. That's more for, like, we don't make any money or not. It's nonprofit reasons. But people in many of these countries, they literally only can go to Grindr to access that kind of a health information.

• 31:31Speaker 02

  So you also told me there are certain regions where being gay is not like in America, right? And there's obviously...

• 31:38Speaker 01

  Sadly, a lot, big part of the world.

• 31:41Speaker 02

  But when you guys enter a market, all of a sudden, when there's people who have access, there's people who feel like they can, you know, go and they can use it, whatever, build a community, et cetera. How do you prevent it being used from a targeting perspective as well?

• 31:55Speaker 01

  It sadly is. I think, I joined Grindr's board before I became CEO. My first board meeting, there was a big discussion topic on do we enable Grindr again in Iran or not? Because it had been shut down because of your sanctions. And then for a while, you could get it back on. And so we were getting all these requests from local NGOs in Iran saying, can you guys please come back to Iran? Which, like, in a way, a crazy topic for a board to be talking about. And obviously, you're going to make no money in Iran. So you're doing it purely as a, like, not-for-profit, community good kind of aspect. But the message from these nonprofits in Iran was, we would prefer to have the risk of the government using it to honey trap people

• 32:38Speaker 01

  than to not have access to a best way for us to be able to connect to each other because there's no alternative.

• 32:43Speaker 02

  Interesting.

• 32:44Speaker 01

  And you hear the same thing from people in virtually every other country where it is illegal to be gay and Grindr still operates.

• 32:52Speaker 02

  It's a bit like, I'll take my chances.

• 32:53Speaker 01

  Yes, because I have no alternative and all my alternatives, like, are even worse. And so, yes, like, one of my worst moments as CEO was three years ago when we got a message from a nonprofit in Egypt that the local police in Egypt had gone after a gay party. At that party, they arrested a bunch of gay men, confiscated their phones, and when using those phones and the app on Grindr to honey trap more people on Grindr. And, you know, so number one, we are like, okay, what do we do about this?

• 33:36Speaker 01

  We actually started, we stopped people from being able to create new logins into Grindr in Egypt at the time. And then number two, we started a message every five minutes to users saying, hey, we know this is happening. You got to be super careful in who you talk to. And for now, probably you don't want to meet up anybody unless they can prove to you that they're actually real. And that was, that kind of tampered things down. But it was really awful for me because, like, I mean, being in Egyptian jail would be awful, no matter why you're in jail. But if you're a gay man in jail and you're in jail because you were arrested as a gay man, it's like infinitely worse.

• 34:17Speaker 01

  And what made me really upset at myself at the time, and I'd just only been at Grindr for like nine months at this point, if that, was we didn't have anybody to call to help us in DC. So that was my big aha moment, like, hey, we need a totally different level DC operation because the good thing is that there's actually a ton of people in Washington who would want to work with you because our users are a big part of their constituency to help fight things like that. And so now we do have a DC operation. We have a great team in Washington, very bipartisan, and able to accomplish a ton of really great stuff because of that event. Because I was like, this is not acceptable. I'd like, I don't know who in Washington to call to try to get members of Congress

• 35:01Speaker 01

  or people in the administration to, you know, push the Egyptians to stop doing from what they're doing. And I don't have to be loud about it, but behind the scenes, we can have that impact. And so unfortunately, this does happen. And, you know, there are things we can do to prevent it or to reduce it, but we cannot prevent it, right? Like, we cannot control bad governments and how they're going to behave.

• 35:22Speaker 02

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• 36:48Speaker 02

  you've told me that they're overeducated, very high-income earners, which I don't think I quite understood.

• 36:55Speaker 01

  So, yeah, gay men are broadly speaking overachievers, right? And some of this is like literally the challenges of growing up gay and people not accepting it. Then you channel it into, hey, I'm going to show you what I can do. And so Grindr user demographic is significantly wealthier than average American and significantly more educated. So gay men have two X the rate of PhDs in America than straight men, two X the rate of MBAs, two X the rate of JDs than a straight American. A gay couple earns about 2.1X more in annual income than a straight couple. And then their disposable comes even higher because many of them don't have,

• 37:38Speaker 01

  or most of them don't have children, which is like your single biggest expense, right? As a household. And so they do have very high disposable income, which then leads them to be able to spend that money on disposable goods, et cetera, et cetera. We also have a very young demographic on Grindr. So 46% of Grindr users are in the 18 to 29 cohort. We don't allow people under 18 to be on the app. So it's an 18-plus app only. And, you know, we don't have the challenges of the Gen Z generation that a lot of the other dating products do because Grindr is almost like a rite of passage. Like, you turn 18, you're either out or you're trying to figure out, are you out? Or, you know, maybe buying, you're trying to figure out where you're going.

• 38:23Speaker 01

  Grindr is like the logical place to go join to be part of this, like, figuring out process. And so we attract the 18-plus-year-old, younger men into the app through that and then they kind of stick with us as they age.

• 38:36Speaker 02

  And travel has become a huge part of the business for you guys.

• 38:39Speaker 01

  Travel, yeah, we don't make any money on travel features yet. But as a product, Grindr is used exponentially more when people travel. And one in five Grindr users is traveling any given week, which is like a pretty incredible thing.

• 38:52Speaker 02

  That's crazy.

• 38:53Speaker 01

  Yeah, it's totally crazy. It's probably because a lot of people will use Grindr when they are traveling and not when they are at home, right? So we, we have a lot of users who, they might be in a relationship already. They don't use Grindr that much at home, but when they're on the road, they use Grindr a lot more. And then there's a set of people who are not in relationships that, you know, are traveling in part to meet people in new locations. Because one of the fundamental challenges of being gay is that you're only 5% of the male population, right? So in most places outside of New York City, there's not a very large set of people in any given geography, right?

• 39:38Speaker 01

  Even in San Francisco, probably gay men are closer to like 8%, 9% of the male population. It's still only 50, 60,000 people.

• 39:47Speaker 02

  That's not what I read in the headlines. I heard that gay mafia is dominating the...

• 39:50Speaker 01

  Well, gay mafia is, yes. Gay mafia is a thing. We can talk about that separately. But I think just in total people, it's not there. And so people then travel to meet more people, which I think actually, so one of the things that we are noticing, which is totally predictable from where the world was and is going to, is a lot more gay men today want to marry. So when you survey gay men, even outside of the app, 50% of them say they want to be married.

• 40:18Speaker 02

  Interesting.

• 40:19Speaker 01

  Which is a huge change from where things were. 25% of them under 35 say they want to have children.

• 40:26Speaker 01

  Which is like not at all. And when I would say that I wouldn't have kids when I was sub thirty five, I was like literally one in a hundred. Like I was this weirdo guy who wanted to have kids and I was, you know, obsessed with the idea of having kids and I do have kids now, but, uh, you know, back then it was not something that people thought about. That's fundamentally changed. And Andrew Sullivan, who is one of the architects of gay marriage, he would make this case back in like nineteen ninety's that yes, if we allow gay marriage, then a lot more gay men will want to be married and a lot more gay men will want to have children, which is exactly where things are going to now in that younger, you know, eighteen to thirty five cohort. So that's a huge opportunity for us, obviously, because we have the place for people to meet. But because you're not, demographically, you don't have a lot of people in any given location, you need to solve that broadly, like you

• 41:11Speaker 01

  will need to help people find each other, not just in the place where they live, but outside of that.

• 41:16Speaker 02

  When you think about, just take children as an example, do you think that there's ways for you to eventually get into those types of verticals? So I think very much of you guys have like essentially a derivative business model, right? Like where does the, where does the concentric circle kind of stop and you're like, okay, there's certain things we just will probably never be able to get into?

• 41:36Speaker 01

  Well, I don't know if we get into children and family creation as a business, but I think it is our massive obligation as a company to help ensure that the laws in this country are such that it's easier for gay men to have kids. So one of the things we're really actively working on from public policy point of view is to get all surrogacy expenses to be considered medical expenses, which today they are not.

• 42:04Speaker 02

  And that would be for gay men?

• 42:05Speaker 01

  Of course, for anybody. For straight, and by the way, most people who use surrogacy are straight people, but for gay men who have biological children, surrogacy is the only way to do it. And today, fertility costs, if you're a straight couple, are viewed as medical expenses, the surrogacy piece of it are not. But if you're a gay couple, none of them are because there's IRS doesn't regard them. It's a pretty simple change. But if you did that, the cost of surrogacy and having children for gay couples goes down by thirty to fifty percent, depending on where they are in the income bracket, which like is an incredible thing, right? Because the single biggest deterrent right now to gay men having children is the cost of it. Right now, like we're really happy with the Labor Department

• 42:50Speaker 01

  just recently issued new guidelines for insurance coverage for IVF and those guidelines were written in a manner in which surrogacy situations would be included, which is like a huge plus. And one of the things we did at Grindr in the last couple of years is we actually cover costs of fertility care for up to three hundred thousand dollars for any Grindr employee, which is the second best fertility benefit available. Nvidia has an unlimited benefit.

• 43:21Speaker 02

  They got a lot of money.

• 43:22Speaker 01

  We're not worth five billion dollars and so, so five trillion dollars and so, you know, we have a way to go, but I think it's amazing that they have that. And it's like a really massive statement, I think, from the leadership at Nvidia for doing that. But my goal was to be like as good as we could be. And so basically we cover the entirety of the cost of surrogacy, including the taxes that are paid on those expenses for, for a Grindr employee, which has led to then more people at Grindr having kids, which is incredible.

• 43:53Speaker 02

  When, um, when you think about the entire business, right, and investors are evaluating it, what are like your two or three talking points as to why you think that not only do you guys have a good business today, but kind of the best days are ahead of you?

• 44:06Speaker 01

  So we today are monetizing just one use case of what happens in the app and we've done that very well. I mean, our revenue has grown from one ninety five in twenty twenty two to five forty guidance for twenty twenty six.

• 44:21Speaker 02

  Five, uh, hundred million.

• 44:23Speaker 01

  A hundred.

• 44:24Speaker 02

  Five hundred.

• 44:24Speaker 01

  Five hundred forty, yeah, a hundred ninety five million to five hundred forty million. So, you know, very good growth with insane margins, like forty plus margin, EBITDA margin every year.

• 44:35Speaker 02

  And that's monetizing the connection relationship?

• 44:37Speaker 01

  That's monetizing just the connection relationship use case.

• 44:39Speaker 02

  Hookups.

• 44:40Speaker 01

  We, a hundred percent, no question. Hookups are a huge part of gay life and they're not going anywhere. And then, uh, and frankly, we actually are doing things to make them easier because we built this whole product right now, which is for that. Like that's not, that's the kind of key to everything that we do and is going to, we have to be really good at it. But

• 44:59Speaker 02

  Oh, you're selling sex and love? That must be a horrible business.

• 45:02Speaker 01

  Yeah. Um, but there's so much more that we can do and just health alone can be a massive driver of growth and we make virtually no money in health today. But as we, well, because we just started. I mean, like this is all very new and woodwork is a way for us to like tiptoe into, hey, let's start doing health. And health is a regulated business. You got to learn a lot about it. We're doing that. And as we become more into it, there's been more opportunities. But I, you know, I give a three year outlook in twenty twenty four. We're now in year two of that three year outlook. We're ahead of schedule on that so far, but there's no reason we can maintain a similar growth rate kind of on a go for basis for about as long as I can kind of predict. So we feel really good about

• 45:47Speaker 01

  what's possible as we go into these expansion use cases and start monetizing them in the right way. Um, and then thirdly, I think the, the big thing is just the way this company's run. I mean, my general view is that most tech companies are way too bloated and have way too many people and could be run way more efficiently than they are. Frankly, they'll be run better if they're more efficient because less people is easier to manage. So Grindr had peaked at two hundred twenty five employees in December, January twenty twenty two, twenty three. Um, at that point, we had finished the year at one ninety five million revenue. Last year we had a hundred and sixty employees at the end of the year and we made, you know,

• 46:31Speaker 01

  four hundred thirty million in revenue. This year we're probably going to have like one eighty five people, maybe one ninety, and we're going to do five forty in, in revenue, right? So, um, it's insanely efficient business that can continue to be more efficient all the time. Uh, and AI is only helping that.

• 46:53Speaker 02

  So what do you do with all the cash?

• 46:55Speaker 01

  Uh, give it back to shareholders. Uh, we've bought a lot of stock back over the last, um, six quarters, I guess. Uh, we have a nine hundred million authorization. I think we bought six hundred million plus of that.

• 47:07Speaker 02

  And what like percentage of the company, what do you think that is?

• 47:09Speaker 01

  I think we've reduced it by like, I think we peaked at ballpark, not don't quote me on the numbers, but I think we had peaked at like, um, two hundred and thirteen million shares fully outstanding or fully diluted. And I think we're now at like one eighty five.

• 47:26Speaker 02

  Also pretty material.

• 47:27Speaker 01

  Yeah, we bought a lot of shares back.

• 47:28Speaker 02

  Yeah, okay. And so basically you continue to do that until you find something else to do with the cash.

• 47:34Speaker 01

  Yeah. But I mean, like, I think we can, there's nothing that I need to invest in. I don't invest it. Like, it's not like I have this like, oh man, I want to do X, Y, Z things and I don't have money for that.

• 47:47Speaker 02

  Literally leftover cash.

• 47:47Speaker 01

  Yeah, we invest in everything we want to invest in and we do all the things we want to do. And then we have, you know, in very strong profitability now. There are very few things on which people who hired me before Grindr was public were very insistent on, which was like, you got to keep EBITDA margins to be really high. I was actually a little nervous about that because I'm like, I think I'm going to need more people to do this stuff. But then it turns out that the inefficiency was so high that you could do a lot more. Now Elon, without knowing this, helped me a ton because when Elon did to Twitter what he did and nothing collapsed, I'm like, actually you can run these businesses a lot more efficiently.

• 48:25Speaker 02

  I think that enough, a lot of people don't talk about it. I think what they saw, what he did at Twitter slash X, they were, they were looking around on their rosters and they were like, oh, he did eighty percent, I don't need to do eighty percent, but twenty percent?

• 48:38Speaker 01

  Yes. And so we went, um, you know, we, right as that was happening and a few months later, I told the team that we need to come back to the office two days, two days a week. This was not like

• 48:48Speaker 02

  Two? Wow, you're, you're really hard on them.

• 48:50Speaker 01

  In twenty twenty three, it was twenty three, two days was hard. Um, and we lost, we went from two hundred and twenty five people to seventy.

• 49:00Speaker 02

  You had 150 employees that just said, I'm not going back to the office?

• 49:03Speaker 01

  Correct.

• 49:03Speaker 02

  Like, what was that, three fourths of the company?

• 49:05Speaker 01

  Yeah.

• 49:06Speaker 02

  Oh, my God.

• 49:07Speaker 01

  But I don't think I would have been willing to do that had I not seen what happened at Twitter. Because I'm like, well, Elon can run this business with, from 6,000 to 1,000, I think you went down or something.

• 49:18Speaker 02

  Did anything break?

• 49:19Speaker 01

  No, we actually grew like 30 plus percent a year.

• 49:24Speaker 01

  And obviously, EBITDA increased because we had less people. Now, I don't think you could continue running this business with 70 people. But that's why we're now, you know, going to end the year with like 180, 185 probably. But it was totally workable. What we did do is we kept our most important people and we kept people who were keeping the trains running. Because I had one engine manager, at one point, like right after we had gone public, I had a company at all hands. I said, hey, guys, like, this is not a nine to five job. Like, we expect more of you than that. And my general view is like, I've never had a job where I worked less than 50 hours a week. I think most tech companies expect people to work 45 to 55 hours a week on average. Some weeks 45, some weeks 55, it averages out to like 50 on average.

• 50:08Speaker 01

  That's not that bad, it's totally reasonable, given how well tech companies pay. But that's not what Grindr was, and that's kind of was my message, you know, like, this is not a nine to five job. And I got a message from one of the engine managers that night, telling me, George, I know you want us to work more than eight hours. But when I get my team working more than four hours a day, I'm being told that we need more headcount. And we don't have enough resources, which was a big aha moment for me. This is month, I'm like month four in the job, like, wow. So the inefficiency in the organization is really high, this is true, but everywhere else as well. And that's a huge opportunity for businesses.

• 50:47Speaker 02

  Did you hear recently, they said, woke one was crazy?

• 50:50Speaker 01

  I saw that yesterday.

• 50:52Speaker 02

  Right, like, that's basically how I think of a lot of the coming out of COVID work stuff.

• 50:56Speaker 01

  Yeah.

• 50:56Speaker 02

  Work one was crazy?

• 50:58Speaker 01

  Yeah. I mean, this is, but this has honestly been true in tech for much longer than that. That most tech companies are outrageously bloated because their margins are so high.

• 51:10Speaker 02

  They can hire.

• 51:10Speaker 01

  You can hire. And what people think about is like, you know, I need X new stuff done, let's get a new head for that. Versus of my five people that do similar things, how do I reallocate work to get some of this new stuff done? And when the business is growing 20, 30% a year, and the margin is as high as it is, it doesn't matter. Where I think the problem is that now the investors are going to expect better margins, A. And then, B, stock-based comp is not free. And I think we've lived in a world for 20 years where stock-based comp was free, but it's actually not. And that is going to, you know, that makes it harder to just hire more people.

• 51:52Speaker 02

  I think you're the first person to come in here and talk to me about erectile dysfunction medicine, the military, gay men. Yeah, cubs, right? It's why I enjoy talking to you so much. Where can we send people to find you on the internet and all the things you guys are doing?

• 52:06Speaker 01

  I'm mostly on LinkedIn, so George Harrison LinkedIn. I don't really have a big Twitter presence.

• 52:12Speaker 02

  Maybe we should change that.

• 52:13Speaker 01

  We're going to change that, and there's only so many things I can do at once. And as much as social stuff is important, you know, I've been kind of more focused on Twitter. So I'm on LinkedIn than X, but I do need to change that.

• 52:26Speaker 02

  What is your X handle?

• 52:28Speaker 01

  George Harrison, yeah. We do have a very large Grindr X presence.

• 52:33Speaker 02

  I'm sure you do.

• 52:34Speaker 01

  It's very high, but it's not very business.

• 52:36Speaker 02

  Is it graphic?

• 52:37Speaker 01

  It's quite graphic, yes. We have a, one of the, we have a very awesome CMO, who I found in the UK and brought him in, like, kind of once in a generation type of guy who like, understands business, but also understands what gay men want to see. And one of the things he's done is really invested in content creation. So we create a lot of social content, podcasts, TV shows, et cetera, and they're all really popular. We have a show called Hosted Travel, where one guy meets another guy on Grindr. From one location to another location, he then travels to this other location. And the guy that's local takes him around and shows him the city, and we record that and turn it into a show.

• 53:22Speaker 01

  Which is done very, very well. So as we-

• 53:24Speaker 02

  If you ever need talent, my brothers, they might be interested.

• 53:27Speaker 01

  Yeah, it sounds great, happy, happy to.

• 53:32Speaker 01

  So it's, you know, so a lot of the content on our socials is like that.

• 53:37Speaker 02

  Is that?

• 53:37Speaker 01

  But we have a lot of, I mean, Instagram, Grindr is very happy.

• 53:41Speaker 02

  Your next step?

• 53:42Speaker 01

  Oh, yeah. We have millions of followers on these platforms, right?

• 53:46Speaker 02

  You know, you keep describing it, there's a couple of guys who are like, I wasn't interested until now, but do I need to go look or not, right? All right, thank you for doing this, we'll do it again in the future. And I wish you the best of success as you guys continue building companies.

• 53:57Speaker 01

  Appreciate it, thanks for having me.