May 24, 2020

Tinder ex-Chief Product Officer, Ravi Mehta tells about pros and cons of working with Gen Z and about building dating apps.

Tinder ex-Chief Product Officer, Ravi Mehta tells about pros and cons of working with Gen Z and about building dating apps.

In this episode of Fundraising Radio, Ravi Mehta, the ex-CPO at Tinder tells about his experience in working with Gen Z and about building dating apps, he also had experience working for Facebook focusing on acquiring startups that were working with Gen Z users and we touch onto M&A subject here as well. If you plan to work with Gen Z this episode is a must.
Ravi's site: https://www.ravi-mehta.com/

In this episode of Fundraising Radio, Ravi Mehta, the ex-CPO at Tinder tells about his experience in working with Gen Z and about building dating apps, he also had experience working for Facebook focusing on acquiring startups that were working with Gen Z users and we touch onto M&A subject here as well. If you plan to work with Gen Z this episode is a must.

Ravi's site: https://www.ravi-mehta.com/


Transcript

This is Fundraising Radio and today as a guest speaker we have Ravi Mehta, the ex-chief product officer at Tinder. He also worked at TripAdvisor and many other great companies. And in this episode, we're mainly going to focus on his experience at Tinder because I hear tons and tons of pitches about those new great dating apps, that, I’m pretty sure will never take off and I'm getting tired of that. So I decided to make an episode with Ravi about how to differentiate yourself from competitors. If you're trying to create something in such a field as dating, what should you do and how can you stand out from that crowd? And of course, we're going to talk about Ravi’s experience at Tinder and in other companies you've worked.

So Ravi let's kick off by giving us some background on yourself and on the project that you're working on right now.

everyone, it's great to be here.

I'm excited for the conversation today.

so I'm Robbie.

I was most recently the chief product officer at Tinder.

I've been, in the technology space my entire life, I actually started programming, when I was nine years old.

back then there wasn't much to do on computers other than programming.

I started building, games, all through school and then into high school.

I started a game company in high school.

from there I actually joined, Microsoft and I joined at a time when, when I joined Microsoft they'd said, we're going to be making a multibillion dollar investment into games.

We haven't revealed what it is yet, but we're looking for people that have games experience. shortly after I joined Microsoft, they announced, that they were making an investment in X-Box. I joined the Xbox team is one of the first 20 or so people on the team.
I spent a lot of time thinking about X-Box live.

one of the things that Microsoft felt like you could do really uniquely within the video game console space was think about, the internet and where it was going, and really bring multi game, multiplayer gaming to, the next level, which is something that, Sony and Nintendo and the other players in the space didn't have as much, experience with.

I was there for about six years.

I worked on both the platform side on Xbox live as well as some of the content, that really made use of the Xbox is multiplayer capabilities.

from there I went to business school, I went to MIT Sloan for, my MBA.

afterwards I wanted to try something completely different.

I joined a small startup, focused on lead generation for the financial services industry.

The thing that really attracted to me that attracted me to that was, a opportunity to do something really small, to build the team, to help build the technology to work in a space that I'd never worked in, before.

we did that for about a year and a half.

Unfortunately it was around 2008 timeframe, so not a great time, to be focused on the financial services industry.

from there I joined, a friend of mine, Sean Lindsay, who's an entrepreneur in Boston, as well as Brian Balfour, who's the CEO of Reforge, to start a company focused on the social gaming space.

we ran that for about five years.

really interesting, space at a really interesting time.

we raised a lot of capital.

We we eventually sold that to a company called tap joy, on the West coast.

from there I went to TripAdvisor where I led the core consumer product team at trip.

during really interesting phase, in the company, TripAdvisor was newly rolled out from Expedia, so it had become its own, independent public company for the first time.

as a result, there were a whole set of strategic opportunities that TripAdvisor had available, that were not available when it was part of Expedia.

it was really interesting to work, at the intersection of various parts of travel, to bring a completely new model for travel, into being where TripAdvisor for the first time added the ability to book hotels and to book restaurants and to book, attractions.

it was really positioning itself, as an Amazon marketplace for travel rather than, just a, a review oriented, platform from, TripAdvisor.

I moved on to Facebook.

I felt like, having worked in travel, it was really exciting, but I felt like there was a lot happening, within internet and mobile that I didn't fully understand and wanted to get a better understanding of what was going on, particularly with young users.

I joined Facebook, it team focused specifically on teenagers and how they were using social media and how Facebook should, position their products, in order to make sure that they weren't losing engagement with teens.

we spent a lot of time looking at the entire landscape of what gen Z is using.

Think about thinking about how Facebook fits within that landscape.

I also spent a lot of time on the M and a strategy for Facebook within the youth space.

thinking about what, interesting acquisitions Facebook could make, in order to bolster its, physician with younger users.

one of the things that we did was we bought TBH, which was a fast growing social network for high school students.

from there about a year ago, I joined Tinder as chief product officer.

a lot of that had to do with the fact that I was, you're spending a lot of time really understanding, gen Z and Tinder's always had, a really good brand with gen Z.

one of the key things for the company is evolving the product in order to make sure that it's real estate up to date with the latest things, that are happening with GNC.

That's, that's a really impressive background.

I'm really happy that you're here on fundraising radio and that you could actually dedicate some time to participate on this show.

first I would like to discuss the key topic of the whole podcast, which is fundraising. you have raised, as you said, a lot of money for a gaming company.

Can you go in depth into how you were doing this because, it seems like you tell a lot with the gen Z and from my experience, investors don't really like gen Z as it's just, extremely unpredictable and also hard to my tie sometimes.

So how do you fundraise for that?

It's interesting cause I think that businesses that are focused on younger users as well as entertainment businesses, are things that VCs have a love hate relationship with.

there's some VCs that just don't understand the space and they worry about the dynamics of the space.

I think anytime we're doing something with younger users or you're doing something with entertainment, it does have a hit driven component to it.

VCs are already in a hit driven business.

you add in additional risk and sometimes it becomes too much for, a lot of VCs to want to take the risk at the same time.

really, you can see there's a lot of explosively popular and well monetizing businesses that have targeted younger users and grown from there.

Facebook being one of them.

Facebook started as a platform specifically for college students.

Snapchat started as a platform for teenagers and it has grown from there.

Some of the entertainment companies in the space now are some of the most valuable companies in the world.

You look at, Epic and Fortnite and the rate of growth on that business has really been staggering.

I think the first thing for people that are looking to fundraise within this space is to really filter out what VC is you're talking to.

There's going to be some, VCs that have a background in enterprise or stats or if you look at their past investments, they fit a certain profile where they can really understand and quantify the risk in a much more clear, and quantitative way.

Whereas quantifying the risk in entertainment and gen Z oriented products is a bit more of an art than a science.

what we want to do first I think is look at VCs that have made investments in the businesses that have a similar, dynamic, so that you're talking to the right people and when you get to the right people, you will find that there are certain VCs that really understand gen Z.

They've made investments in the space that made money in this space and they're looking for the next breakout businesses.

I think that's the first thing is to target the right venture capitalists.

The second thing is to think really deeply about your business and to try to mitigate out as much of the risk as possible.

There are definitely parts of building these types of businesses that are like, capturing magic in a bottle. that's just part of the dynamics of building things that are for consumers.

I think that applies to any consumer businesses, not just gen Z consumer businesses, but there are ways in which you can, mitigate that risk.

I think part of it is a big part of it is really figuring out what niche you're serving, and serve that niche really well.

Build something that is retentive with a small group of users and figure out how to scale it from there.

I think a lot of entrepreneurs make this mistake, especially in consumer of going too big too soon.

you have a product whose strategy is diluted across too many different market segments.

if you can create something that for a certain set of consumers is incredibly retentive and valuable, and from there that's a much better way to go, and in some sense that's what Facebook did.

They created a social network specifically for, Harvard students, not even college students. Got that to work really well and then figure it out.

What about that model they could scale, and create a pattern for across multiple different, universities and then across, users globally.

I think that's something that, consumer entrepreneurs need to spend a lot of time doing. Right, right.
here, I want to, that's great advice actually.
hopefully most of our listeners will listen to that before reaching out to investors.

here I want you to move on to your experience at teenager because that's probably one of the most interesting parts for me.

I never really talked to anyone from teams or from any other, big dating app, but that topic is really popular a lot.

A lot of startups are trying to build new types of dating apps.
they're basically wherever you can imagine.
It's out there, someone's real re trying to build that.
what do you think is the major issue with that specific field?
I think there's a couple of really, compelling things about the dating space. One the use case is very clear.

You know, what you're trying to do.

You're trying to get two people connected and into a meaningful conversation.

Even during Corona virus that hasn't changed.

people still, even though they're not meeting in real life, they still have this desire for connection.

I think one of the things that has surprised people about, Corona virus is that the online dating companies have done well.

that's because people want social connection in whatever form it can take, especially during a time of social distancing.

so that's one of the compelling things.

I think the other compelling thing about the dating industry, is that, if you can generate, that for people, then you can monetize it.

You have a business.
There's no experimentation that you need to do around.

how do I actually build a profitable company that's a dating company? The dating companies monetize incredibly well on a per user basis, and that's because they're solving a need for people that they're both willing to pay for and then there's precedents that they're paying for it.

there's a couple of really compelling things that I think, make dating businesses interesting for entrepreneurs. there's also a couple of things that make it really difficult.

I think the most, important one is that dating businesses, like a lot of other social businesses, have a really important network effect.

People aren't going to spend their time on 20 different dating apps.

They may use more than one, they're probably gonna use two or three, but they want to make sure that the time that they're putting into each dating app is really going to pay dividends in terms of the number of matches that they get back.

one of the Tinder, continues to be as popular as it is it just works.

people get a lot of matches and so they know if they put a profile on Tinder, it's going to help them meet new people.

Whereas if there's a smaller dating site that not a lot of people are using, then they know that they're going to get fewer matches.

I think the earlier advice about focusing on a niche before you focus on us on scale is really important in the dating space.

If you try to go head to head with Tinder or Bumble or any of these other dating products for, an entire region, an entire country or the entire world, you're just not going to succeed.

You're not going to have nearly the critical mass of users that you need in order to create a compelling matching experience.

what you really need to do is figure out what's the niche of people that you want to serve better than Tinder serving or better than Bumble or some of these other apps are surfing.

ultimately, if you look back at history, these apps did actually take that niche strategy.

Tinder served a very specific user in Los Angeles, that was young, that was single, that wanted to meet each other in a new way that was mobile forward.

and, built an initial experience that had critical mass with that niche and then grew from there.

so, it's really important for dating entrepreneurs to understand that it's not easy to create a dating site in part because the incumbent players have network effects at their advantage and you're somewhat, you're innovating into a headwind.

if they do decide that they want to do that, to be really crystal clear about who your first thousand users are, what you're solving for them, that the other dating apps aren't solving, and get to critical mass, get to a product that has product market fit with that niche before you try to scale.

Right? Right.

The advice is great and I think there is a lot of thoughts, food for those who want to deal with something in day nav, related fields.

here I wanted to ask you about how many people actually ask you to become their advisors.

because of your enormous experience in all those great companies, and specifically in Tinder home, how many requests do you get to, help someone with a question, get an introduction to someone at Tinder or just to become their advisor? I get it.

get a number of requests. I get a handful, every day.

I try with each one to actually read the class and figure out whether or not it's something where I can add of value.

I don't have time to take on a lot of, advisor roles, but often, if someone reaches out, I can point them in the right direction in terms of, some people that might or give them some feedback on their pitch deck or that thing.

it's definitely, it's nice that people are reaching out to me and seeking, advice.
I do, when I've got the time, I do love, talking to entrepreneurs and helping them with their businesses. I try to help out where I can.
it's definitely something that's difficult given time constraints.
Absolutely.
we'll get back to this topic layer here.
I want you to talk a little about your experience in mergers and acquisitions at Facebook.
how many companies did you acquire in while you're in Facebook? So Facebook doesn't make it.
a lot of acquisitions and I wasn't there for too long.

we acquired one company while I was there.
we also looked, we did due diligence across a number of other companies. I've also been involved with other due diligence work.
I did that at Tinder.
I did a significant amount of TripAdvisor.
We made a couple of important acquisitions at TripAdvisor.

you, I think that's one of, that's some of the experience that I look back on and it is, the most interesting for me in my career, in part because it does, when you're at a larger company, it does give you the opportunity to connect with entrepreneurs and see what's happening, within the market.

it also gives you, it's an interesting, exercise and thinking strategically about, when you take two independent companies and join them together, what are the synergies in the strategy and how can you make, the sum of the parts greater than, the whole.

so, I think that, those are things that I look back on as, being really interesting being learning experiences. I also think for entrepreneurs it's a very important thing to think.

maybe not from day one, but once you start to fundraise to think about what your exit opportunities look like for your business, and what companies you would want to pair with.

I think a lot of companies do start out with, we want this to be really big, we want to IPO.

it's hard enough to get a company to be successful in the first place, let alone, building a company that eventually IPOs is somewhat of a lottery ticket.

absolutely it's something that you should shoot for.

it's also worth thinking about, what are the M and a opportunities for your business and how does your company fit within an existing landscape.

I think that exercise can also be really valuable for entrepreneurs who are trying to refine their business model.

when you look at the incumbent players within the business, you can often find white space areas where you can innovate.

by thinking about, what an eventual acquisition would look like and what valuable, asset or capability would you bring to, an acquire.

that can often be an interesting, competitive or strategic exercise to do for entrepreneurs is they're refining their business model.

Right? Yeah, I think that's really a great exercise.

I personally would like to personally recommend founders sometimes to think like who can acquire you eventually because it just, first of all, it gives you some hope that you be acquired and saying we, it does refine the business model.

it's important, but I'm curious, how were you sourcing those companies at Facebook or treatment wise, advisor that you wanted to acquire? So how did you find that more? Did they actually find you themselves?

I think a lot of times companies, we'll have a thesis about a particular area that they want to invest in.

I was at Facebook, our thesis was around, investing in things that are, high retention, high engagement apps that young people are using.

that fit really nicely with the Facebook business model.

as a result, there were only a handful of companies.

If you, if you map out the space, it's probably 30 or 40 companies that fit into that.

so, those companies were known to us.

Facebook was not, looking at earlier stage at a point where it would be harder to actually know what the companies are.

also one of the advantages of Facebook.

Facebook does have, really good data science and market research and market, analysis capabilities, which can help you understand, what's happening with people in general, like what are people using on mobile.

So that was really helpful.

at, at TripAdvisor it was more of an organic process that one of the nice things about the travel space is it's a, relatively tight knit space with a lot of entrepreneurs that are repeat entrepreneurs in the space.

there's an interesting flow of opportunities that just comes from the network of having been in the space.

it's also an interesting space like dating, whereas if you can generate demand, you can almost certainly generate monetization.

oftentimes the companies that are doing really well from a demand, standpoint, even if they're not quite monetizing it, have a lot of buzz within the industry.

so, it's easier to find players, that way.

it's different than like what a VC would do in terms of their deal flow, or the opposite side for an entrepreneur because, the companies that you would be interested in have a higher profile than seed stage companies.

Absolutely. So that's true.

here I wanted to move on to the thing that I already touched on too real quick, but I wanted to go deeper in that topic.

it's specifically, successful founders and just, successful people in a specific field as a source of capital and advice.

you said that you advise plenty of startups, but do you invest as angel investor in those startups? I've done a handful of investments.
the, the investments I've done have been in areas that I know well, social or, or travel.
the travel businesses are going through a tough time right now.

the investments that I've done has really been something where it's less about, I think this is the maximumly efficient way to deploy capital and more about, I think there's a really interesting entrepreneur here.

I think there's a really interesting idea here and I want us to support it early on because the investments that I've gone have been, very early seed stage, ideas.

I think if I were to, and it's something that I've been doing primarily with the goal of supporting, the entrepreneurs and not thinking necessarily about managing a portfolio and maximizing the return, from the portfolio.

I think I would approach it differently if I, if that was the goal.

but I've really enjoyed doing those investments.

It's a great way to support entrepreneurs.

It's a great way to understand what's happening within the landscape.

especially for early stage company, kind of the right money or the right advice at the right time can go a long way.

Absolutely.
That's completely right.

I love when people invest in, team, and idea says I myself work for a venture studio and we invest in idea stage basically and founders because ideas don't really matter that much.

how do you choose who to invest in? And so when you get a, first of all, how do you source your deals to get mostly inbound or do actual reach out to yourself?

I don't do any outbound, so it's mostly inbound from people I know that we'll refer to refer me to people that are raising.

I think the point you make about investing in entrepreneurs and investing ideas is a really important one. at the end of the day, especially early on, good companies are gonna pivot.

the business that actually succeeds with them, is probably only has some minor relationship to the idea that they originally started out with.

And that's really important.

I think entrepreneurs who are successful, master the ability to test and learn to figure out what the market really wants.

the entrepreneurs that, I look for and I like to invest in, think about markets differently than everyone else.

so, I think ultimately there's a lot of, lemming like startup behavior in Silicon Valley where, there's something that's hot like chatbots and then everyone goes and wants to start a chat bot, but people aren't really thinking constructively about what customers really need in that space and what those businesses are going to look like.

Meanwhile, there's problems that people are having outside of Silicon Valley that are really real problems that need to be solved that may not be getting attention because, they fall outside the typical profile of a Silicon Valley entrepreneur and the typical problems itself, the valleys, the Valley solves for.

I like entrepreneurs that bring a different perspective to the table either because they know something different

than other people know or because their life experience, highlights and opportunity that a lot of other entrepreneurs wouldn't be aware of.

Right, right. Yeah.

a great example of that is actually a new guys here in Los Angeles who I think was doing something like drag clean for subscription, which is not a new idea, but it turned out that it was not present here in Los Angeles.

I think a very specific part of Los Angeles.
he's covering I think, or they're in Northern part of a Lake or salary, but it doesn't really matter.

The point is that he I think is making over 500 Cain annual recurrent revenue by just doing this thing that wasn't present here in a way.

I mean who would think of dry cleaning when you're working in Silicon Valley tech because it's not tech. the point is that it still makes money and it's not being Chad boss.
He know.
So.

All right, we'll come here to the last question and then we'll wrap it up.
this last question is, what I like to do recently is doing lists, small cultivaction things to my listeners.

what would you recommend them doing as soon as this episode is over? So one specific thing that they just need to do in order to, get better to fund raising or get better, get closer to find a good co-founder or whatever you think is necessary for them to do.

Yeah,

I think the most important thing that tends to get overlooked at all levels within the tech industry is talking to customers.

there's so much emphasis today on big data and machine learning and natural language processing, that, people tend to assume that the insights are going to come from data, whereas often the most interesting and actionable insights come from talking to customers.

And it may not be statistically significant.

I think that's what people worry about.

Well if I only talked to one customer, I'm only solving that one customer's needs.

That's absolutely okay because if you solve that one customer's needs, there's almost certainly a thousand or 10,000 other people like them.

I think the call to action I would have for folks that are in the fundraising stage, as an immediate action today or tomorrow.

it's just go talk to people, figure out, what are you trying to build? What's your thesis about what their problems are, talked about, talk to them about what they're trying to solve for, and start to build for that.

ultimately if you can build that community or that product that really sings for 500 people, then it becomes infinitely easier to figure out how to scale that to 5 million people.

I think the challenge is a lot of entrepreneurs want to go big really soon.

they create something mildly interesting to a hundred thousand people or even 5 million people, but not incredibly interesting to 500 people.

that would be the first thing is get to really know your customers.

I talked to an entrepreneur, a couple of years ago at Facebook who was building a social networks for college students and he had graduated a few years, earlier.

decided to go live on campus with, a friend of his, in order to really immerse himself in the college experience and make sure that, every day he was talking to college students to really understand how they were interacting with each other so that he could better build the product.

that's a really great example of someone who's immersing themselves in the needs of their customers and as a result is going to have a much better understanding of what they want and how to create a compelling product for them than, someone who's thinking about the problem abstractly or using data or market user research reports or thinking about, what are the trends in the tech industry and trying to solve for that.

Absolutely.
that's truly great example and I think that's a great advice.
You know, just talk to your customers.
It doesn't matter if the days, statistically significant or not.
No one cares about statistics.
I personally have a horrible bias towards statistics.
when you said statistics, statistically it's significant.
I immediately remembered about the problem in statistics I could not solve today in the morning. it's just, it's giving me PTSD.
So don't say those words please.
But seriously, the advice was great.
We'll wrap it up here.
Thanks a lot Riley for coming up and for taking your time to participate.
I think this was a wonderful episode.
We touched into so many topics and completely different fields.
Really.
We touched on to a working with gen Z, working dating apps, related fields, how to get acquired. Do you need to think about acquisition from day one?

And, we touched on a couple of more, whichever you forgot, but I will do my best to write a good summary in the description says episode and I will include links to a couple of resources that Ravi touched on too.

if you're curious to see what's rabbit up to, just check that video description and you'll see it there. thanks a lot Ravi and have a great day.
Thank you.