It’s summertime, which means it’s time for our annual grilling episode. In past years, we’ve talked to the leaders of Big Green Egg, Traeger, and Blackstone, and it’s always fascinating how those companies have the same kinds of problems and ideas as any of the tech companies we have on the show. 

In fact, it’s funny — in what can only be described as a perfectly Decoder situation, I really wanted to have Blackstone CEO Roger Dahle back on the show this year because his griddle company is such a success that he’s in the process of buying Weber, the biggest name in the space. But he’s stuck in antitrust review so he couldn’t come on the show. Grilling episodes, man — they’re the best.

Anyhow, all that means is that I finally had the opportunity to talk to SharkNinja CEO Mark Barrocas. We’ve wanted to have SharkNinja on the show for years now, mostly because it has the best name of any company that we’ve ever had on Decoder. The name perfectly describes the company’s structure: there’s Shark, and there’s Ninja. And, just in time for our grilling episode, the Ninja division of Mark’s business launched its first grill, the FlexFlame, earlier this year. 

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But, as you’ll hear Mark and I really get into, SharkNinja is really a product design company more than anything else. It has what you could only describe as a relentless approach to product development — SharkNinja launches 25 new products a year, across dozens of categories, in countries around the world. So, while we do spend a lot of time talking about the decision to launch the FlexFlame and what the business of grilling looks like for SharkNinja, you’ll also hear Mark and I talk a lot about the company’s broader philosophy around product development across all of its different categories. 

A lot of that philosophy, which was developed in the late 2000s for markets like vacuum cleaners and blenders, is now being applied to everything from slushy machines and pizza ovens to LED face masks. You’ll hear Mark explain that SharkNinja has a product engineering and design team of more than 1,300 people globally, dedicated to figuring out new twists on household staples. It’s also remarkable how many of the products are built around fan technology, which comes up a few times in this conversation.

In fact, a key component of the FlexFlame grill is a fan that lets it do a lot of different things. But the grill industry, as you might know, is a fiercely competitive market with a lot of brand loyalty, and product features alone might not be enough. I can’t tell you how many furious reader comments and emails we received when the CEO of Big Green Egg took a shot at Weber on last year’s grill episode. People love their grills, and they will fiercely defend them.

So I really wanted to ask Mark how his style of product development worked in the context of gas grills — and whether he’s envisioning Ninja’s outdoor grilling products as premium devices you keep for a long time or as ones that might rust and get replaced after a few years as you would an iPhone. 

Mark and I also spent a good deal of time at the end talking about marketing. SharkNinja spends more than $700 million a year on advertising, a great deal of which now goes to product placement and content creators on Instagram and TikTok. You’ll hear Mark recount his time selling products on television infomercials in the 2000s and how that’s now evolved into having his appliances become viral sensations online. 

Mark has a lot of thoughts about the state of the creator economy, which is already in the process of getting totally upended by cheap and limitless AI video, and whether he sees it teetering on the edge of a crash that could transform how he markets and sells his most popular products. 

This episode is a real ride — Mark’s infomercials background really comes through at times, and I think you can tell that I found myself just trying to hang on throughout this one.

Okay: SharkNinja CEO Mark Barrocas. Here we go.

This interview has been lightly edited for length and clarity. 

Mark Barrocas, you’re the CEO of SharkNinja. Welcome to Decoder.

Thanks so much for having me.

I am really excited to talk to you. I’m fascinated by SharkNinja as a company. It’s been around for a long time, but you’re having a bit of a renaissance lately. On top of that, this is our annual summer grill episode, and you guys just launched a new line of grills. So it’s perfect timing. Couldn’t be happier about it.

Great, really happy to be here.

Let’s talk about SharkNinja as a company to set the stage a bit. I think a lot of people know Shark, and a lot of people know Ninja. You’ve started marketing the main company a little bit more recently. Tell me about this company. Why have the two brands? How is it structured? How do you think about SharkNinja as a company?

As you said, the business behind these two great brands is SharkNinja. People know the Shark brand. We built Shark into an over $3 billion [a year] global business. We have the Ninja brand, which is over a $3 billion [a year] global business. Now, we’re actively marketing the SharkNinja business behind these two great brands, and trying to explain to consumers that we’re problem solvers. That’s what our business is all about. We find problems that others don’t see, and we solve problems that others can’t. 

We can get more into how we do that and why that’s unique to SharkNinja. We’re in 37 product categories. We sell in 27 countries around the world to everyone, from a high school kid doing a TikTok or an Instagram video about our products all the way up to a 60-year-old guy who’s focused on outdoor grilling or smoking. So, we’ve got a big demographic base and big socioeconomic group of consumers.

The idea that you’re going to market the central company, SharkNinja, as problem solvers comes up. There are lots of big household brands that exist in that space. OXO is very famous for this In the kitchen, where everything is somewhat uniquely designed, a little bit different. It’s  not a direct competitor to you, but the marketing there feels familiar. This is going to be the highest bit of design product that you can get. There are lots of others that play the same game. Is that what you’re thinking about? Do you want people to think of you as a design company or is it something else?

No. We want people to think of us as a consumer problem-solving company. You can focus on consumer products and look at it through a technology lens. You can say, “Hey, I have this core technology, and I’m going to take it and  apply it to two or three or four different categories of products that might be applicable.” 

Our core technology is consumer problem-solving. We’ve got a big team of ethnographic, consumer insights researchers. We’re mining consumer data, online reviews, social media content, and comments. We’re in hundreds of consumer homes around the world every year. We’re in restaurants. We’re in commercial environments looking at how people clean or cook there. 

We’re trying to find either a problem that a consumer has that they may not even know that they have — and we can talk about examples of that — or we’re trying to find things that the consumer is doing outside of the home that they’re not doing inside of the home. Ultimately, I think those two different things become the germs of innovation and ideas that we then have our 1,300 engineers around the globe focus on. And you say, “Well, hold on, vacuum cleaners have been around for 100 years. Hasn’t every problem been solved?” 

I’ll give you a great anecdote. We went into 100 consumer homes, and we watched consumers vacuum. During the cleaning session, about eight or 10 of those turned over the vacuum, took a knife or a scissor, sliced the hair off the brush roll, pulled the hair off, threw it in the garbage, and finished their cleaning session. At the end of the cleaning session, we said to them, “Is there anything you do to change your vacuum cleaner?” They said, “No, it works great.” We said, “Well, hold on a minute. How about that time when you turned it over and you nearly cut your hand and you sliced it?” They started apologizing for the product. They started saying, “Well, I have two daughters with long hair. I have three dogs.” 

A consumer works around the problems of the product. Well, for us, that becomes an idea. So, we go back to our engineers, and we say, “Can we develop a vacuum brush roll that doesn’t wrap hair?” Eighteen months later, we came out with Shark’s Self-cleaning Brushroll, and it became the number one selling vacuum cleaner in the United States. 

That’s just a little example. We do that in category after category after category, which is why we’re not limited to two or three or four categories. We’re in 37 different product categories in and outside the home.

There’s a lot there that I want to unpack. You’re talking about a lot of upfront investment in product development. Many of your competitors don’t do that. They really do take core technology and reapply it in different categories. Many of your competitors are based in China. They’re selling on Amazon, and they’re selling clones of your products. They don’t have to front that investment, and they can keep their costs low.

How do you think about that dynamic? What you’re describing requires you to constantly front the cost of innovation that will almost certainly get copied at higher rates across the board.

SharkNinja has two main competitive advantages. One is disruptive consumer innovation. We spend 7 percent of our sales on R&D and innovation in an industry where competitors spend 1 percent of sales or less on innovation. We bring 25 new, ground-up products to market a year. I’m not talking about a new product as a new color or button. These are ground-up, brand new products across so many different product categories. 

We enter into at least two new product categories that we’ve never been in before every year. Before last year, we were never in the skincare business. We were never in the outdoor cooler business. Last year, we went into four new product categories. We made an LED, infrared, cryo face mask, which was our first FDA-approved medical device. We launched a slushy machine that went viral on social media. We made our first outdoor pizza oven. You can’t think of more diverse categories. The common stream through all of those is that they all solve a consumer problem.

I think this is a great time for the Decoder questions. Usually, we talk about some controversy at the top, but you’re describing something that’s so interesting that I think the structure will actually help explain a lot. How is SharkNinja structured? How many people do you have, and how is it organized?

We’ve got nearly 4,000 people around the globe. From a structure standpoint, we have an executive management team that is half homegrown, with  people who have been with me for 17 years. That’s rounded out with other folks who have joined the organization and have been able to bring scale or global experience into their areas, like product development, engineering, sales, and marketing. 

Those folks have been with me a long time. We’ve really helped build the SharkNinja secret sauce together. We’ve rounded that out with great talent from other great companies and with other great experiences to build a really strong management team.

How is that organized? Do you have a Shark division and a Ninja division? Is it all one company? How’s that expressed?

From a functional standpoint, the administrative roles are all corporate SharkNinja. There’s a corporate CEO, a corporate general counsel, a corporate COO, and a corporate people and culture leader. When you start to get into the individual teams, we break it up. There’s Shark Home, which involves cleaning, home environment products, fans, and air purifiers. We have Shark Beauty business, which is haircare and skincare. Then we have the Ninja business, which is everything that we do within Ninja. So, that’s how we break down the business. There are two brands, but inside of those two brands is Shark Home, Shark Beauty, and Ninja.

If I look at that broadly and I just look at your competitive set, Shark and Dyson have always been back and forth. There’s been some lawsuits, some patent disputes. Some of those have settled over time. There’s a lot there. 

To your point, Dyson invented fan technology and it tried to express it across a number of different products that led them into beauty. It got into hairdryers, then expanded into the rest of the beauty products, and it’s done well. How are you thinking about Shark? You started with your core technology, you ended up at beauty, and now you’re going to do the rest of it?

If I go back 17 years, we were a small business. We were a $150 million [a year] business. I’d love to say that there was a grand plan of how to become a $6 billion global business without acquiring a dollar of revenue. 

Could you tell me? That would be great.

To be honest with you, we just wanted to make great products that consumers loved. If I go back to 2008, what we realized was that the consumer was getting more and more power in terms of being educated before they made a purchase. 

In 2008, there was a thing called Consumer Reports. You opened up Consumer Reports and it told you the eight vacuum cleaners to buy. If your vacuum cleaner wasn’t listed in there, you were going to have a really hard time gaining awareness. What my partner and I at the time realized was that consumer online reviews would be the great equalizer. You hear that today and say, “Well, what great equalizer is that?” Well, back then, people often bought from one brand or based on an expert recommendation. What started to happen was consumers started going online and started writing honest reviews about their experiences with products. 

Soon, consumers weren’t going to open up Consumer Reports before they would go out and make a purchase. They were going to go online and look at 10 million of their closest friends to figure out which vacuum cleaner or blender to buy. And they were going to get honest opinions. That is one of the major drivers of our business. If I go back 15 years, we built our business one five-star review at a time. So, if you had a great experience with a Shark vacuum, you say, “Hey, I might try Shark’s air purifiers that just came out,” or, “They got into haircare? I might try their haircare products.”

It’s interesting. What we look at is what gives us the right to be in the category. The right to be in the category is not because you have a brand that you can just put your name on because you see a sales opportunity. What are we bringing to the consumer that they can’t get anywhere else? What’s an unmet need that the consumer has? We set a very high bar on that within the company. There have been categories that we worked on for 10 years and never brought a product to market because, ultimately, we came to the conclusion that the consumer and world don’t need us. So, being anchored on this beacon and asking what gives us the right to be in the category has led us very methodically to the next opportunity and the next opportunity and the next opportunity.

What’s one that you’ve been rejecting for 10 years?

I loved the power tools business. I think the Shark brand can translate into power tools. We used to think of ourselves as in the home. We’re making a lot of products now for outside the home. I thought power tools were a great opportunity. We’ve tried it three, four… Ultimately, we got to the place and said, “You know what? We’re not bringing anything that’s game-changing or solving a massive problem that somebody else isn’t solving.” And we decided to go back to the drawing board.

I will tell you also that there are categories that we tried for eight years, and we eventually cracked the code. An example of that is the carpet extraction and stain cleaner category. We became the number one selling vacuum brand in the United States in 2014. Ever since, retailers and consumers would say, “Why aren’t you getting into the carpet cleaning business? That seems so logical from a brand extension standpoint.” The honest answer was that we never came up with something that was great. 

We finally cracked the code on that about two and a half years ago with a product called the Shark CarpetXpert. It cleans carpets better than anything else on the market. It’s much more lightweight, much easier to use. It does it with an attachment called the Stainstriker. In a short period of time, we gained over 20 percent market share in that category.

This shows us that just because we might bang our head against the wall a couple of times doesn’t mean we won’t eventually crack the code. We may figure it out. When we do figure it out, the innovation really connects with the other competitive mode of the business, which is creating viral demand for our products. We spend 11 percent of sales on advertising in an industry that spends very little on advertising. So, you’ve got a disruptive product that solves a consumer problem, and you’re able to go out and talk about it on things like social media, experiential events, and TV. When those things come together and you get it right, it really connects with the consumer. Not just in the United States but globally.

That’s a really fascinating piece of the SharkNinja story, and I think it tells a bigger story about the advertising market, particularly on the internet, than anyone really is giving credit to you. But I want to stay in corporate structure for one more second. So you’ve got Shark Home, Shark Beauty, and Ninja. Ninja feels like kitchen products?

Kitchen and outdoor. We do outdoor cooking, we do outdoor coolers. Yeah, kitchen and outdoors.

At the company, you’ve got 1,300 engineers. Are they split between divisions? Do you have central engineering? Do they compete for resources? How does that work?

We have 1,300 engineers today around the globe. They’re based in Boston, London, and Asia. There are certain functions within the company, like electrical engineering, that might go across different categories because they’re subject matter experts. But it’s not just the number of engineers that we have. It’s the competency of those engineers. We’ve got mechanical engineers, electrical engineers, mechatronics, app IoT, and software engineers. 

I think you’d be really surprised if you went inside one of our products. There’s an enormous amount of technology in a product that retails for $199. If I went back seven or eight years, most of it would be mechanical engineering. Today, the software team and the electronics team, together with mechanical engineering, have allowed us to bring so much more functionality to the product, allowing the consumer to have so much versatility with it than they ever were able to before.

So, when the Ninja team says they’ve got an idea for a gas grill and they need a bunch of software engineers to work on the app to run the FlexFlame system, and those same engineers are being pulled towards the next project, how do you divvy up those resources?

It’s a challenge, But here’s what’s super exciting about it. If you’re an engineer and you work at a company that has one product category that you sell, eventually after three or five years, you get to the point where you say, “Look, I’ve gotten tired. If I want to go to another opportunity or I want to work on something else, I have to find a job in another company.” At SharkNinja, you can find your next job within SharkNinja. You’ve been working on vacuum cleaners for three years. You want to try something different? How about air fryers? How about outdoor cooking? How about fans? How about robots? How about hairdryers or skincare?

I think the cross pollination of engineers is so powerful for us. Our ability to  to put out an intercompany message that says, “Does anyone have experience in LED lights? Does anyone have experience in airflow technology?” To be able to see the number of experts we have internally is incredible. If you’re a company, you might have to go outside and find a whole lot of subject matter experts. We have a whole lot of subject matter experts inside that are red teaming each other’s products.

The joke I’m always making on Decoder is that if you tell me your company’s structure, I can tell you 80 percent of its problems. You’re describing two big divisions, both of which are growing and aggressively launching new products. There are some subdivisions on the inside. I’m guessing if the Ninja team steals a bunch of LED lighting engineers from the Shark team, they’re not going to be happy about that. That’s you. You’ve got to mediate that dynamic. How do you mediate those resources? How do you allocate them?

I think a lot of it comes down to the needs of the product. We really don’t look at it rigidly by if it’s a Shark product or Ninja product. We start with a product pipeline of ideas, which might have 65 ideas that we start with. Over time, we whittle that down. We might put something into a prototype, get it into a consumer’s home. We thought it was a great idea, but the consumer says they’re not interested so we throw it away. 

We might just put something on packaging. We might not even put it into a prototype. We might show them a box front and say, “Hey, does this get you excited?” We might look at something and say, “It’s great, but it’s too expensive and we don’t think it’s commercially viable.” Maybe it’s too early for the consumer. Maybe there’s a problem, but the consumer doesn’t even know yet that it’s a problem. 

I’ll give you an example. They just mandated composting in New York City. It’s very interesting. A New York apartment is going to have to sit there with their food scraps, putting them into this little plastic bin and this little bag. They’re going to have to wait seven days. What do you think happens to that bag on day four or five? It doesn’t smell great. So, we had some young engineers that were super passionate about solving that problem. The challenge with it though is that it’s not in enough municipalities. The consumer hasn’t engaged with it enough to realize what the problems are. So it may be something incredible but it’s two years too early.

So, we’ll put that in the parking lot, and we’ll say, “Let’s revisit that when it comes to the next product innovation cycle.” We really do look at it at the product level and not at the brand or company level. I think that’s what helps us assess how to divvy up resources. 

The other thing I would say is that we use a tremendous amount of outside experts. This is a company where it does not have to be invented here. We are looking for the best and brightest people to help us solve consumer problems. In any given month, we could be working with as many as 50 outside subject-matter experts. They could be on things as little as gear systems or troubleshooting a particular heater that we might have. 

That’s something that I don’t want to underestimate because at a lot of engineering companies, engineers feel like, “Hold on, you hired me to solve it, so I have to solve it.” We’re sitting here saying, “At the end of the day, we want the consumer to open up the box and enjoy the product.” The consumer doesn’t care whether you made 100 percent of the product internally or whether you brought in five subject matter experts to help. We do a really incredible job of getting the best and brightest people to help us solve these problems.

That really comes down to how you think about investing in the core technologies. I’ll just stick with Shark and the vacuum cleaners, blow dryers, and air purifiers. At the core of that technology are high-efficiency small motors. They can move a lot of air. You can express that in multiple kinds of products. That’s a very competitive segment. That’s the patent lawsuits. It’s deeply competitive. 

You can go buy that core technology. Once you’ve developed it, the goal is to ramp it over time and take margin out of all that upfront cost. But you’re launching into so many new categories. You’re going out to buy lots and lots of new core technologies from 50 different subject matter experts. How do you think about managing those life cycles? Where do you think about spending the money on new technologies that will last for a long time and let you take margin out and where do you think the technology is mature, and what you need to do is actually expand the category?

It’s interesting. I’ll go back to the example that you gave on vacuum cleaners because I think that’s a good one. We have patented a no-loss suction vacuum technology, so the consumer can pick up whatever they want and won’t lose any appreciable level of suction over the life of the product. But as you start identifying the next consumer problem, you start having to then build evolutionary or add-on technologies. 

I want to give you some examples that I think you might find interesting. We had great no-loss suction technology when we developed our first vacuum cleaner, which was called the Shark Navigator, We cleaned carpets better than our competition, and we did it at a fraction of the price. Those were the core things. In 2009, we found that the American consumer was really interested in cleaning carpets. That was the proxy of a great vacuum cleaner. 

In 2010, we said, “Okay, what’s the next problem for us to solve?” We went into consumers’ homes, we watched them vacuum. In the homes that had stairs or multi-level homes, they would plug the vacuum in, pull the hose out, and clean the first three steps of the stairs. They would then unplug the vacuum, walk upstairs, plug it in, and clean the top three steps. The middle three steps would never get clean because the hose was never  able to reach that far. So, we looked at that and we said, “Why is the vacuum tethered to this base on the ground? What if you could lift it away, walk around with the vacuum cleaner, and have 30 feet of travel with the cord?” That product was called the Shark Navigator Lift-Away. It’s still the number-one selling vacuum cleaner in the United States. We solved the problem by having vacuums that not only cleaned on the floor but cleaned above the floor as well.

Now you might say, “Okay, hasn’t everything been developed?” Well, three years later, we want to know what’s the next problem. The next problem is cleaning under furniture. You don’t want to move the furniture. How do you clean under a bed? Imagine what under a bed looks like when you haven’t cleaned it for two years. So we developed something called Powered Lift-Away. You took the canister off the vacuum, and we had power that went down through the hose and to the nozzle. You could now take your nozzle, just like a canister vacuum, and go anywhere, under furniture or under beds. That became the number-one selling vacuum cleaner in the United States when it came out. 

So you say again, “Well, has everything been invented?” A few years later, we said, “Wow, we do a great job at cleaning carpets, but we aren’t doing as great a job cleaning hard floors.” With carpets, you need a really aggressive brushroll to clean. On floors, you need to be able to pick up the fine dust. So we looked at that and realized they were in conflict with one another. What if we developed a vacuum cleaner that had two brushrolls: an aggressive brushroll that cleaned your carpets and a fluffier brushroll that could pick up the fine dust on your hard floors? That technology was called Shark DuoClean. Today, that’s still our best-selling vacuum cleaner. 

So, finding the next problem and the next problem will lead you into new technology and new evolution. By the way, all of these things that I just mentioned to you are patents. They’re all things that only SharkNinja does at this point. But we’re constantly on this quest to find the next problem, and then that leads us into our innovation pipeline.

I’m going to push back on you just a little bit. I know the Decoder listeners quite well. I know what they’re saying to you in their cars as they listen. The vacuum cleaner market is pretty mature. It is ferociously competitive. There are products from LG, Samsung, Dyson, you name it that do all of these things and more in different ways. I hear what you’re saying. You see the problems and you innovate for the customers that you see and the problems they have. 

But the market is competitive. How often do you spend thinking about where the market is going, where the competitors are getting ahead of you, and how to leapfrog them?

Nearly every day. This is what we do. We’re consumer problem solvers. We’re trying every day. Look, we had zero market share in the vacuum industry in 2008. Today, SharkNinja has over 40 percent market share in the upright vacuum cleaner market in the United States, which is the largest portion of the vacuum cleaner market in the US. We became number one in 2014, and we’ve never given that up. Why? Because we’re continuing to innovate and innovate. 

We’re driving up the average sell price. You could buy a Shark vacuum for $129, or you could buy a Shark vacuum for $499. We are bringing the opening-price consumer up into our brand. We don’t have something for the $79 consumer, but I think the consumer looks at performance, value, quality, and innovation.

You’ve got to bring all four of those things together for the consumer. I think you might have innovation, but the consumer needs all of this and value is a huge component of it. The opening-price consumer can step up to a $129 Shark vacuum. The high-priced Sephora, Ulta consumer can buy a $499 vacuum. There is no brand that cuts across such a broad price range and such a broad feature range. 

The other thing that I think we do a really effective job of is being the vacuum for you when you move into your college dorm room. We want to be the first vacuum for you when you get your first apartment, when you get your first house, when you have your family, when you get your first pets, and when you wind up as an empty nester. I don’t think there is a brand out there selling corded vacuums, cordless vacuums, robot vacuums, hand vacuums, or shop vacuums that is doing such an effective and compelling job of innovating and innovating while also having extraordinary value and great quality.

One of the things I think about a lot here is how companies grow. You’re describing people buying lots of vacuums over time. A long time ago, I had the former CEO of Sonos Patrick Spence on the show, and I said, “Is your whole plan that people will just get bigger and bigger houses and you’ll sell one more speaker every time?” Is that the plan in the vacuum business? People are just going to buy new vacuums at a steady clip?

I think the more macro question is how do we grow and how do we think about growth? We think about growth with this three-pillar growth strategy. One is gaining share in our existing categories. We enter categories, and within three to four years, Shark or Ninja becomes the number one or number two market leader in that category. There’s still lots of white space within our existing categories. We’re in an industry with an available [total addressable market] of $120 billion. Last year, we were a $5.5 billion business. So, we’re less than 5 percent of the overall market. 

Number two is expansion into new product categories. Many companies say they can expand into new categories, but either the retailer or the consumer doesn’t let them. They don’t see them in those categories. I think we’ve been really effective at taking the Shark and Ninja brands into many different places.

Then, third is international expansion. This year, over 40 percent of our business is going to come from outside the US. So, when you think about us compared to brands that are able to scale globally, we launch 25 new products a year and we sell20 out of those 25 products n every market. The same product. We look at the consumer from a product innovation standpoint across this matrix. How does the American consumer think about a product? How does a European consumer think about the product? How does an Asian consumer think about the product? I think that’s an important point to note. We’re not just innovating for one type of consumer, we’re innovating for a global consumer.

I’m going to ask you the other Decoder question, and then I want to talk about expansion, particularly into grilling. This is our grilling episode. We spent too much time on vacuums. 

Here’s the other Decoder question. How do you make decisions? You’ve laid out a lot of frameworks here. It’s clear you’ve thought about this a lot. What’s your framework for making decisions?

We have something, and you can go to our website and see it.  We’re very focused on culture. Culture is our competitive advantage, it really is. We have 5,000 patents. We have great brand names. We have incredible innovation. What has enabled us to grow at a compounded annual rate of 21 percent a year for the last 17 years is the way we think. I’d invite you to go onto our website and look at a document called “Outrageously Extraordinary.” The idea is that we have this inextricable desire to be the absolute best we can be. That comes with this inherent fear of failure. How do we get rid of the fear of failure because you tend to play it safe when you’re worried about failing. So, for us, we set what we call these “unimaginably high bars” in a game worth playing.

You will seldom see a meeting at SharkNinja where you say, “let’s go after this,” and everyone in the room walks out and says, “I think we can do that.” Most people are going to walk out of the room saying, “How the hell are we going to do that?” We’ve just set a bar that seems absolutely impossible. So, we think that courageous leaders set an unimaginably high bar in a game worth playing. Even if you fall short of that, you will still do something extraordinary. If I set out to have number one market share going from zero, and that’s our goal and we wind up being number two. But hey, we started from zero. So we’ve got to set a very high bar to start. 

The second is this idea of leading with a relentless desire to know more. Answers in business are not surface level. People want an easy answer to a tough question. The answers lie deep, deep in the business with trying to understand the root cause of the problem. What is the mousetrap that you’ll create that will besustainable, that can’t be disintermediated by a Chinese factory that’ll come in and sell a low-cost product on a platform? So how do we have this desire to know more, or know more than anyone else that is competing against us? We want to be explorers, not tour guides. 

Most of what we’re doing, is in uncharted territories. My expertise ran out eight years ago. I’m running on fumes when it comes to expertise at this point. Every day, we’re exploring new territory. We’re pivoting quickly. We’re getting smarter every day. We use the phrase “we reserve the right to get smarter” at the company. We make a decision, new information comes in, and we decide tomorrow that we’re going to change the decision. I think one of the things that many companies, or many leaders, get stuck in is saying, “I made a decision, so I just have to go in that direction.”

We want to constantly be on the lookout for if the decision we made was stupid. I stood up in front of our town hall at  a corporate meeting a number of months ago, and there were some questions about changes that we had made last year. I said to the organization, “I made a change because previously I was being stupid and I’ve decided now to be un-stupid.” 

What was the change?

The concept of un-stupid went viral around the company. People felt empowered to say, “I want to be un-stupid today. We’re going down this path. It doesn’t seem like we’re going to be successful. Let’s pivot and change.” SharkNinja’s not curing cancer. We’re trying to delight consumers. We’re trying to positively impact people’s lives. 

So, the change that you mentioned is how we were investing dollars in the company. We have to stay focused and invest dollars in areas of growth: growth when it comes to product development, growth when it comes to geographic expansion, growth when it comes to marketing and building awareness for our brands. I think we got too scattered and went after too many shiny objects.

There are lots of great initiatives for a company to go work on, but you also need focus. You need to make sure there are certain things that are sacred in a company, and that’s what requires the investment. Everything else might have to wait in line. You just can’t do everything at once. So, we had to pull back on some of those things, and we had to make some tough decisions about where we were going to invest and where we were going to hold for a little while, and then relook at it going into the next year.

This is a perfect tee up for your decision to invest in grills, but I have to know, what did you pull back from? Was there anything specific?

I think we went after a lot of technology projects. We were implementing Oracle at our company. We were re-platforming our e-commerce site. We’ve got this great partnership with Salesforce, and we’re launching a new e-commerce site in September. There were certain things that were just really mission-critical. There were other things that were really just nice-to-haves. They were not going to make or break our business, they were not going to create a competitive advantage. So, we had to decide what are the most important things and what it isn’t the right time for.

All right. Let’s put all this into practice and talk about grills. I love talking about grills. Can you tell? I’m eager to do it.

Great.

This is one of my favorite episodes of the year, to talk about the grill industry. You’ve laid out a lot of frameworks here. You’ve said, “We should have to deserve to be in the market. We need something better.” You’ve laid out not wanting to get away from the core areas of growth. The grill market is ferociously competitive and extremely well-served with lots of innovative companies. 

It feels to me like the people who are really into grilling like having different kinds of things as opposed to just one thing. I see it in backyards all over my town. If you got one, you’ll soon have two. It’s also been disrupted. One of our very first grill company guests was Roger Dahle, who founded the grill company Blackstone. He’s in the middle of buying Weber. He actually couldn’t be on this year because of antitrust. He has to go through FTC review to buy Weber. That’s a big disruption. He bought the market leader. Why enter this market? Where’s the differentiation? How do you think you can get to number one?

I think you have to go back to the fact that Ninja is the kitchen market leader. We built up a lot of brand equity in air fryers, ovens, cookware, blenders, coffee makers, and all kinds of things in the kitchen. So, three years ago, we decided that it was time for us to go outdoors, and we did it by developing a product called the Ninja Woodfire Grill, which is a grill, a smoker, and an air fryer. It was all electric and it sat on your tabletop. We felt like there was a really unserved need. I’ll give you examples. People who live in apartments can’t have propane, but they can have electric outside — campers, RVs, boats, and things like that, along with tailgates, and you can just plug it in.

We found that people who owned a grill weren’t going to invest in another smoker. So, we found that people would be interested in buying something that was small and could fit on a tabletop next to their outdoor grill, or vice versa. If they owned a smoker, now they could own a grill. We saw this in the vacuum cleaner business. You have an upright vacuum, a cordless vacuum, a robot vacuum, a hand vacuum. So, we went into the market, and in a very short period of time, we took big market share. We’re the number-one selling electric outdoor grill right now. We sell a number of different versions of it. We then went into outdoor ovens. So, we’ve got a really great–

Wait, can I just ask something? Sorry, you’re just in my wheelhouse. Having the number-one selling electric outdoor grill feels like a small part of a huge category.

It is. But you have to understand that you have to enter in a place where the consumer accepts you, and then you have to figure out what’s next. So, we go into tabletop grills and then expand from that into tabletop ovens. Now, we’ve got this outdoor oven that allows you to cook up to 700 degrees Fahrenheit, roast, and make pizza in it. That becomes a nice business for us globally. 

Then, we decide where to go next. We’re doing great in tabletop, but now, as you said, there’s this big $5 billion market around large format, outdoor cooking products. So, we look at it, put ourselves in the shoes of the consumer, and ask, “What’s the empathy of the consumer?” The consumer goes to the Home Depot parking lot on Memorial Day weekend and tell one of the orange aprons that they want to buy a grill. The person says to them, “Well, do you want a grill, or do you want a smoker? Do you want a pizza oven, or do you want a roaster or a griddle?”

That becomes the first problem for the consumer. “I’ve got to make a choice.” Maybe there’s multiple grills outside in your neighborhood, but this person is saying you have one to choose from. “What do I do? Do I want a griddle? Do I want a grill? Do I want a pizza oven? Do I want a smoker?” So, we started with that and thought it felt like a really credible problem for somebody to solve. It took us two years, but we developed the world’s first grill that’s powered by propane, electric, and a cyclonic fan. That’s three things. There are incredible patents and technology in this product. 

Now, if you have those three things, what can you do? You can have incredible temperature control. Once I have incredible temperature control and I can move and circulate the air inside, I can grill, smoke, have a fully functional pizza oven, griddle, and roast. We called it the Ninja FlexFlame, and it’s the world’s first product that can do all of those things under one hood. 

So, we envisioned a world where the consumer can now go to the Home Depot parking lot, ask that same question to the orange apron, and that person will respond, “Well, sir or ma’am, you could either have a grill or a smoker, or Ninja’s got something that does it all.” And not just something that does it all and does it so-so. It grills like an incredibly professional $1,000-plus griller, smokes as well as a $1,000 smoker, makes Neapolitan pizza in a few minutes, griddles, roasts, and has incredibly even cooking performance. 

We came out with that product a couple of months ago. You can go online and look at it. It’s a 4.6-star rated product. It’s doing great. We launched it with an ad campaign with David Beckham. We think this opens up a whole new global opportunity for us.

You said cyclonic fan. There’s that fan again. This feels like core technology for you guys. Is it related to the Shark fans?

Well, sure. We understand airflow, we understand motors, and we understand electronics. Think about your grill 10 years ago. You put a bunch of charcoal into a pot, you lit it up, and it had some flame and it grilled for you. This product’s got a cyclonic fan. It’s got amazing amounts of electronics in it for precision temperature control. It has wood fire pellets that allow you to smoke. It has electrical power and it has propane power. What would a team of 1,300 engineers be thinking about if they wanted to build the most amazing product outdoors? I believe most consumers aren’t in a position to be able to have four different products on their outdoor patio. 

So we came out with this product, and we launched it at $999. We think this product offers breakthrough innovation, market-leading performance, great quality, and an extraordinary value for what it delivers.

I apologize, but I’ve had a lot of grill company CEOs on the show. I’m telling you, it’s one of my favorite episodes of the year because all of the grill industry’s problems are the problems that every other company has, but we don’t think about that industry in the same way. 

So, I would broadly describe the business models of your competitors in the grill industry as breaking down into two camps. There’s Big Green Egg, which wants to sell you a very expensive product that will last for a lifetime and that you will pass on for generations. They’re owned by a family foundation, and they’re not chasing profits in that way. It’s totally fascinating. There’s some high-end grill companies that also think the same way. Then there’s everyone else, and they say, “We’re going to put a hunk of metal outside. In three years, it’s going to rust out, and you’re going to buy a new one.”  

But being able to do everything at $999 combined with, “Oh, boy, my hunk of metal rusted out and it’s going away” is not a winning proposition. So, how do you think about that cycle, because those are basically the two camps. Are you trying to last forever, or are you trying to get replaced on a cadence outside?

Look, there’s obviously a replacement cycle for the product, but our business is about innovating and putting our products into retirement before their usable life ends. It’s no different than what Apple does. If you have an iPhone 14, you don’t really need the iPhone 16 when it comes out. Your iPhone 14 is just fine. But there’s some technology. It’s got three cameras. It’s got some other things in it. That’s  SharkNinja’s model. If I relied on a replacement cycle, someone would buy a product and they’d come back four years later to buy the next product. I want the consumer to get excited about what we do and say, “Wow.” 

Air fryers are a great example. We came out with our first air fryer, which had four quarts of capacity and did an amazing job air frying your food. We immediately got feedback from consumers that they wanted larger capacity. So, we developed five-quart, six-quart, and seven-quart air fryers. We then found out from consumers that they were batch cooking. They were making the chicken tenders and french fries for their kids and putting in the salmon and asparagus for themselves. 

We said, “What if we could develop an air fryer that could cook two things at the same time in two independent baskets?” And that became the number-one selling air fryer on the market. We then, shortly after that, found out that consumers loved that concept, but it took up too much counter space for some consumers. So we took that side-by-side air fryer, stacked the baskets on top of each other, and made the world’s first stackable air fryer. 

Now, we found that consumers go home, prep their lunch, and take it to the office, or they meal prep their food for the whole week. What if we could develop an air fryer that fits in the palm of your hand? That’s a product called the Ninja Crispi. Now  there are consumers who are bringing these healthy glass cooking vessels to work. They bring their air fryer pod. Instead of putting their food into a microwave that’s going to make it all soggy and mushy for lunch, they’re actually air frying their food at their desks and eating it for lunch. They’re meal prepping in the beginning of the week, and then they’re just putting their Ninja Crispi on top of it.

So, if you look at the file on our direct-to-consumer business, you have consumers seven years ago that bought a four-quart air fryer and then bought a dual zone air fryer two years later. Then, they came back two years later and bought a Ninja Crispi. That’s how we think about the business. I can tell you that two or three years from now, we’re going to come out with some innovation that’s going to be even better, even more exciting than what we developed with the Ninja FlexFlame, and it will allow the consumer to make a decision. Maybe they’ll give that product to a neighbor or their child, whatever it might be, because Ninja or Shark has come out with the next great innovation.

I’m compelled to point out that the core mechanical component of an air fryer is a fan. Just saying it! It pops up over and over again in this conversation. You’ve got a lot of fan technology. It’s wild to see how disparately it can be expressed. 

You’ve mentioned software a couple of times. It’s in the FlexFlame, it’s in a lot of the other products. One of the running themes on the show is that once you start investing in software, that just becomes an exponentially increasing cost. The servers have to stay up, the apps have to be updated. Apple’s going to keep releasing new phones and change the design language of iOS on a whim whenever it wants to. Is that all in-house for you? Do you contract that out? Because one of the biggest complaints I see with smart grills and smart appliances is, “Well, I bought this expensive thing, the app broke, and now my grill is useless.”

It’s a great question. I would say that about 75 percent of it is in-house, and about 25 percent of it is out-of-house. This is an industry and a market that is changing so quickly. Having an app that is standalone on your phone, like Waze or Uber, is very different from having an app that is connected to some sort of hardware device. It’s a whole different situation. We’re the first to admit that we need to bring lots of great minds around this. So, a portion of that is absolutely outsourced, as we look at testing, validation, and development ideas. But we do have a great internal core team working on that. It works on that with our robot products and our outdoor cooking products. 

The concept of an app on a product is very interesting. I remember going to trade shows six years ago where every single booth just commented,  “We have an app.” I remember going down once into one of our engineering labs, and there was a blender there. A person handed me their iPhone and said, “Here, use the blender.” I went on the iPhone and I pressed go for the blender to start. I said, “Well, our blenders just have one button. Unless the app can put my bananas, my strawberries, and my protein powder into it while I’m in bed, why do I need an app on this particular product? I can just fill everything up and push a button. We have a technology called BlendSense with sensors that know when the blending is stopping.

With apps, the really important thing to understand is when the app is a vanity exercise versus when it’s bringing true value to the consumer and unlocking something in the product that they wouldn’t be able to do if the app didn’t exist. I think that’s the case with robots. There’s a case to be made with outdoor cooking. But as you said, it is very complex putting an app together with some sort of hardware and making sure that all of those pieces connect for every house, every router, every consumer that’s using it. So, we’ve got to work with both in-house and out-of-house people to help us do that.

How do you think about that cost? There’s the consumer experience of, “I bought a grill five years ago, they never updated the app. Some of my features went away because iOS changed.” That’s one side of the experience. From the company perspective, what I hear so often is, “Well, there’s no recurring revenue model for this product that supports ongoing development of this app.” 

You brought up Uber. Uber’s business is that app, and it spends a lot of money developing that app. Do you have that kind of model in place where you can say, “Okay, here’s the ongoing support cost of the FlexFlame Grill that will make sure we deliver updates to the app?”

Something interesting for you to know is that we update our robot app nearly every single month, and that goes out to all of the devices out there. It could be a product that somebody bought five years ago. There’s constant, constant updates as we’re looking at data from the apps, getting testing feedback, getting return information, or getting customer service questions. We could be adding bug fixes or we could be adding new feature functionality.

But you’re not charging subscription revenue?

No, no.

So that’s just cost. So how do you think about that cost versus the margin of the product at the onetime sale?

We look at it as all about positively impacting the consumer. I need the consumer to have a great experience so that they come back and when we go into the next category, they say, “I had a great experience with this Shark or Ninja product, I’m willing to try them in the next category.” You brought up other outdoor cooking companies and other companies. You have to understand that most companies have a business model where they want to sell you a product, and then they want to sell you another product four years later when it comes to the replacement cycle. I want to sell you two products a year. I want to sell you a cordless blender. I want to sell you an espresso machine. I want to sell you an LED infrared face mask. If you have a bad experience with one of our products, I’m going to lose that whole recurring revenue stream from you as the consumer. 

I’ve been doing this for 17 years. I want to do this for another 20 years. Over that period of time, there will be a finite number of consumers. And every day, as a business, you’re either gaining loyal consumers or you’re losing frustrated consumers. So when you say, “Well, what’s the ROI on that?” What’s the ROI on happiness? The ROI on happiness for SharkNinja is infinite. That’s how we’ve built our business. It’s not even a question as to whether we’ll go and do it. The answer is we have to do it. We have to make sure that our consumers are happy.

This conversation is really interesting, and there are two themes. One is that fans are everywhere, and the other one is how much you’re willing to talk about costs, things that cost money against growth. You’re constantly expanding. You’re launching 25 new products a year. It feels like you see growth as the engine that justifies whatever costs come about. Do you see an end to that growth?

Hopefully not.

I’m just asking because at some point. You’re going to run into a category problem, where you’re Apple and you have to make a car.

Look, I’ve been told that now for 15 years. “Mark, you have a $500 million business. Could it get any bigger? Now you have a $700 million business. Can it get any bigger?” If you’ve worked at a company that’s growing 1 percent or declining 2 percent, it’s tough. Inflation is going up 3 or 4 percent. There’s not much money at that point to invest, innovate, reinvent yourself, and all of those things. Part of what we’re trying to do is disrupt ourselves. We were known as Shark, the steam mop company, 17 years ago. Then, we were Shark, the vacuum company. Now, if you speak to a college-aged person, they think we’re Shark, the beauty company. We’re constantly reinventing ourselves. 

 So, what growth allows you to do is invest, but investing alone is not enough. It’s not enough just to have money to invest. It’s about how willing you are disrupt yourself. Are you willing to take your old business model, rip it up, throw it away, and start new again? Are you willing to pivot quickly? Are you willing to say, “I’m going down a path that likely won’t work or that someone else is going to catch up to me?” 

We go into these categories… I’ll invite you after we’re done with this, and it does apply to your air model. We have a product called the Shark TurboBlade. It is an indoor fan with 350 million impressions on social media right now. It is going viral on social media. When you look at that, you say to yourself, “Well, Mark, it’s a fan.” No, it solves an incredible consumer problem that the consumer didn’t even know that they had. It also creates a category of one. We’re not in the fan business, we’re in the TurboBlade business. We’re in the comfort business. So again, growth is the pathway. But it’s the mindset and the culture that allows you to be able to say, “I’m willing to rip it all up and start over again.” We’ve got to create a definable competitive advantage.

There’s something really interesting, and honestly refreshing about the idea that you essentially see infinite new categories that will allow you to invest in some of the costs. I see a lot of your competitors saying, “Actually, to preserve our margins, we have to stop investing in a bunch of stuff because Chinese companies are coming or Amazon is available.” Amazon at this point is ChatGPT for products. You type something in, and 5,000 suppliers will show up to sell you variations of the same product. 

The other piece of this, which I think is really interesting — and I want to make sure we spend some time on it here at the end — is how you think about marketing and about the brand. The brand is getting more upscale. We have a Shark vacuum from 1,000 years ago. I know that the plastics you’re using now are much higher quality than the one we have.

You’re moving up, and a lot of how you’re moving up is marketing on social media. Adweek had a story reporting that you’re spending $700 million a year on advertising. That’s 11 percent of your sales, and all that is going to creators and product placement. As we’re speaking, the whole ad industry is at the Cannes Film Festival in France right now talking about the future of the ads. I look at your spend and I think, “Oh, this is the meteorite. This is going to hit the earth, and everything’s going to change.” You’re at the bleeding edge of it. Why make that bet? How do you think that is going, and where do you think it goes from here?

Let’s go back 16 years. At that time, 100 percent of our ad spend was on what were called long-form infomercials, which were 30-minute infomercials. My partner would go on TV and run demonstrations. He and I would develop demo ideas to do. Why? Because we didn’t have any money at the time, and so we went on TV. A certain amount of the sales came to us directly and paid for the advertising expense. But a large portion of the sales went and got sold at retail outlets. 

So, every company has to find their white space. So let’s start with that. People would say to me, “Well, you’re on infomercials.” Okay, but that was our way of expressing to the consumer what was unique or different about our products and the problems that we were solving, and it helped build our brands.

I want to go back to the point about the online reviews in 2008. When I was a kid growing up in New York in the ’80s, there was the Sims Store, which would say, “The educated consumer is our best customer.” Well, in 1985, there were not many educated consumers. If you had a problem with a product, you returned it to the store, and you told your mom, dad, or friend that you wouldn’t buy this product. There was no forum where you could get the information out. 

So, when online reviews started, that became a great selling vehicle and a great referral vehicle for us. It evolved as you got into 2014 and 2015 on Facebook. You’d have these big Facebook group chats with 30,000 or 40,000 people exchanging recipes and ideas. Then, right before COVID and during COVID, it really started evolving into social media with Instagram and TikTok. Today, it’s so much more than that. The platform we are going to have the highest increase on this year will likely be Reddit. We’re spending more on Pinterest. We’re spending more on YouTube. 

There are now these ways for consumers and creators to express themselves, and for others to be able to get information about the product. So, if you go back a number of years and you were advertising, you created one message. You created one ad, you ran that one ad at nine o’clock at night on NBC, and the only people that saw it were the people who were watching NBC at nine o’clock at night. Go look at the comments section on some of our new products. “When is this product coming to Portugal? When’s the product coming to Norway?”

Wed did a really interesting exercise. We went and mapped how buyers consume social media all around the world. You’d be interested to know that they’re not just consuming it in English in the United States, Canada, the UK, and Australia. They’re predominantly consuming it in English in the Netherlands, Poland, the Nordics, and the Middle East. So, one of the things that’s really driven the global expansion of our business is that there’s already pent-up demand for our products even before we even bring them into a market. 

I’ll give you an interesting example. We were launching our Ninja Slushi in Norway. Social media got wind that one of the major retailers was going to have a Ninja Slushi product. The temperature outside was 5 degrees Fahrenheit. There were 400 people lined up outside of the store to buy a Ninja Slushi. That all came from this social media awareness that has no borders and just permeates all around the world.

One of the things I think about a lot with the creator economy is that there’s the organic demand, which you’re describing. People see things. The content can travel anywhere with little regard for borders. Then, there’s your spend. You are spending on creators and influencers. That is a huge part of the market. It is a growing part of the market. There’s a ton of excitement there. There’s a ton of money there. 

I see a supply and demand problem in the influencer economy. I think the creator-branded content economy is headed towards a crash just because of supply and demand. There’s an infinite supply of creators every day, and more creators are coming onto these platforms. There’s AI, which I want to talk about for one second here, that’s creating more and more content. There’s only so many people with only so many minutes. You can see the supply is just going to outstrip demand over time. Are you seeing your rates that you’re paying influencers go up or down in response to this?

So I look at it a little bit differently. I think the crash that’s going to happen will be a big shakeout for those who are not creating compelling content. If you’re able to build super compelling content, you become very valuable to brands and to market with. I think there are a lot of people out there who are nailing it on their content, and they’re not investing in themselves, not evolving, and not continuously getting better.

You as a creator might be able to do something for a brand, and you’ll say, “Hey, I did this post.” But I think you really need to be looking at the lifetime value you could be doing with this brand, not that one post. What if I was working with a company that was coming out with 25 new products a year, and they called me up every year to work with them on five of their products? I wouldn’t be thinking anymore about the short-term impact of getting through that one post and moving on to something else. I think that is what will to evolve and change over the course of the next year or two years as the metrics and the data become much faster, much more transparent. 

I think we already have dashboards in the company where we can immediately look at a person, scorecard them, and be able to say, “These are creators we don’t want to work with anymore. These are creators we want to work with tremendously moving forward.” I don’t think that was something that was looked at as closely or managed as effectively since there was this big swoop up. I think you will see that change considerably over the next 18 months. You will find that the best creators really rise to the top, and there’s a real bifurcation of the market.

When you look at those scorecards and dashboards, what are the metrics that you’re measuring to figure out who’s worth working with and who’s worth dropping?

We’re looking at engagement metrics. We’re not just looking at views. We’re looking at likes, shares, and comments, and we’re looking at the types of comments. Are they commenting about something that you did that got them excited about the product, or are they commenting about something that maybe you wore in the spot? 

So, there are tools and metrics now that have allowed us to get so much more educated. If I go back even 24 months ago, you’d get excited about a post that had 500,000 views. That 500,000 views is not the answer anymore. It’s now about drilling down and really understanding if a cohort of people engaged with that content. Did they get excited about that product? What did they do once they saw it? Did they just scroll to the next one, or did it elicit some type of reaction or feedback? I think that the world is getting much more educated and intelligent about that.

I want to read you this quote from Mark Zuckerberg, because what you’re describing is a trend I see everywhere, which is that this industry is professionalizing. There’s going to be some winners and there’s going to be some losers. It’s really interesting to me that your background is in infomercials because I see all of these social platforms turning into marketing channels. 

You’re describing the individual creator as something like a new generation ad agency or a marketing firm. They’re independent marketing agencies, they partner with you for a long duration, and they think of you as a client and they’re trying to deliver results to you. You could see how that would play out, but for AI. The platforms see that money, they see your $700 million, and they want it for themselves. 

I say this as explicitly as I’m saying it because I have Zuckerberg here. He said this on stage at various conferences. He said it to my friend Ben Thompson, who recently interviewed him. I’m just going to read you the quote: “In general, we’re going to get to a point where you’re a business, you come to us, you tell us what your objective is, you connect your bank account. You don’t need any creative, you don’t need any targeting demographics, you don’t need any measurement, except to be able to read the results we spit out… I think it is a redefinition of the category of advertising.” 

So he’s saying, “You, Mark, are going to show up, and you’re going to say, ‘I just need to sell some grills.’” Meta is going to AI generate some advertising, put it in their feeds, and deliver you sales. How do you feel about that?

I think the professionalizing piece is spot on. The multi-year journey that we go on to develop a product and the insights that we get by having the product in 1,000 consumer homes, and all of this feedback that we get prior to launching the product that informs our creative and really allows us to hone the messaging and the testing. I think there’s a model out there where people say, “You know what? Forget all that. Just put out 10,000 pieces of content and see what hits. For the ones that hit, amplify, and for the ones that don’t hit, go away.”

I still believe that with what we do, with the knowledge that we gain and the testing that we do, there is a need for great content, a real understanding of the product, and a real understanding of how the product is going to delight the consumer in their home. I think there’s a role — I call it fishing with a big net and throwing the net out there — but I also think that it is not going to be as overly simple as the way it’s described.

I think that’s the other pressure on rates, though. I can feel that coming, that the platforms will find a way to take money out of the rates that the creators are getting paid. Like Instagram, for example. Today, creators make no money from Instagram. Their money is almost entirely from brand sponsorships and other integrated marketing. I think Meta will some of that money over time. How do you feel about the rates you’re paying to your best creators now, and do you think they’re going to go up or do you think they’re going to go down?

It goes back to your supply and demand conversation and the metrics piece. I think the people who are doing amazing, compelling content will probably be more valuable, and they’re probably going to be worth more. Conversely, I think there’s going to be a whole group of people you were overpaying for, and you’re going to realize you were overpaying. You’re either going to have to negotiate those prices down or decide it’s not a fit. It’s no different than the way you look at TV networks. There are TV networks that deliver you the viewership you want at a certain price, and there are TV networks that don’t deliver it.

Again, I think this is great for the industry. I think this is great for content creators. People have said to me, “Mark, what happens if TikTok gets banned?” The content creator community is here to stay. They will find other platforms. They will go to other places. They will find ways to express their creativity and what they’re doing. They’re providing great insight to people. 

I’ve got to tell you something, When I go to a city, one of the first things I do is I go on TikTok and look for the best food places in that city. There’s amazing amounts of content and information that is so useful. I think in the end, this is going to be great for the content creator community, but it is going to be a situation where those who are doing great work are going to get paid more, and those who aren’t are going to have to reinvent themselves.

Can I ask you an existential question? I know why it’s great for businesses that are trying to sell things. I can see that pretty clearly. I know why it’s great for the creators. They’re making a lot of money with essentially infomercials. I don’t know if it’s great for the people who consume media to open all the different apps on their phone, which are taking more and more time, and be awash in a sea of paid sponsored marketing messages. 

Ultimately, these platforms are just becoming marketing channels. That is the money that drives the entire content ecosystem on every single one of these platforms. How do you think about that? You are a consumer of media as well. How do you experience that?

We want to be relevant wherever the consumer is engaging and consuming content. We want to be relevant wherever the consumer is choosing to shop. I think it is the error of any consumer products company to not go where the consumer is going. I think if you head off to a different place where the consumer is not, and you just hope that the consumer would go there —

No, I understand the company’s needs and why you’re there. I’m asking about you as a consumer of media, when you open TikTok or Instagram and it’s all marketing messages.

Look, as a consumer, I’m consuming content in lots of different ways. I have my Apple News feed that I open up in the morning. I have my Bloomberg subscription that I open up in the morning. I’ve got options. I don’t have to open up Instagram. I don’t have to open up TikTok. I can open it up for the purposeful things I want to open it up for. But there are lots of other ways I can get information. I think it’s really up to the consumer to make that decision. 

I’ll give you a great example. We just put the SharkNinja brand on Brad Pitt’s race car in F1: The Movie. We never thought about investing in Formula 1 or movies in the past, but we were just at the premiere, and SharkNinja had incredible placement. So social media is one place. The point is how are we a part of culture? Culture could be experiential events. Culture could be movies, TV shows, or outdoors. 

I’m fascinated by what LVMH has done on the corner of Fifth Avenue and 57th Street. Their store’s under construction, and they cover the entire store in a Louis Vuitton suitcase. You’ve got people on every corner snapping content in front of it. So again, I think it’s about being relevant where the consumer chooses to ingest content.

We got to add a Verge subscription to your list of subscriptions. It’s very important to me that we throw that in there. 

You’ve given me so much time, this has been great. Last question. You’ve got all these new products every year. As you look out over the next 12 months, what’s the one that we should all be looking out for?

Wow. You’re going to get me in trouble if I tell you.

That’s the idea. You get in trouble right at the end.

I’m really excited about our beauty business and the roadmap we have coming out in hair and skin. I have two twenty-something-year-old daughters. That’s just a category I have a lot of passion for. My wife is a beauty enthusiast. So I’m really excited about what we’re doing in beauty. 

On the Ninja side, I’m really excited about what we’re doing in the kitchen to bring things to consumers that make their homes and lives better. I think what we’re doing with the Luxe Café is incredible. The consumer can get drip coffee, iced coffee, and espresso, and can froth hot milk, cold milk, dairy milk, and non-dairy milk. I think we’re doing that in coffee. I think we’re doing that in slushies. I think we’re doing that in ice cream. I think we’re doing that in cooking. I’m just so excited. The roadmap of ideas we have in Ninja is really fulfilling this mission of positively impacting people’s lives every day and in every home around the world.

Mark, this has been great. We’re going to have to get you back. There’s a lot of stuff I didn’t get to talk about that I really want to talk to you about. So we’ll have you come back soon, maybe before the next grill comes out.

Look forward to it. Maybe fan season.

I’m telling you, once you start seeing fans, they’re everywhere.

Great. Thanks so much.

_{Questions or comments about this episode? Hit us up at decoder@theverge.com. We really do read every email!}

Today, I’m talking with Matt Mullenweg, the founder and CEO of Automattic, the parent company of WordPress.com, Tumblr, and a whole host of other products like the new cross-platform messaging service Beeper. 

This is Matt’s third time on Decoder; back in 2022, we had him on twice, first to talk about Automattic and WordPress broadly and then to talk about Tumblr and the future of social networking. He’s back now because Automattic just turned 20, and I really wanted to talk about how the next 20 years of running one of the most dominant platforms on the web might look as changes to search and AI threaten to change everything else, and various lawsuits threaten to change the nature of WordPress itself.

Make no mistake, WordPress is one of the most dominant platforms on the web, if not the most dominant. Something like 43 percent of websites run on WordPress, in one of its many flavors. That includes The Verge — the backend of our website is hosted by WordPress VIP. So this might be the first reverse disclosure on the show. Technically, we’re Matt’s customer, and like any good customer, I made feature requests. 

Listen to Decoder, a show hosted by The Verge’s Nilay Patel about big ideas — and other problems. Subscribe here!

A big reason for that is WordPress is open-source, and like so many open-source projects, WordPress has a very complex structure. There’s the nonprofit WordPress Foundation that owns the WordPress trademark. There’s WordPress.org, from which the open-source project is managed by Matt himself. Then there’s Automattic, which is the for-profit company that offers its own site hosting and enterprise services on top of the core WordPress technology, and which contributes an enormous amount of code back to the open-source WordPress project.

Understanding that structure is really important because there has been a lot of drama in the world of WordPress recently. Last year, Matt essentially went to war, publicly and in the courts, against a hosting company called WP Engine that competes with Automattic. Matt felt WP Engine wasn’t operating in the spirit of open-source by contributing very little back to the WordPress code base.

So Matt threatened the company with legal action and revoked its access to core WordPress technologies. Many people felt this was incredibly out of bounds for Matt and a violation of his position as a central steward of the WordPress project, and there has been significant fallout at Automattic and the broader WordPress community.  

It’s been a long, drawn-out saga. WP Engine responded with a lawsuit, and Automattic was forced to reverse some of its retaliatory efforts against the company. But the legal battle is far from resolved. That said, Matt was willing to come on the show and talk through some of this thinking here, why he made some of the decisions he did, and also what he regrets about how some of this went down. 

Matt and I talked about the future of the web, too, and how he’s thinking about the changes we’re seeing to search and website sustainability as the generative AI boom continues to upend how people use the internet. Matt is notably a lot more optimistic about this than many of the website owners we hear from regularly here at The Verge, and he’s not convinced AI is going to wreck the web. 

We also talked about Beeper, the cross-platform messaging service that Automattic acquired last year. Beeper got into some hot water with Apple when it tried and ultimately failed to bring iMessage to Android. But Matt is really excited about Beeper’s core product. Automattic has acquired a couple other startups and effectively combined them all to try and supercharge Beeper’s growth in the coming months and years.

There’s a lot in this conversation, and Matt is as candid and sincere as ever. I think you’re going to like it. 

Okay: Automattic CEO Matt Mullenweg. Here we go.

This interview has been lightly edited for length and clarity. 

Matt Mullenweg, you’re the co-founder and CEO of Automattic, the parent company of WordPress, and many other things. Welcome back to Decoder.

Thank you so much. The world has changed. So much has been going on since I was last on. It’s great to catch up.

I feel like we had you on twice in one year, and that was three years ago, then many things happened, and I’ve been dying to talk to you about updates to the stuff we talked about the last time you were on. And then a bunch of new things, including some very dramatic new things, have occurred since last time.

We have some cool acquisitions and launches coming up. So yeah, a lot to cover.

Let’s start there. People are obviously familiar with WordPress. I imagine people are familiar with Tumblr, which is another thing that you were technically the CEO of, I believe. But since then, you’ve acquired other companies. You’ve acquired companies like Beeper and some others. What do you think of as Automattic today? What’s the thesis of the company?

I know you love talking about org charts and organizational structures, so it’s interesting. The WordPress side of the business we call “Ecosystem,” right? It’s like gardening. There’s a vast number of players, and that’s really kind of what we’re best known for. I’ve been doing WordPress now for 22 years. I started when I was 19, and that’s WordPress.com, it’s WordPress VIP, which we’re very proud to have Vox as a customer.

Oh, wait, I need to disclose this. This is the first-ever reverse disclosure, I think, on The Verge or Decoder. Usually, I disclose when there’s a business relationship, but in this case, we are your client. 

[Laughs] Yep, so thank you. We’re honored. 

The Verge runs on WordPress, so the conflict is the other way. You’ve got to keep me as a customer.

Well, I’ll do my best on this. And no, that’s actually the thrill of it too, is seeing publications you follow and things like that use the software, it’s very rewarding. Now, the other side of Automattic we call Cosmos, and that’s the apps, and that’s been a very exciting place to work in the past few years.

Now, you mentioned Beeper, which is actually doing its big public launch this July in New York, so I hope to get you there. We did two acquisitions, Texts and Beeper. We combined them, and we’re very excited. I was actually just with that team a little bit earlier today. The other one [we added] just last week was Clay. So, if you aren’t familiar, Clay is a personal CRM. One of the top requests we heard from Beeper users is like, “Okay, I’ve got all my messaging apps…”

Actually, I should probably say what Beeper is. You have probably more than one messaging platform you use regularly, right?

Yeah.

So the cool thing about Beeper is that it can bring them all in one. WhatsApp, Signal, Telegram, all of that. The other cool thing it does is that it can use multiple accounts of those. So you can have multiple Signal accounts and multiple WhatsApp accounts, all in one device, and you can offer it on your desktop, mobile, everything, and it does it all securely. That’s the new stuff. We figured out how to make this all run locally on your device, and so it’s just as secure as using one of these native apps.

But what we heard is people say, “Well, now I’ve got too much stuff going on. Who’s important? What should I do?” That’s where Clay’s CRM comes in. CRM stands for customer relationship management, so usually apps like Salesforce. But this is a personal one that’s pretty slick.

When you say “personal CRM,” what’s interesting is that the throughline for a lot of what you are doing is that small businesses, businesses of all kinds, use WordPress. They’re on the web, and a lot of what the web is used for lately is a small business storefront, or a business storefront, or some commercial enterprise. Things like a CRM, a text messaging platform, all of that stuff — it connects very deeply to just e-commerce in general.

But you’re talking about a personal CRM. What’s the split for you between WordPress as an enterprise e-commerce company and WordPress as a purveyor of consumer products?

I say we’re very lucky to be part of the generation that was… they called it “the consumerization of IT.” It was led by folks like Slack who came in and said, “Hey, we’re just going to make a great user experience and it’s going to be quirky, it’s going to be fun, it’s not going to be boring, it’s going to be colorful and we’re going to build the business features. So it scales and it does that sort of stuff, but we’re going to start from that great user experience.”

There’s some enterprise software historically that didn’t start there. If you’re on an old SAP install or something like that, no one’s waking up being like, “Yeah, I got to get in there.”

Slack, notably now owned by Salesforce, which is fascinating. That’s the two sides of that equation coming together.

Well, I think these companies, including Salesforce, have been doing a lot to reinvest in their interfaces and everything else. So with Clay — and the URL’s clay.earth; unfortunately, there’s another big company called Clay that does more enterprise stuff — so if you go to clay.earth, it’ll be the personal one. 

So what makes it personal versus enterprise? We start from things on your computer, like your address book. We hook in social networks, so you can put in all your social networks. We’ll kind of de-dupe it. We emphasize things like birthdays. It brings in your calendar, iMessage, and WhatsApp messages right now. That’s kind of what Clay was doing before, and what we’re going to be building now is that it’ll just plug into Beeper, and then whatever you have plugged into Beeper, however many networks, whatever you’re doing there, it’ll bring all those messages in. 

Then it can start to, for example, do fun stuff like sorting your contacts by how close your relationship is, which can do clever things. Like, not just look at how often you contact them, but who’s sending more messages, which way, and is it weekdays or weekends? There’s a lot you can kind of infer once you have communication, and we’re very excited to see where that goes.

I would understand if you were saying this was an enterprise product. I would completely understand why you’ve invested in Beeper and Texts, and why you’ve invested in something like Clay, right? You’re starting a website, you’re going to do some e-commerce, you need an outbound messaging platform, and you need a customer relationship management tool. You want to know who your best customers are. This is all just value-adds to the commerce platform.

What’s the revenue model for these as consumer products? Are you going to charge for them?

Yeah, so we’ll definitely cross-promote this stuff. But what you just said — who are your best customers, that sort of reporting — that’s just all built into WooCommerce and WordPress, so you don’t need to go between apps.

As for the revenue models we’re imagining… Clay already has a Clay for Teams, so your entire team can share contacts, share updates, and you can use it in a team-like fashion. And they’ve got a pricing model there, and they were making revenue. So it was nice to acquire a company that already had a revenue model.

With Beeper, we’re still figuring it out. But what I suspect is there’ll be two things. It’ll be free up to a certain number of accounts, and if you’re a super power user and you want to connect more, there could be a monthly charge. And then the other thing is that there might be certain connections that are always paid. So let’s say you want to connect to a Bloomberg terminal chat, we’re probably going to charge you for that because you’re more of a business user.

Also, a lot of the messaging platforms support business features now, like WhatsApp for business. There’s even iMessage for business. I don’t know if you’ve ever seen this? 

Yeah.

But famously, iMessage, which previously was like, “No APIs, we’re going to crush Beeper,” in a previous iteration, now has a whole integration system for it. So as we support more and more of these bridges to different networks, I think there are a lot of opportunities there.

Is the Beeper architecture still running an instance of viewer messaging apps in the cloud on your behalf and relaying them to you, or are you more integrated now?

There are still two cloud bridges, but part of what we’re relaunching is that we’ve re-architected the whole thing with the Texts technology, so it all goes local now.

So iMessage is coming locally to your phone through Beeper?

iMessage is the one that we do not support on mobile. It is supported on desktop, just like TextIt, in this sort of way that Apple said or indicated it was okay with. But yeah, we’re not going to fight that fight again. We’re way, way, way away from it. Not touching that with a 100-foot pole.

Is the goal here that these apps should be revenue-generating consumer products? Or are they good additions to the enterprise stack that also might have consumer elements?

I’m thinking of it 100 percent as creating something consumer-first, actually, that then has paths if you’re a power user to do more team-like collaborative or business-like things on it. But first and foremost, I want to get Beeper to 100 million users. I feel that’s actually sort of the first product from Automattic that has the potential to actually be really, really large because its usage is kind of a superset of every messaging network, and the power users are the most frequent users on each of those.

Right now, it’s relatively small. No one feels that threatened. If you get to 100 million users and the primary interface for WhatsApp, Signal, and iMessage is actually Beeper, those apps will feel threatened. There’s nothing keeping those companies from saying, “You’ve taken our customer away, we’re shutting you down.” Have you had those conversations yet?

Well, I think the difference is that we’re not trying to take the customer away. We’re trying to give them an interface where they can use the network even more, connect with more people, and use the business features. If they have any way to monetize, we’re just going to link to it. We’re not trying to avoid that. So we want to support each of these networks, which by the way, we’re investing huge amounts to run everything, so we’re trying to be complementary.

Because they want to be the app on your phone through which you do many, many other things. If the app on the phone is Beeper…

The model that we see people use Beeper is that they don’t get rid of the native app. They keep it. Because it’s always going to be something there, like a functionality or something, that you’re going to want the app for. And Beeper is more for managing lots of messages, getting the local LLMs, giving you intelligence across networks, things that are power user features. But I think there are a lot of power users.

So, a strange thing that is happening with Beeper now is that France is the number one country, and it started to go viral in certain ways, and some of that is people wanting to be able to check their messages without getting too distracted. They call it “Friends without Feeds,” but they still go back to the feeds, don’t worry. They’re doing just fine. It’s just sometimes, if you’re in a meeting or something, you just want to take a quick look, that sort of distraction-free mode is really nice.

That’s really interesting. One of the reasons that I’m pushing on this is that as we’re speaking, I think you’re days away from Automattic turning 20 years old as a company. Automattic, WordPress, and these other apps are all part of the fabric of the web. Broadly speaking, about 43 percent of the web runs on WordPress.

Some of these fights that Beepers has had in the past are like how do we build open architectures out of services that are fundamentally closed, use web technologies to pass that stuff to people, and what kind of fights will we have there. There’s the open source fight and WordPress that I want to talk about in depth.

But it feels like here at 20 years old, the web is changing in meaningful ways. And the web as an enterprise platform might be headed toward ever higher heights, and as a consumer media platform might be headed toward ever lower lows. I’m wondering, as you think about these investments, these tools, and the apps versus the ecosystem, whether you feel that tension playing out?

No. So I’m actually going to ask you to expand a little on what you see as these lower lows, because it feels like as we get more compute at the edge, as the devices become more powerful, broadband becomes ever more ubiquitous — you can’t escape it anywhere now with Starlink — that there’s a bit of a sort of swinging back towards these apps and user-centric things. Even the regulatory environment is very friendly.

And that’s what I would pull it apart. As an application platform, the web is, I think, at its peak and maybe with higher highs to come. Web apps are the most interesting they’ve ever been. Every powerful AI application is mostly expressed as a web app, especially on desktop. Google is literally demonstrating Veo 3 as a web app. Google CEO Sundar Pichai is like, “I’m drawing people to the desktop web to use these applications in Chrome on the web.”

Figma exists, right? It’s one of the most powerful design tools, and it’s a web app. As an application platform, the web is at its highest it’s ever been. Some of the regulatory changes, the Fortnite lawsuit, as a transaction platform, the web is going to hit higher highs because we’re going to see more transactions pushed to the web. That’s something else I want to talk to you about.

I’m saying, as a media platform, as a document viewer, the question I’ve been asking every CEO is, “Why would I start a website today?” I would start a TikTok channel. I would start a YouTube channel. That’s how you reach consumers with media. The web as a media platform seems to be at its most perilous moment, and that’s really the split I’m talking about. Applications, transactions, and the web are very clearly at a peak with potentially higher highs to come. As a media platform, media companies are going out of business on the web basically every day.

There’s a lot in there, right? Because you kind of hit the creator thing. We hit social networks. I’ll start with your question: why, if I’m popular on TikTok, would I start a website? Well, one, so you’re not a one-hit wonder, and I think we’ve seen even some of the biggest creators on a certain platform will often have trouble getting as popular on another one.

So you need to develop a direct relationship with your audience because as long as your audience is fully mediated by this thing you don’t control — YouTube, TikTok, Reels, whatever it is — you’ll have a run. But these things change generationally sometimes. People move from one to the other. The business models change, and what they emphasize changes. If you’re a creator who was just all-in on Facebook 10 years ago because you thought nothing would ever replace Facebook, you might be facing some of the same things that these media companies are facing that haven’t adapted and really embraced their users.

I think that the media thing is also kind of complex because we had a real degradation of the user experience and sort of the speed of sites, the way advertising would work, and slow down your browser, and everything. Present company excluded, but for some other media sites, you’d load them, and it’s almost like they’re having trouble. It’s hard to read the article because it keeps moving around as the ads load, and so I felt like that was a death spiral for some of these sites that might’ve over-monetized.

I’m going to go all the way now to the local stuff-

Actually, can I just push on over-monetized for one second?

Yeah.

Over-monetized. You can read that in several ways. I think what you mean is they put too much shit on the page and then the user experience was degraded, and nobody ever wants to go to a local news site again.

The other way to read it is that they had no distribution except for Google or maybe Twitter, and every page view was so scarce that they needed to eke out every single penny they possibly could because that visitor was never coming back. And that’s the distribution that’s going away. That’s why I’m saying that as a media platform, the web is at a low because all of the audience is on somebody else’s distribution, which are by and large closed platforms.

I think there’s also an aspect that you’re competing to be the best in the world, as audiences become more discerning, as there’s sort of this global competition to raise the discourse and have the best analysis. I mean, in some places we see single-person newsletters killing it, as well as media organizations and everything like that, but many others have struggled. 

That’s why I was going to say the local media, because it’s a great example of where we historically had thousands of local newspapers in the U.S., as a geographic monopoly type of thing, and many of them have gone. But I’m going to go back to the ecosystem side of Automattic. 

One of our most exciting mini-companies inside is called Newspack. It’s led by Kinsey Wilson, who used to be chief of digital at The New York Times. He’s sort of taken everything he learned there and is bringing that to these small newspapers with this product called Newspack, which you can think of as distribution for WordPress. So, it’s WordPress plus hosting, plus a bundle of plugins that enable all the things that these small-town papers need, like classifieds and all that sort of stuff. The fun thing about it is they’re learning from all of them and sharing the business best practices. So, porous paywalls, or I mentioned classifieds already, but people really love local news. It’s just that it couldn’t support some of the old business models.

Now, the sad thing is some publications that switch to Newspack actually save hundreds of thousands of dollars. There were some of these legacy software companies that were just charging way too much. It has a whole print component and everything like that, so you can still print it out and distribute it at the local coffee shop and everything. But I’m far more excited about actually growing their revenue through new things that are allowed, like paid newsletters or sports scores. All those sorts of things that, when you go ultra local, you can support three, five, or 10 journalists to cover a small area, which I think is important for democracy.

How are you thinking about the distribution of that? If I were to compare you to, I don’t know, Ghost or Beehiiv or Substack? Fundamentally, what Substack is selling to a large number of its top newsletter authors is growing its audience, right? If you’re Heather Cox Richardson, you’re the most popular Substacker out there. It is crazy that she is paying 10 percent of her revenue to send emails, right? Mathematically, she could get a better deal to send emails than what Substack is offering her based on that cut.

But I think what Substack would say, and what I’ve heard the company say to others, is, “We will generate new subscribers. Our network will provide distribution. That will get you new customers. This is a cheaper way to get new customers than if you move to some other standard email service, and you have to do your own marketing, your own customer acquisition.” That’s the distribution puzzle that they’re solving that appears to be worth it for some people. 

As Google goes away and other platforms stop linking, how are you thinking about solving that problem for the Newspack customer? Are you going to move people around an ecosystem? Are you going to build other forms of distribution?

You said it like it was a set thing that Google’s going away and no one’s going to link to websites anymore. I think what we’re seeing aggregate across everything is that there is a lot more traffic being driven by the OpenAIs and the Perplexitys of the world. This also feels like the early days of that.

I don’t know. Maybe if LLMs never hallucinate again, people will stop visiting links, but for now, I actually find myself sometimes clicking on three or four things, even from the Google summaries that they put at the top of the search results. So I’m probably clicking on more things than I used to. When I just had the 10 blue links of the old Google, I would pick one of them and then spend time on that webpage. Now, here’s a summary, and it links to three different things, so I find myself exploring a little bit more. What we’re seeing aggregate in traffic is that what happened from 2020 to 2022 was actually worse than what’s happening now. So things are actually starting to come back a bit. I don’t know. Have you seen that with your traffic?

I think, broadly, what we see is the same thing as everyone else, which is that the shape of Google traffic is changing, and some Google services are sending more traffic, and some are sending less. They only just started saying what traffic comes from AI Mode and Search Console, so I can’t actually tell you. This is like, as we’re speaking, I believe this happened yesterday, that they started breaking out AI Mode and Search Console. 

So, it’s too early to say, but we have reported on website after website that has just disappeared. The Daily Dot went from millions of Google referrals to thousands, and then the business was over, and that’s the end of The Daily Dot, and it doesn’t exist anymore.

Remember back in the day, Jason Calacanis had Mahalo, right?

Yep.

Google has always been mercurial, especially if you optimized your business around that. So, imagine that one of these creators was only on one network. You want to have many paths to the ocean. That’s what I’d recommend for any business, really, right? You don’t want to stake everything on just one partner or one business model.

I think the question I’m asking you is, there are vanishingly few paths left to the web. There are lots of paths to the web as applications. I think there’s going to be an increasing number of paths to the web from iOS apps looking to escape transaction fees by doing commerce on the web. The paths to the web as media are obviously changing. And it sounds like you’re saying you are actually seeing more traffic from the AI search engines than people expect.

It goes to different people. So, in aggregate, I am optimistic. In the short term, there’ll be a changing of the guard, perhaps, or maybe it’ll reward different sites. Again, one of the things that I think hurt some of these media sites that we talked about before, the ones with too many ads, Google started taking in site performance as part of its ranking. So, if you had a pop-up there or something like that, they would start to de-rank you a little bit. When you think of the incentive of these engines, they want the user to have the best possible experience.

Yeah. I mean, WordPress is 43% of the websites out there. I’m assuming that you can see-

We see a lot, yes.

You can see a lot. Are you seeing more or less traffic from Google than a year ago?

I don’t know off the top of my head, but I think it was flat-ish to some and then up for others.

But you haven’t seen these dramatic declines that are wiping out some publishers?

Not in the past year, no. We saw some of that four years ago.

Interesting. So, you think it’s the same amount of traffic, which is expressed differently across your network?

That’s right, yeah. And more of it is starting to be driven by LLMs.

That’s really interesting because Google will happily tell you the same thing, and then we get website owners in our inbox saying, “They took all our traffic away.”

I believe them, actually.

You hear that across the board. Business Insider just had layoffs because their Google traffic went away. That seems like the dynamic where maybe there are going to be a bunch of new media websites that have a bunch of traffic driven to them by engines.

But to your point, what’s going to be the backstop against that? There’s only one referral source left of huge value, and it’s Google. Maybe these new LLM companies and these search engines will drive some traffic over time, but there isn’t another user behavior that drives a lot of traffic to the web in that way. 

There are search and search-like things, and chatbot-like search. But there used to be Twitter, which would drive a lot of traffic to some websites. Facebook used to drive a lot of traffic to some websites. Those other things have faded away. Do you see something else coming up that might balance out the incredible search dependency?

What people sleep on is the Google articles. I don’t know what they call it. It’s not Google News, but it’s that thing that if you scroll to the left on an Android or you open the Google app. 

Google Discover. I know entire media companies whose business is Google Discover, just programming Google Discover, which to me feels the most brittle of all. 

I actually dream of a day when Twitter doesn’t de-emphasize links again. So who knows? There are a lot more niche social networks. For example, if you’re an engineer, Hacker News from Y Combinator, but there’s one called Lobsters, which can have cool little spikes. 

Honestly, I think the video stuff actually can still drive really great web traffic. People allow links in them now. They talk, or they just say something, and people click on it. It’s like this thing we saw for Beeper. The French usage surpassed English just from this one viral Reel. So, that was people going to a website.

Fair enough. I want to get to the Decoder questions because I want to talk about the other side of the web, which is the open web and the open-source nature of a lot of the stuff you work on at Automattic and WordPress. You’ve described your chart as Ecosystem and Cosmos. Cosmos is the app side. Ecosystem has the core technologies you’re building. You’ve had a bunch of buyouts and layoffs this year. How big is WordPress today?

We’re about 1,500 people.

Is that substantially smaller than it was at the top of the year?

Yeah, like most tech companies, we hired a lot in the 2020 to 2021 range. And also like most tech companies, we found we can be more efficient and move a little bit faster with smaller teams. I don’t love that, but it is a business reality.

Did anything about your leadership structure change? Did anything in your org chart change? Or is it still the two main groups?

Yeah, actually. Internally, we just did a big switch, where we have traditionally been sort of independent product silos with their own engineering, marketing, everything, and we just did a huge centralization effort. So, product engineering and design are now all centralized, and we have some new leaders there as well. We have a new colleague named Pedraum Pardehpoosh, who was at Apple for 15 years at the App Store and Airbnb. He’s helped us really reimagine how we think about product, which I’d say historically we’ve really… because my proclivity is very much on the engineering side. So that’s been really nice and really exciting.

It is actually a very different organizational structure. I think I said this last time, but I feel like all org structures are just a series of trade-offs, and sometimes you just need to make the other trade-off for a while. So, if you’ve been in one place for too long or doing things one way, you need to do the opposite to break out of whatever rut you’ve found yourself in. It could just be how you’re thinking.

There’s a real pendulum between centralization and decentralization at most companies, especially 20-year-old companies. Was the decision really just, “We’ve been doing it this way for a while. We’re just going to swing the pendulum the other way and see what happens.”?

[Laughs] Yeah. I mean, that wasn’t just it. It’s not like, “Oh, let’s just swing the other way.” It was really like, “Hey, what are some of our issues here? Ah, we’re not having some global quality. We’re getting some local maximums in certain areas. Performance management across all of this can be inconsistent. Let’s try one roadmap for the whole company and see what that looks like. Should we try this ‘every six months’ thing that a lot of companies are doing?”

We examined all of that and then looked at how that fit with what we’re hearing from the customers, what’s happening with the business and the environment, what we’re really excited about, and this is what we ended up with. We’re only two months into it. So, there are a lot of changes in the first three to four months of the year, and it’s kind of been baking the last two months. To be honest, I won’t be able to tell you if it worked until probably towards the end of the year. 

What are you hoping to get out of it?

All the things the business wants. So I want happier colleagues. I want better business results. I want better retention and acquisition. I want Beeper to get to 100 million users. We have all our ambitions. Ultimately, I want to solve open source for publishing, commerce, and messaging. This is my life goal. 

Everything in between is a means to an end. I try not to be overly attached to almost anything to see what happens. So much so, I’ll tell you something a little wild, which is that we were famously like the most remote distributed company ever. There are many others, but we were pretty early, and I advocated for it quite heavily. I’ve actually been exploring whether we should bring a team entirely to New York for six months to do a sprint. So essentially, that co-locates, to do the opposite of remote, to see what would happen.

Actually, I love the idea of co-working weeks, maybe not co-working for six months, but co-working weeks. We are pretty remote, and I always think, “Well, we can get together for an offsite,” but then the offsite is its own process. But actually, I just need everyone to work in the same room for a while and be in The Office together. Like the show The Office, not the office office, to like to goof around and tell jokes and just watch each other doing the actual job, not the job of making decisions at an offsite. Let me know how that goes. I’m very curious. We haven’t done it yet, but I’ve been thinking about it a lot. 

A lot of what’s happening in the WordPress community is kind of a reflection of the fact that being virtual all the time breaks some trust, right? It feels like there are some trust issues with WordPress and the larger WordPress community that you might have to work through. Do you think any of this restructuring or any working together will help you through that?

It was tough during COVID because the secret ingredient for Automattic has always been our meetups. The secret ingredient for WordPress was these WordCamps and also meetups with Meetup.com. When that went to zero during the pandemic, we all know about it, but I think that there are still echoes of that period of time, which stay with us today.

I’m so excited it’s back. Part of the reason I’m on this side of the world is that I was at WordCamp Europe. It’s a couple of thousand folks. We had a lot of new folks coming. It really energizes everything. Our contributor day had like 600 to 700 people at it. So, those things are really the gateway drug, if you will, to open source participation.

The last time you were on the show, I asked you about your decision-making frameworks, which I ask everybody, and you said your goal was to push as many decisions down as fast as you could, and that you documented everything across WordPress. There was an internal blog system that you guys used. Is that still the case? Is that still your style of decision-making?

Yeah. I would say the main thing that’s changed is that we started doing some of these product reviews. So, on a periodic basis, I’ll go to basically every product in the company and we do presentations, and get feedback. Again, not something new. Something many other companies have done for a long time.

But the thing that actually made me realize we really needed to change is that last year, I took a sabbatical for three months, which is a benefit Automattic offers. Every five years, you get three months off. I had never done it, so I was setting a bad example. So I’m like, “I’m finally going to do this.” Also, that was interesting, just to get a little space. But then, when I came back, I was like, “Okay. What can I do differently?”

So I did 100 days of support with all of our different products, shadowing people, and talking to customers. I came out of it with a real sense of where we had accumulated technical debt, where we’d accumulated cultural debts, and where we had golden handcuffs in our business model, which I think is one of the most dangerous things. Because it’s not the business going down, but you can kind of see how, “Oh, if we just stay in this forever, it’s not a good look five years from now or 10 years from now.” So that was part of why I started recruiting some of the new executives we brought in and thinking about more drastic changes to how we worked.

What are some of the golden handcuffs you had in the business?

Well, just to give an example that you mentioned, our enterprise business is incredibly strong with media, and in some ways, we’re almost reaching a saturation point. There are not that many great publications left that we could bring on, and some of those publications are feeling the squeeze. 

So, just industrially, from an industry point of view, there are currently — although I think this will come back — secular headwinds to that business. If we were all media, that would be trouble. But of course, we have other things, finance, a lot of startups, Facebook uses it, all these other things. But is the product as well suited? So, that’s something we have to think about.

All right. Let me ask you about the big decision. You decided that WP Engine, which was a rival WordPress host, was free-riding on open source. You decided that you were going to cut them off. Many, many things happened. I just want to start at the very beginning of this. Your decision-making process involves all team decisions. Everything is pushed down. Everything is documented. Was the decision to take the fight to WP Engine a team decision or a Matt decision?

That was a team one with a lot of community feedback.

Walk me through that specific decision, that you’re going to put a lot of pressure on this rival hosting company.

I don’t know if I can right now. I think there’s a period in the future when we can dive a lot more deeply into this. Well, you’re a lawyer, right?

My job is to get you to talk. I was a horrible lawyer.

I think something I’ve learned in this process is not to talk as much while it’s going on. We’re very much deep, where both sides are spending millions of dollars a month on lawyers. I think that there will be things that play out, but the legal system moves a lot slower than I would like. So, we’re a little bit in the middle of it right now.

But you did put a lot of pressure on this company. You cut off some of their access, and you changed some code in different ways to further cut off their access. A lot of people saw you making unilateral decisions in a way that didn’t feel compatible with open source. Were those just Matt decisions, or were those also team decisions?

I take full responsibility for it all. So, ultimately, yes. If people are unhappy with it, they should hold me to account.

One of the ways that people held you accountable inside of Automattic was that you said, “If you don’t like it, you can leave,” and a bunch of people took buyouts and left.

We did a very generous six-month and a nine-month buyout offer. We called it an alignment offer. So, at that point, we were at our very peak, around 2,100 people. Actually, we’d already started coming down. But it was clear that there were some folks who just weren’t in line with where the business was going, or we had some folks who already had another job. It was this mix of everything in there.

So, the way I read it from the outside was that Automattic is a very idealistic company. You are a very idealistic person after all. All the times we talked, that’s my impression of you, is that you are a very idealistic company — WordPress and Automattic, very idealistic projects, particularly the Ecosystem side, the open source side of WordPress. 

And here is Matt, the benevolent dictator for life of WordPress, saying, “I’m going to squeeze this player out of the ecosystem in a way that reads against the ideals of open source itself.” Some people at your company were so incensed about this that you said, “You can walk, I’ll pay you to leave.”

That’s not how I would fully characterize it. So, first and foremost, I will say that it is true that my bias is towards optimism and radical openness. That’s my whole career. The downside of that, and this is not the first time this has happened in WordPress’s history, is that that can be taken advantage of. This is probably the fourth big time that there’s been a controversy like this in WordPress. It’s the first time in this media landscape, or when we’re this big. But there have been similar things in the past where, as a community, we had to say, by the way, not all the community, but a good portion of it, “Hey, there’s something that’s not okay here. And if we don’t stand up to it, it could threaten the future of us existing at all.”

I believe this was one of those decisions, or one of those situations, rather. I’m sure with the benefit of hindsight, there could be things that were done differently, probably on all sides. There’s a lot that we’re doing to make sure this particular thing doesn’t happen again. So, we’ll only make new mistakes. I will say that nothing like this has quite happened in the past, and I hope it never happens again in the future.

Wait, can you be specific about what you think happened that you need to prevent from ever happening again?

Let me think about how to put this. I think where WordPress has had the greatest success is when we can get everyone around the table — the commercial folks, the agencies, the developers, the geeks, and the anarchists. We get us all around the table and say, “Well, what are our shared goals and how will we achieve them?” Even the most rampant capitalist knows that you can over-squeeze that lemon. 

You don’t have to look far to find other open-source projects where the commercial interests sucked the life out of the project. That could be talent, it could even be as simple as… I’ll give one example of something people have criticized us for, and we get a lot of pushback on. It’s like, “How come the WordPress.org directory — the app store, if you will — doesn’t allow you to buy stuff?” We allow commercial things, but you have to buy them from the developer directly. We don’t have the one-click type thing.

It’s actually a very complex sort of incentive answer. As we saw other open-source projects do that, and some of them did it kind of early, what shifted in that community was a collaborative nature, both for the core software and for add-ons, to every person for themselves. So, imagine you and I were both plugin developers, and I created a better widget and you had another widget. Now, often, what happens in WordPress is I say, “Hey, what you have is cool. Let’s combine that.” And we’ll just combine the plugin. Or say, “Hey, this should be in Core. Let’s build it. Let’s submit it. Let’s get this so everyone has it.”

Now, if you and I are both selling that, we might each be making $20,000 a year or something off this. And so, there’s a local incentive for us not to open source it to the Core or to work with each other. If you play that out over the years, what happens is probably what happened with Joomla, where users felt nickel-and-dimed with every single feature. The core software can atrophy, because all the best development went into these extensions, and it hollowed out a bit. It’s my view from the outside.

You said “we” when you talked about WordPress.org. I think one of the things that a lot of people realize throughout this entire saga with WP Engine is a quote from you, that you control WordPress.org. This is a quote that you gave to us.

[Laughs] I regret that.

“WordPress.org just belongs to me personally,” said Matt Mullenweg in an interview with The Verge.

That’s been taken out of context so many times. I regret ever saying that. It’s the worst thing ever.

So, you’re saying that’s not true?

Because you were asking about specific ownership. Like, okay, what entity? I think you even said, “What entity is it that owns this?” which is very different from how the site runs, how decisions are made, how the code works, and everything like that.

So, why doesn’t Automattic own WordPress.org?

Why doesn’t Automattic own WordPress.org? Because I wanted to keep it separate, especially in the early days of Automattic. It was controlled by investors. So, I wanted this balance of power. 

WordPress predates Automattic, by the way, that there was this sort of a thing, which was not just the C Corp working for the fiduciary responsibility of shareholders. But that’s something that, yes, I kept separate and technically just I support, but I’m one of many, many people who support it. 

If you look at how WordPress.org is run, just how everything works, it is the result and the fruits of clearly tens of thousands of people and hundreds who work on it daily. So, I was very sad that it got mischaracterized as just me making all the decisions and just being the thing that belongs to me. I do regret that a lot, I will say that.

I appreciate that you regret it. I’m going to push back on the fact that we’re mischaracterizing, you saying the following.

I didn’t say you mischaracterized it.

Sure.

I said a lot of other people now take it out of context and are like, “We can’t have this thing rely on someone’s personal website.”

But that is an outgrowth of this quote and this fight. I’ve seen others say there’s a supply chain weakness if you have a WordPress dependency, where Matt Mullenweg owns WordPress.org, which is the plugin repository and the update repository. And if he gets mad at you, he can cut you off, which is what happened to WP Engine, right?

And it was reversed.

Well, sure.

So, my authority to do it in the long term is apparently not that big.

But you had a commercial dispute, and because you were just in control of this, you were able to cut off their access. And I think a lot of people-

We had a moral dispute, actually. It’s a moral dispute, as well as a commercial dispute. It’s an ethics dispute.

If they had paid the money, I don’t think you would’ve had a moral dispute. If they had said, “We commit this many engineers to the open source project,” would you have still had a moral dispute?

I don’t know if I can comment there.

Well, I’m asking because, to me, the dispute reads as if this is the classic open-source free-rider problem. There’s a big, vibrant open source ecosystem. Someone’s just going to take it, run the software, and sell the hosting. Maybe they provide a better level of customer support. They’re not going to pay into the project. Now they’re free riding on what should be the margin that funds the project as a whole.

That, in the abstract, has happened all the time throughout the open source community. Usually, the answer is, well, that’s just the price you pay for open source. This is a thing that happens. This is a thing the licenses enable. But the point of open source is that, eventually, the free rider will get far enough away from the thing that they will feel required to pay back into it to do what their customers want. This is the self-correcting mechanism. It sounds like you just didn’t see that happening, or you felt that was never going to happen.

By the way, there are probably $10 billion of hosting companies that I don’t feel are a threat or harm to the future of WordPress. So, I think that you can say I’m crazy or off my rocker, or whatever, but I would like to point out a long career with very few things like this happening, and that not everything is public. If I really felt like it was that much of a threat to the community, yes, I’m going to stand up. But we try to run things in a way that that happens very rarely, or not at all.

Do you think that a good solution here is for you to cede more control of WordPress.org back to some sort of central body? Because that feels like one of the main criticisms of this entire situation, is that you personally have control of what feels like a very centralized dependency for the WordPress ecosystem.

Yeah, and I can see why people see that because I’m really the spokesperson for a lot of these things.

Well, again, I know you feel this quote is mischaracterized. I’m just saying that I’m looking at a quote from you to us that says, “In my role as owning WordPress.org, I don’t want to promote a company which is legally threatening me in using the WordPress trademark. That’s why we cut off access from the servers.” To me, we quoted it. I don’t feel like we’re mischaracterizing it. But that’s you saying, “I have an enormous amount of power here and I will use it.”

I feel like I have an enormous responsibility to the tens of thousands of people who contribute to WordPress.org and WordPress on a regular basis. I feel like I have a responsibility to be the focal point for the arrows and the hate. So, developers who are actually writing all the code for WordPress and people who might not feel comfortable being the face of some of these objections don’t have to be. I’m happy to do that for them.

You’re 20 years into it. Open-source projects rely on characters like you a lot. Linus Torvalds, I think, is the most famous example of what we literally call “benevolent dictators for life.” At the end of the day, you can have all the hippie ideals you want, and then you need one person to take the arrows. That’s what you’re describing, one person to make some decisions and hold the value. Again, this is a pattern that repeats in many, many, many open-source projects.

Sometimes, that might be representing a minority. In many of these fights, it might not be the most popular thing to do. You really have to believe it’s the right thing to do, though. And history will show whether you’re on the right side of it.

How long do you think until this dispute is resolved? Is it just going to happen in the courts? Are you going to settle?

That’s a good question. I wish I could answer that. I really, really want to get back to the most collaborative version of WordPress possible. I think the complement, WP Engine, has an incredible set of talent. They have a lot of customers who are happy. I think they have a lot they can give back, to do, and to grow WordPress and their use of it. So, yeah, I’m optimistic. I’m generally pretty optimistic. There have been times I wasn’t, though. And I will say that the legal system and the whole law thing are incredibly challenging. If you’re an entrepreneur listening to this, I would say avoid it as much as possible.

We’re lucky to work with incredible, credible lawyers, but I think my disposition is much more on the product and engineering side. So, I remember that Steve Jobs quote where he said, “Look at how you’re spending your day and how you feel at the end of the day and everything.” And definitely, I want to get back to where that’s where I’m spending the vast majority of my time.

I just want to go through some of the moves here, and then I promise I want to talk about Tumblr to wrap this up. Mostly, I just want to talk about Tumblr with you, but I just want to go through some of the moves here. You cut off their access to WordPress.org, and you rewrote some plugins in a way that I think people felt was way over the line. You called them a “cancer.” Automattic stopped contributing to WordPress Core. You ramped it down. You’ve ramped it back up. Do you think that you were too aggressive? Do you think you went over the line? A lot of those moves are ones you’ve walked back.

I don’t know yet. We’ll see.

Why’d you walk them back? For example, not contributing to WordPress anymore? You walked that back. Why’d you walk that back?

So, remember I said you sometimes have to try the opposite. [Laughs] I mean, after 20 years of Automattic, there’s basically not a day, including weekends, that we haven’t done some work on core WordPress or other open-source projects. And again, not just me. When you’ve devoted so much of your life to giving back to something and it’s a very, very small group, but there’s some of that that’s just attacking you, everything you do, and you sometimes need a little break. So, think of that almost like an Automattic sabbatical, just like a person might need a sabbatical. 

What I was really hearing internally is that people want to regroup. It’s also a good opportunity because we’re making some of these other big changes to bring some, for example, core WordPress engineers over to WordPress.com and say, “Hey, what can we do? What could make this a better WordPress experience?” It was also an opportunity to reboot some of our development efforts that I’m glad we did, actually. But we missed it.

You missed doing it.

[Laughs] I can’t quit it. Honestly, I think I’m going to have to do open source for the rest of my life. It was torture for me, because we were like, “Okay, now I guess we need to not do any more relief. We don’t have enough stuff for a release, and so we’re going to have to push that.” That broke my heart, and then I just couldn’t stop thinking about it because we kept developing technology. And one thing we do is develop it on the Automattic side, and then we bring it to the open-source community. So, we had all this stuff developing, and there’s real-time co-editing and really exciting stuff. I’m like, “Oh, I got to get this out there.”

I’m going to tell you right now, the entire Verge team just heard you say real-time co-editing. When are you shipping simultaneous editing? As you know, when Vox Media moved to WordPress, this is the only thing I asked you for, and you told me it was coming. When is it coming?

I’m excited about it.

Is it this year?

It’s a “this year” thing.

It’s this year?

Murphy willing, yeah.

All right. And we’re going to hold you to that. By the way, you mentioned an Automattic sabbatical. I connected your sabbatical to this fight. There was a lot of hostility, a lot of back and forth, a lot of just pent-up anger. And then you took a sabbatical. Did this push you to do that?

No, that was like eight months away [from the lawsuit] or something. It wasn’t that close.

Okay. All right, let’s talk about Tumblr. You bought Tumblr ages ago from Verizon for some reason.

I actually just ran into [Verizon CEO] Hans Vestberg at an event. We talked.

I don’t mean you bought it for some reason. What I meant is Verizon owned it for some reason, and the idea that you bought it from Verizon is still very funny to me, because why did they ever own Tumblr? You migrated the entire backend of Tumblr to WordPress. 

No, no, we have not. We put that project on hold.

I swear I read a press release.

We announced that we were starting work on it.

Is that still not going to happen? Or why’d you stop it?

What we decided is that we want to focus as much on the things that are going to be noticeable to users and that users are asking for. This was more like an infrastructure thing, kind of like any big re-architecture. I still want to do it. It’s just cleaner. But right now, we’re not working on it.

One of the reasons that you wanted to do that back then, or at least when we first talked about the very idea of doing this, was that you saw some opportunity for ActivityPub. And there’s an ActivityPub plugin in WordPress. You bought the plugin from the developer and hired the developer. I’ve met him, he’s lovely. You can see, “Oh, that would really work for Tumblr. You move Tumblr to this backend, you have this plugin, and now you’ve got Fediverse Tumblr.” Do you still see that as an opportunity?

Yeah, so that would’ve been a free way to get it. And so that was one of the arguments for migrating everything to WordPress. And still going to do it someday, but in the meantime, I think if there was a big push to implement Fediverse, we would just do it on the Tumblr code base.

Is Tumblr growing? What are the user numbers there right now?

I would say Tumblr has a passionate, “never going to give you up” cohort of users, and it still acquires users at the young end. I’ll also say that the elements of how it works, I think, are very confusing if you’re new to it. So, one thing we’re thinking about is how we can make it a bit more accessible. And also, the constant thing you deal with at any social network is how to keep it friendly. So we want it to be someplace where you can go on the internet and leave refreshed, interact with art and artists, and your friends. On these networks, you have to do a lot of work to keep out the spam and the bullies.

You’ve personally waded into some Tumblr content moderation controversies. 

Oh my goodness, yeah.

Particularly around trans people. It’s a very bad time for trans people in America right now. Is that something you still want to be the face of? There’s a lot of pressure on that community, and that community is very, very focused on Tumblr.

Yeah, and so what I learned from that is that… I jumped in because it’s a community I care about deeply and want to show support for, but everything I did to try to show that this wasn’t targeting, then got twisted, or turned around, or a lot of misinformation. So, the learning is, and by the way, many other people would’ve told you this, is just don’t comment on content moderation decisions. Just point all that to the terms of service, the team, and everything like that. More explanation does not make it better. 

Again, probably one other lesson from 2024 is that, particularly in open source, often we talk through it, we post through it. And we have these vigorous debates, and we come out the other side, often with a consensus, or at least a shared view of reality. And in the media landscape of today, that doesn’t happen, sometimes ever. So, it’s just better not to try to engage with everything. And, as an early internet person, this drives me crazy sometimes, but I think I’ve learned that lesson.

One of the reasons I’m asking about this, again, is that this is just a bad time for a lot of marginalized communities in America. I think of Tumblr, I think of young people, I think of queer people, I think of people of color. A lot of the culture begins on Tumblr, from those communities. It is not clear to me that the big platforms are committed at all to making those communities feel safe any longer. They might’ve been.

Why do you say that?

There was a time when, performatively, these platforms wanted these communities to feel safe. I think Instagram is deeply aware that Instagram is not the same without gay people and Black people on it. They know, they just know, but they are playing a different game with the Trump administration.

Tumblr is sort of out of the limelight. Are you going to do anything to try to make those communities feel safer there? It feels like an opportunity to take people from the big platforms and put them in a place where creativity and free expression are more valued in that specific way.

I know there’s a narrative that these bigger platforms have changed their mind there. I would challenge that. They might be doing things performatively there, but I bet if you went to the on-the-ground person who does the very, very tough job of looking at the worst stuff on the internet to protect the rest of us, that’s someone like a firefighter or a police officer. I think we will appreciate that job so much more in the future because they’re essentially sacrificing some of their mental health to protect the rest of us. I would say they are — with very, very few outliers who get weeded out and fired immediately — there for all the communities you spoke about, and driven by a sense of trying to protect and help safety.

On Tumblr, it’s the work we do every day, and I want us to be, again, judged by the results and the actions. It doesn’t mean that there will never be a mistake. In fact, we’ve actually had to let someone go before because they weren’t operating in line with the values that we have as a company, or in line with our terms of service and everything like that. But yeah, that is the exception that proves the rule, I believe. It’s hard to see that from the outside, though, because you don’t see the hundreds of thousands or millions of things that are moderated every day. You see the one time it messes up.

Yeah, I understand, broadly and across the industry. I certainly understand that content moderators, no matter where they work, have horrible jobs.

I’m just saying that I look at Meta, which is saying very publicly that it’s shutting some of this moderation down and going to use community notes, and then Mark Zuckerberg is going to be in the White House. I think, “Well, there’s a whole community there that feels under attack by just the gestalt of that. Just the way that feels is bad. And Tumblr exists, and Tumblr has always been the place for those communities to go. It is what makes Tumblr, Tumblr. 

I’m just wondering if you see it as an opportunity to claw back some share from the billionaire-owned big platform companies that feel like they’re playing a vastly more political game.

Yes, and we do see waves of people come over when these incidents happen in various places. I think what we have to do now is retain those folks because the app needs to be super fast and performant. The ads need to be good. By the way, some of the criticism I made of media things, you can make about some of the advertising we have in the Tumblr app today. Not all the ads are to the standard that I think we should be held to. The app needs to just be more intuitive than I think it currently is.

I think what happened is that Tumblr invented so much stuff. It was like the pioneer that had images on posts, things like that, before any other social network did. We got kind of attached, as a team, to some of the different ways we did things. Now, in the meantime, across every social media platform, there’s almost like a set of primitives that are universal, like the Platonic ideal of certain interaction modes or how things should work. For instance, replying, commenting, liking, and liking something versus viewing the likes. 

There are affordances in the interface with so many of these things. And when you drift too far from that, it just creates a lot of mental friction when you use it. So what we have to navigate is maintaining the character of Tumblr, and everything that people love about it, while also not frustrating you when you go between different apps or different experiences.

Everything is turning into TikTok. Do you think Tumblr needs to turn into TikTok?

No, I don’t think so. And there are definitely ways I want to evolve the business model. We’ve invested a lot in subscriptions and things like that. Self-serve, first-party advertising, which we’ve gamified. You can advertise someone else’s thing. So I think those models, at scale, could be a non-TikTok incentive. Like, it will be smaller than TikTok forever, but it could create different incentives in the business model that I feel pretty good about.

Is Tumblr sustainable today?

It is still not profitable. So we’re still supporting it and subsidizing it with our other products at Automattic.

How much runway do you want to give it?

Everything. Obviously, we’ve invested a ton in Tumblr. I’m a believer in its future. And so that’s part of why I want to make it sustainable, because that means it doesn’t have to go on the benevolence of myself or anyone else. It can stand on its own.

There was a report last year from 404 Media that part of the revenue model would be to sell Tumblr data to Midjourney and OpenAI for training purposes. Is that true? Is that going to be part of the revenue mix?

Gosh, where are content licensing things? So, Automattic has done content licensing deals in the past. Often, it’s things that people already had, because it was on the web, so it was already part of the indexes and other stuff like that. I don’t think that’s going to be a big part of the revenue model going forward, and the whole AI content thing, fair use, everything, feels like the question that will work itself out in the legal system over the next five to 10 years.

So wait, do you have a licensing deal for OpenAI to train on Tumblr data?

I don’t think I can comment on which deals we have or which we don’t, but I will speak more generally about how the AI content licensing thing feels very much up in the air.

Do you want to have those deals?

I want creators to get paid for their creative work. Absolutely.

So if you had that deal, you would pass the revenue through to Tumblr creators?

Well, passing revenue through, you have to have a certain threshold of revenue. [Laughs] You have to know your customer, and you have to get tax information. So there are thresholds at which I think we need to get to, where this can become part of what can contribute to creatives. I don’t see a path for that right now, but it’s definitely something that I know at least some people at the AI companies are thinking about. And I’m hopeful for it, something there. But I don’t know what it’ll be. I don’t think it’s going to be micropayments. I don’t think it’s going to be crypto. We’ll see.

I want to end by just talking about the future of the web, and really just about the open protocols: ActivityPub, AT Protocol, and Bluesky. The last time we spoke, ActivityPub felt like it was going to be the winner, just by default. Threads had adopted it, everyone was talking about it, and there were a lot of services being built on it. You were really high on it.

Then Bluesky showed up, and all the people on its network are sort of on that protocol, right? Threads is, obviously, a big player, and they’ve launched a bunch of Fediverse features with ActivityPub, but it’s not driving adoption, maybe, in the way that Bluesky’s community might drive a bunch of adoption of AT Protocol. There’s stuff that bridges them together, but we’re having a protocol fight. Here we are having an open interoperable protocol fight. This is some Matt Mullenweg stuff. How do you think that’s going to play out?

Oh, that’s a good question. I think the failure mode of internet idealists is protocol-first thinking. So what I would love to do — and actually, maybe I should host this — is a summit where we get together and don’t argue about how the servers are talking to each other, but what our current and potential audience, the customers, the users, wants the most, and how are they not being served by the competition. Because that’s the other thing we do, we say, “Oh, we just make this network, the people will come,” and miss all the network effects and the lock-in effects of these social networks with billions of people on them. So it’s tricky. 

Even email, sort of the most famously open thing that’s still running, is effectively closed down for most people. If you run your own email server, most of your email is going to go to spam, to whoever you send it to, on Gmail, and stuff like that. So we’ve had a re-centralization of a decentralized protocol. And this is the kind of thing that can happen if you don’t have the right incentive structures in place for something that is very, very open. And this is kind of like a version of the problem that I’m trying to avoid in the WordPress community and the open-source projects that we support.

So, I wish I had an easy answer for you. I think the best way that we’ll get there is with a relentless focus on the design, the user interface, and iterating as fast as possible, and not getting locked in these local maximums of what your existing user base might be. Sometimes you have to do something incredibly unpopular with your existing user base to get to that next level, to unlock the order of magnitude of growth that’s the billions of people who don’t use it yet.

Another mistake we make in open source is that we talk about how the community wants this, or the users want this, but we have to account for the voices of the 7.9 billion people who don’t use WordPress yet. And that’s tricky.

I was really high on interoperable social networking, and interoperable sites using ActivityPub or AT protocol. It doesn’t matter to me, actually. At the end of the day, I just want to see more interoperability of these networks. Do you still think that’s going to happen?

Yeah, if I had a bet on one, actually, you know what I’d bet on is the Matrix protocol, the dark horse in the corner.

A third one out of nowhere. Just briefly explain what that is, and why.

Matrix is taking more of a messaging-first approach. So think of it kind of like an open-source Slack. It’s what Beeper actually used as a backend in its cloud version. There are also cool extensions to it that can do things like pure peer-to-peer. That feels like a disruptive technology, that if I had to just put five, a bet for five bucks on it, a long-term call option or something, I would maybe put it on that one.

All right, Matt, this has been great. You’re going to have to come back again sooner than three years. I feel like I have a million more questions for you, but this is so great. Thank you for all the time.

Well, maybe we’ll celebrate the co-editing.

The day you launch it, I’ll give you a full day, a 24-hour live stream on Decoder, the day you launch co-editing.

Awesome. Thank you. It’s been a pleasure talking. And thank you so much for what you do, and also for advocating for the open web and open protocols. I really appreciate it.

We run the last website on earth, Matt, you know how it is. Thank you.

_{Questions or comments about this episode? Hit us up at decoder@theverge.com. We really do read every email!}

Correction, June 30th: An earlier version of this article misstated the steps of the legal battle between Automattic and WP Engine. Mullenweg accused WP Engine of trademark infringement and cut off its access to WordPress servers; both companies sent cease-and-desist letters, and then WP Engine, not Automattic, initially filed a lawsuit.

Today, I’m talking with Hinge founder and CEO Justin McLeod. Hinge is one of the biggest dating apps in the United States — it’s rivaled only by Tinder, and both are owned by the massive conglomerate Match Group, which has consolidated a huge chunk of the online dating ecosystem.

A fair warning here: I’ve never actually used a dating app — the algorithm that matched my wife and me was the university housing lottery, which put us in adjacent dorm rooms in the fall of 2000. And my wife is now a divorce lawyer, so playing around with these apps seems a little bit risky. So I always end up approaching conversations about dating apps a little bit removed.

Listen to Decoder, a show hosted by The Verge’s Nilay Patel about big ideas — and other problems. Subscribe here!

I asked Justin what it’s like to be the married CEO of a dating app company who doesn’t use his own product anymore, especially as his own personal romantic journey is very intertwined with Hinge. The entire idea of the company and how it has evolved over the years connects to Justin’s own life and his decision to reconnect with his college girlfriend, just a month before she was supposed to marry someone else. The story is so unbelievable that it was turned into an episode of Netflix’s Modern Love. 

You’ll hear Justin explain how that experience connects to the company’s values, culture, and his vision of what Hinge is really for  — and how all of that is geared toward helping people find lasting connections. Hinge bills itself as the app that’s “designed to be deleted,” and that, of course, is in deep tension with how mobile apps and services grow users and revenue.

Then there is the AI of it all. Hinge, as part of Match Group, is using AI both internally and within its product, just as Tinder and other competitors are. There’s AI coaching features to help you improve your profile, pick better photos, and even catch an inappropriate message before it gets sent. 

But pull the string on all these ideas, and you get to a place where people might be talking to AI all the time, even falling in love with it, or having AI agents dating each other before meeting in person. Justin had some pretty strong feelings about the importance of centering real human connection and encouraging people to put their phones down and go out on dates in the real world. Justin also called the idea of AI companionship “playing with fire” and compares those relationships to junk food. 

There’s a lot more in this conversation. We got on the topic of the Trump administration and how seriously Hinge takes the privacy of its users’ data during an unprecedented crackdown on LGBTQ+ rights. We talked briefly about Apple and its App Store restrictions, now that companies like Epic Games and Match Group are free to send people to the web to process in-app purchases. Hinge has some plans that you’ll hear Justin get into near the end. There’s a lot going on in this one; you might even fall in love. 

Okay: Hinge CEO Justin McLeod. Here we go.

This interview has been lightly edited for length and clarity. 

Justin McLeod, you’re the founder and CEO of Hinge. Welcome to Decoder.

Thanks for having me.

I’m excited to talk to you. I’ve got to tell you, this is one where I feel like Jane Goodall or a sociologist of some kind. I’m old. I’m married to a divorce lawyer. I can’t even download this app. It’s too risky. I’m watching through the looking glass here. I asked my younger staff for their Hinge feature requests. Don’t worry, I’ve got a million of those.

Great. Excited to hear those.

When TaskRabbit comes on Decoder, I’m like, “I booked a TaskRabbit.” This is very different. When was the last time you actually used Hinge as a user?

Over a decade ago.

Wow.

Yeah.

What’s that like? What’s it like trying to run this team? Is it all just data driven for you, because there’s a real element of dogfooding here.

Yes, definitely. We have a lot of single people on our team at Hinge, so there’s a lot of internal dogfooding for sure, and a lot of opinions. I think that the relationship is different. So, I started the company in 2011, and I was single at the time, and I was single for the first four years of Hinge, and then, long story: I got back together with my college girlfriend, and we’ve been together for the last 10 years, married with kids and all.

Did you get back together on Hinge?

We were together. I tried to get her back. She said no. I started Hinge in response to that. And then someone whom I met on Hinge inspired me to go back. She was about to get married to someone else. She was living in Switzerland. I flew over a month before the wedding. She called off her wedding and moved back to New York, which led to the whole reboot of Hinge. The whole story is very interconnected. 

I feel like I should throw out my questions. We should just do an episode of Call Her Daddy or something like that. That sounds very complicated.

Yeah, it’s been a ride. An incredible ride, and very intertwined with Hinge. But back to your question, I think that we can overweight our own personal experience a bit, especially as the CEO of the company. What I found over time is that people have a wide array of very diverse experiences, and to some extent, I think it actually helps that I’m not in there overweighting my own niche feature requests that would matter to me but not to the whole population. So the app has evolved. It’s more about helping others than it is about helping myself, which was probably the original idea of Hinge.

How do you think about the connection between what the data is telling you, the data about what Gen Z daters are doing versus millennial daters, which is the cohort you started with, versus the very emotional experiences people have on this platform, which are out of your control? Eventually, you’ve got to take the meat sack to the bar and look at the other person and not fuck it up, right? Hinge can’t solve that problem, but that’s the heart of the whole enterprise. How do you connect those two in your brain?

This is a very complex, nuanced industry. I think sometimes people look at their Hinge feed and they’re like, “Why doesn’t this understand my taste as well as my TikTok feed does?” People don’t quite understand that people aren’t products; they’re not infinite copies of everyone. They don’t always behave the same. Your videos on TikTok don’t have to like you back. There’s just a lot of nuance to getting this right. 

And you’re right. A fair amount of this comes down to the people on the platform. So what we’re trying to do is to [not only] build a great product but also an environment and a community where people are encouraged to be intentional and authentic, and attract users who are looking to find their person. So that’s definitely the art and the nuance of trying to build a dating app like ours.

One of my big criticisms of social media apps right now in 2025 is they’ve all become marketing platforms in some way. At the end of the rainbow, Mr. Beast is trying to sell you an energy bar. That’s what they’re for. And smaller creators are trying to get their first-brand deals or whatever. But there’s a real organization around just marketing. And the platforms try to encourage people to create content for a whole number of reasons, but their reason for being is advertising spend, and then a lot of the content creation on the platform happens for marketing purposes. You can just see how it goes. 

Hinge and other dating apps are different. You’re trying to incentivize content creation. You’re trying to get people to talk about themselves, to talk to each other. The goal is to market yourself. How do you divorce that from the actual thing you’re trying to do, which is to have people fall in love and get into stable relationships?

Well, it’s very much about what you’re optimizing for. And you’re right; social media is ultimately optimizing for engagement, retention, and time in app. That is the lifeblood of any of these companies. How long can they keep you sucked in? That is their objective, and so everything is built around that. And we’ve seen what the consequences of that are. They’re pretty dire. 

I think Hinge is almost the polar opposite of that. We’re trying to get you to spend less time on your phone and more time out in real life on dates. It’s interesting. When I started Hinge back in 2011, as venture capitalists looked at our business they asked those questions around engagement and retention. They were looking at social media, and they’re like, “What’s your daily over monthly? How much time are people spending in the app? How many sessions per day?” We were optimizing for those things, because that’s what VCs were asking about. That’s how we were raising money.

Then Hinge did a pretty big pivot in 2015, when I let go of half the company and we rebooted from scratch, because we felt as if we’d really lost our way. We’d become more of a piece of entertainment that was just about getting people more matches and more activity, and getting them back every day. We’d lost sight of what we were trying to do, which was to have people come to us to find a relationship. We weren’t really optimized around that anymore. 

When we did that pivot in 2015, the biggest change we made was to stop focusing on the competition. We started focusing on the customer, and we made our North Star metric actual great dates. We introduced the “We Met” survey, where we asked people we suspected had gone on a date if they did in fact go on that date and whether it was good. Everything became oriented toward optimizing for that. That ended up creating a very, very different experience.

That actually became the primary differentiator of Hinge. A lot of the other apps in the industry were based on engagement and retention and just getting people back; they were more like entertainment platforms. Hinge became a utility. We started growing through word of mouth, and today we’re the fastest-growing, and in fact the only growing, major dating app. We grew 40 percent last year, while other dating apps are shrinking, because we built a very sustainable business model that delivers on value. The lifeblood of our company is getting more users out on dates, so they tell their friends and then their friends come and join Hinge.

The interesting thing about that business model is it’s in the tagline of the company. I always laugh when you all put out a press release, because it says, “Hinge, the app designed to be deleted,” and then a little trademark logo follows every time it’s mentioned, which is just very funny. I appreciate that you have to do it, but it just makes me laugh every time. That means you’re trying to graduate users. You’re a utility, you pay until you’re done, and then you’re out.

Yeah, precisely.

It means you constantly have to find new users. You basically have a different churn problem. How do you think about that life cycle?

We think about it in terms of good churn. We want people turning off the app for the right reason. We don’t want people turning off the app because they gave up too early or because they don’t like Hinge. We want people turning off the app because they found someone, ideally on Hinge.

What does it mean to find somebody on Hinge? Like you’re married? You’ve gone on three dates?

It’s different for different people. When we did the reboot, our core market was definitely 25- to 35-year-olds, and very much people who were, I would say, looking to find their person and get off the app. Now our fastest-growing segment has been 18- to 25-year-olds, and they’re at a different phase in their lives. It was pretty interesting. When we saw that segment starting to grow, it came as almost a surprise to us. I think what attracted these younger daters wasn’t so much a focus on finding a long-term relationship, or a marriage partner today; it was very much about the authenticity and vulnerability and intimacy they found on Hinge, and a moving away from platforms that felt very gamified and flat to something that felt very human and intentional and authentic. 

So we think about our daters as having a journey mindset. They’re headed in a direction, they’re on a journey of self-exploration. They don’t want to waste their time on bad dates, but they aren’t necessarily looking for their marriage partner today, and that’s totally fine. We’re just looking to help people get off the app and out on great dates, and form intimate connections in real life.

But there’s a difference between getting off the app and going on great dates, and then deleting the entire thing, right?

Forever, yes.

There’s one exit ramp that is very different from another exit ramp. Not to keep comparing it to social media, but again, I feel as if I’m just viewing this from the outside, so it’s all metaphors for me. Mark Zuckerberg is terrified that young audiences will just abandon his core app, or whatever the core social media dynamic is at the time. This is why he bought Instagram. You can read his emails over the course of these trials. He’s like, “There’s another mechanic. I need to buy it before they overtake us.” 

Zuckerberg keeps going down the line, whether that’s Stories or Reels or whatever the next thing is. You have the same problem, only you don’t get to keep the old users on the old mechanic. You don’t get to run Facebook and buy Instagram. How do you think about reinventing the app for that new, younger cohort that has different dynamics on the internet?

We always stay in tune with where the culture’s going. I think it’s just imperative, because, you’re right, we can’t rely on only a legacy user base. So we have to stay on top of culture and where it’s going, and then continually evolve the app accordingly. Right now, a big focus is on AI, and how we can  increase the effectiveness of the app in a couple of different dimensions. 

We’re actually finding, for example, the extent to which coaching has become really, really important right now. Especially during the pandemic, we saw social skills atrophy. People felt less comfortable meeting up with others in real life and interacting. So we’re helping people create their profiles, write their prompts, things like that. Another big thing that came out during the pandemic was more of a focus on voice, and adding voice prompts, which I think is, again, an example of our moving where the culture goes. So we’re always making these kinds of tweaks to continually keep the app fresh.

Do you feel the same existential pressure? There’s this idea that some cohort of people will delete the app — the old millennials will be married or tired or whatever it is they’re going to do, and you’ve got to go get a bunch of new Gen Z users or Gen Alpha users, which is frankly terrifying. How do you think about, “Okay, we’ve got to break the old model, because it’s existential for us if we don’t capture the younger user,” or is it more of a gradation?

If you look at the relatively brief history of this industry starting in the ‘90s, there’s only been one major disruption moment, which was around 2012. So you had the birth of the industry in the late ‘90s, where you had Match and eHarmony come on the scene, and then they dominated from 1996 to about 2014. It was actually a much smaller niche industry at the time. The users were older, people who felt as if they’d really struggled to find someone in real life. 

Then you had the mobile dating apps come on because of a few different technologies that started to come online all together — one was mobile, one was the cultural change of everyone having a social media account. Another was data-processing power and moving away from the world of searching for people to a world of a feed of relevant people, one after another. That created a pretty big paradigm shift, where suddenly technology enabled an entirely new type of experience that it was hard for the old incumbents to mirror. They tried to pivot to mobile, but they couldn’t unseat themselves from their way of thinking about the world. It resembles a very classic disruption problem.

I think the next opportunity for that kind of disruption is going to be a big technology shift. We haven’t seen that up until very recently. Like with VR, AR, and other technologies like that, I just don’t see those working until they’re deeply adopted by 70 percent to 80 percent of the population, and that’s when I think it will really become something that people start using for dating. AI I think is a very different story, and it’s unclear at this point whether it becomes a disruptive force for the current players or whether it becomes more of an evolution. Obviously, Hinge has a tremendous amount of data we can use to train AI models. We’re seeing huge gains in our ability to match people up more thoughtfully given the tools, and at the same time we could introduce very new paradigms for dating.

I want to talk about AI with you, but you mentioned Match, so I think this is a good time to get to the Decoder questions. You’re part of Match Group. You sold to Match Group, and now Match Group owns all of the dating apps minus one, which is a little contentious. It doesn’t own Bumble. There’s a lawsuit. We can set that aside. What’s it like being part of Match Group? When you sold your company, what was that decision like for you?

Honestly, at the time we were in a tough position as a company. I’d done the reboot, and we were about a year into that reboot experience, and we had not really cracked the code yet. There were green shoots there that made me believe and made, I would say, the trained eye believe that there was really something there. But VCs just saw that we were popular, and then we tore down our business, and we restarted, and we started to rebuild again. There wasn’t a lot of juice there.

So we went with a strategy of recognizing the value of what we were seeing, including massive increases in effectiveness, women coming to the platform in a much higher proportion than on other dating apps. So that was very interesting to Match. And so we received a strategic investment from the company in 2017, and that gave it a path to buy the rest of the company, which it did at the end of 2018.

What’s that structure like inside of Match Group now?

It’s evolving. There’s a brand-new CEO, Spencer Rascoff, who just started, and I think he’s taking a fresh look at some of that. But up until recently, and still today, the company operates pretty independently. We’re in New York. We pretty much have our own space. We have our own product teams, our own engineering teams, our own marketing teams that operate very independently. We share learnings across the platform. We use shared services like accounting and legal and things like that. But for the most part, the company has its own independent culture, its own independent mission, product road maps, marketing strategies, all of that.

You said you shared some central services, like accounting and finance. Is there any product or data that you’re sharing?

We certainly share learnings. Especially on things that we don’t really want to compete on, such as safety or monetization or things like that. So there’s certainly that, and there’s sharing for safety purposes. Those are the main ways we share.

So if you’re a young and carefree single on Tinder, and you graduate to Hinge, you don’t get to just bring your data along for the ride?

[Laughs] No.

Again, I’m just looking from the outside. Tinder is interesting. The CEO of Tinder just stepped down. Your new CEO at Match, Spencer, stepped in to run Tinder for a minute. In any normal circumstance, you would be on the attack. If Tinder wasn’t part of the same company as you, this would be a moment to say, “Okay, there’s some strategic weakness over there. We’re going to go get them. We’re going to put the screws on.” Are you allowed to do that inside Match Group?

So first of all, I’ll just say that we don’t really think too much about Tinder as Hinge’s competition. We think about Tinder in a very different psychographic mindset. You come to Hinge because you want to really take your time, be intentional, be thoughtful, find your person. Tinder has a much more casual, younger, “anything can happen” mentality. And so that was a very intentional portfolio strategy decision that Match made back when it acquired us. So no, we don’t think about it like that.

That’s why I asked about the data and the lifecycle question. There’s a time in your life where you might use Tinder, there’s a time in your life where you might use Hinge. It seems from the overall umbrella company perspective, you want to move that user around your family of apps, but it doesn’t seem as if that’s actually happening at the top level.

Yes. From the outside that would make sense. It’s a bit nuanced, because there are very different brand reputations. We like to think of Hinge pretty independently, and I think so do our users.

So there’s no pop-up on Tinder that’s like, “Maybe, it’s time to cool it and download Hinge”? 

There’s not.

[Laughs] Okay, feature request for you. What’s your org chart like? How is Hinge structured?

That’s also been evolving over time, and we’re still a relatively small company. We have about 350 employees. If I think about the evolution of Hinge growing from one person to the first 100 to 150 people, originally, it was very centrally run. There was tight coordination. A lot of direction came directly from me and my executive team. Then as we started to grow beyond 100 people, I would say a lot of the technology was relatively stable. Like with social, mobile, big data, the question became, “How do we keep optimizing and iterating around this?” 

We became a pretty decentralized organization, where we had principles around pushing decision-making down to the lowest levels possible, keeping it really on the front lines. We had pretty independent cross-functional product teams that would work on their individual little missions or surfaces. We oscillated back and forth between that.

People felt they had a lot of autonomy. That was the main ethos of the company. And then I think with AI over the last couple of years, we felt like, “Whoa, we really need to make a pretty big shift.” Like I said, the risk of disruption is high, with very big opportunities to shift the product experience in a new direction. It now requires pulling decision-making back in toward the center a bit, and giving a much clearer strategic direction to the team, so that we’re all working in concert toward one thing. Because the whole app really has to move together. Different parts of the app have to talk to each other in ways that when we weren’t going through much change, wasn’t as essential. That said, we still have very highly cross-functional product teams where product managers sit with a dedicated designer, researcher, data scientist, and tech lead to attack very mission-oriented problems.

You mentioned “surfaces” and “missions.” Are those expressed as just the tabs at the bottom of the app? Is that how they’re broken down, or are they actual user journey missions?

That’s what I mean — surfaces versus missions. I think we’ve gone in different directions. There’s never really a clear line of one versus the other. Do you own the Discover tab, where users just discover new people, or is your job to help people find the right person? In that case, you have to think more cohesively about operating across different surfaces or parts of the app. Now we think about our teams operating less as individual surface units and more as part of a cohesive dating-outcomes team, where people feel a bit more flexible moving around to different surfaces.

How do you think about assigning product managers to those teams? Because PMs, at least in my experience, are like, “I own this square, and I will mess with this square to make this number go up as much as I can.” But “I can mess with all the squares” is really hard, right?

Yes, that’s why we have strong directors at the VP level who oversee an overall mission the way that a head of dating outcomes or a head of growth, who’s coordinating a set of product managers, would. And again, we ask our PMs. Their primary identity is as a dating outcomes PM, not as a discover PM, or a profile PM, or something like that. And while day to day most of their work may focus on the profile and identity work, they see themselves as very much operating as part of this team.

That feels like something you evolved to. You’re a relatively young founder. I think you founded the company right out of Harvard Business School. How has your decision-making framework evolved? How do you make decisions?

That’s also hugely evolved. Everything I’ve learned, I’ve learned through doing it all the wrong ways first and then eventually getting to the right way. When you’re a founder and you have a small team of 10, 20, or 30 people, you’re just making decisions by the seat of your pants. What feels good? What feels right? You’re just using your own gut. 

As we started to get toward 100 people or so, what I noticed was I would be making different decisions on different days that weren’t always consistent. They were based on my mood that day or whatever data was in front of me or what I had last read or whatever. I was just finding I was getting pretty inconsistent. So what I started trying to do was to write down my whole management algorithm. I started putting it in a Google Doc, like “Here’s how I make decisions, here’s what I believe is true.” I started publishing that to the whole company, so everyone could just read it. We would be just very transparent about how we made decisions.

It was around the time that I think I read Ray Dalio’s book Principles, and got super dialed in on how we make decisions. What are our principles, and what do we believe is true? Then I opened it up so everyone could comment on it. We would have long debates in the comment margins of a Google Doc to consider everything from our product-strategy principles to whether Hinge should have a dress code. Literally anything. It was all just there so that everyone could debate it.

We had hundreds of principles, and then as the company got even bigger and we got to 300 or 400 people, it was very hard. One, you just can’t have these endless debates in Google Docs anymore. Also, the principles started to stabilize. There wasn’t as much debate and churn anymore, and then it actually became an exercise in distilling down the most essential things to communicate about our culture. 

I worked a couple of years ago to write an internal book called How We Do Things, which distilled it all down to four or five principles. For example, what are the most fundamental things to understand about how we make decisions here? And then individual teams and individual projects would then write their own principles that were more specific to what they were doing at any given time. 

One of our meta principles now is “decide with principles,” meaning that we don’t want decisions getting made based on some random person’s opinion that if tomorrow this person leaves the company and we hire someone else, they’re going to come in with a completely different set of ideas about how to do something. We really try to define our principles first, agree on those principles, and then see how our work maps to them. I’m happy to talk about what the other three principles are if you want, but that’s the framework we use to make decisions now.

Yeah, talk about them a little bit. There’s a beautiful website, we’ll link to it. It has storytelling, it’s well done. But tell people what the other three principles are.

So the next one is “love the problem.” What I would notice is we would get an inclination around a user problem, which maybe was not even validated 100 percent. Then we’d start getting feature ideas, and we’d get very attached to a feature, and sometimes the feature would drift and not even be solving the original problem. What I found was, if you want to build breakthrough innovative product features and products, you have to spend extra time with the problem to really understand the why behind the why behind the why of of it. You need to ask, “What’s really going on here? Can we really get deep into our users, into the data, into our users’ experiences?” You have to go to that level to get insight that just isn’t available on the surface, and then stay really committed to that problem. And that’s what, again, allows for innovation. 

I think for a lot of Silicon Valley, the strategy is just to throw feature ideas against a wall and see what sticks: “Let’s see if this works. Oh, it doesn’t work, throw that out, let’s try something else.” When you have a lot of deep conviction around a user problem, and you really know you want to solve it, then you have the resilience to try and try again to solve that problem, even if your first or second iteration doesn’t make it. So one of the most foundational of our principles is, “love the problem.” Fall in love with the problem, don’t fall in love with the solution, as you must be willing to give up the solution at any given time if it’s not solving the core problem that you’re trying to solve. So that is “love the problem.”

Next is “keep it simple,” meaning that I think the best solutions are always the most elegant solutions. Overall, we want to keep the product very simplified and minimal. Our colors are black and white. If you look at the Hinge product today, it’s very clean, it’s very simple. We’re always stripping away features that don’t make sense and just recognizing that there’s complexity. 

There’s a cost to complexity every time you add a feature. So even if you add a feature, if it’s only marginally beneficial, the cost of the complexity and maintaining that feature versus the marginal benefit it adds will end up gunking up the app over time and slowing you down over time. That’s a hard conversation to have with product managers, because they’ll work for months on a feature and they’ll ship it and say, “Yeah, it didn’t harm the user base, we like it, and it even moved this metric over here by 2 percent.” And you’re like, “Well, the cost of complexity is high, and so we need to focus on things that are actually going to have a major impact.”

Are you all the way two features out for every feature in? Do you think about it that way? I know some founders do.

I haven’t heard that before. I don’t necessarily think that way. But I do believe in constantly reevaluating what’s in the app, asking what needs to stay, and having a high bar for building a new feature. So does it actually accomplish what we need it to accomplish, and is the complexity worth the cost? So that’s the third one now. 

The fourth, the last one, is “tend to trust.” I just find that trust is the lifeblood of an organization. You have to do a lot of work to proactively cultivate and tend to trust by creating strong interpersonal relationships, by creating lots of opportunities for transparency at the organization. We have always been very, very transparent about where the organization is headed. So much so that we had to make all Hinge employees Match Group insiders so they couldn’t trade Match Group stock except during trading windows, because we would be so transparent about where we were, what our financial position was. 

Everyone should know that all the way down to any position at the company. I think the trust  that you create both interpersonally and from the leadership on down to the rest of the organization is absolutely essential. It just  saves you a lot of headaches when it comes to internal politics and all those types of things.

Let’s put this into practice. You obviously made a big decision to refocus on AI. How did that come about? Did you wake up one day and say, “Oh boy, it’s happening”? Was it that Match Group put out a press release with OpenAI saying, “We’re going to work together”? Did you read that and say, “I got to figure this out”? How did this come about?

Certainly the release of whatever version of ChatGPT that sent shockwaves through the world was a pretty big wake-up call. Obviously, we’d already been using machine learning and things like that in the interest of safety, and in our algorithms, our recommendation algorithms. But I think the shot across the bow that came from the release of ChatGPT [with GPT-3.5] was what really woke us up to the potential capabilities here and to realizing that this could be a major disruptive force in a way that we hadn’t really seen since we started Hinge. 

It took a bit for us to get our strategy clear about what our thesis was on how this was going to affect matching and dating in the future. It wasn’t immediately apparent, but I think we have a pretty clear thesis now, and we’ve started to organize the company around that thesis.

What’s the thesis?

That there’s two main vectors that AI is going to impact: dating and matchmaking. I think the big story is AI is going to move Hinge much closer to the experience of working with a personalized matchmaking service, and away from the experience of feeling that you are joining a social platform on your own as you try to find your person. 

So what does that mean? Two big pieces. One is personalized matching, and the other is effective coaching. On the personalized matching front, we should be able to move much further beyond the world we are in today, which is our users speaking to us in essentially Morse code as they try to communicate to us what they like and what they don’t like. 

The idea is that they would be able to speak much more directly to us with “here’s what I’m looking for, here are my values, here’s my personality, here are my interests.” It means Hinge being able to listen to them and hear their preferences, and even integrate things like relationship science into the app to better understand what types of people are compatible and what types of people are not long-term compatible, and introduce them to a much more curated, higher-quality, less-quantity list of people, where they have much more trust that if you’re introducing them to this person, this is probably someone they want to go out with.

We’ve already seen big gains, by the way, just by using the power of LLMs to drive more of our recommendation systems using the data we already have. But we released a new algorithm a couple of months ago that increased matches and dates by like 15 percent, and that’s just using the same data. But now we can start to use much more of that unstructured, nuanced data, with people talking to us in their own voice about who they are and what they want, which we can use very effectively. 

So that’s the whole personalized matching front. Then there’s the effective coaching front. A lot of our users struggle to get out on that first date, and they often don’t know why. I have friends who are incredible people, and they’ll ask me to take a look at their Hinge profile. I’m flabbergasted that this is their attempt at putting themselves out there. 

So we’re starting with pretty basic things. Hinge has these prompts, which are short questions designed to get you into a conversation, and you put them on your profile. A lot of people write great responses to prompts, but a lot of people write not-so-great responses, often just one-word answers that just don’t work. We found it’s just incredibly effective to have trained an AI model on good-prompt responses and give people feedback. And it’s mostly like, “Can you say more about that?”

[Laughs] Don’t just put “no.”

Yeah, and to be a little bit more specific and tell a little bit of the story. Good answers invite another question back, or get a conversation going. So we can give people those nudges so they write good prompts, so that they choose good photos. We have a team called Hinge Labs, which is always looking at why some people succeed, and why some people don’t on the app. 

Some of it is, again, simply building product features that help solve those problems, but another part of it is just giving guidance and notes about how they can be using the product better. We have traditionally published those in date reports, and we publish them in the press and we place them in the help center. But for the most part people just don’t read them. But the idea that we can take this body of knowledge we have about how to succeed on Hinge, and then look at how our users are using Hinge, and then deliver the right piece of advice at the right time to the right user, I think is going to be pretty transformative for a lot of people.

There’s a pretty fine line between that and what I see lots of people already doing all day long, which is just talking to ChatGPT, just hanging out. We had Eugenia Kuyda, the CEO of Replika, on the show, and she said, essentially, “My plan is people are going to date AI bots that will coach them up into being fully formed people, then we’ll release them into the dating pool, and they will have confidence and self-assuredness.”

Again, there’s a fine line between prompting someone and coaching them inside Hinge, and we’re coaching them in a different way within a more self-contained ecosystem. How do you think about that? Would you launch a full-on virtual girlfriend inside Hinge?

Certainly not. I have lots of thoughts about this. I think there’s actually quite a clear line between providing a tool that helps people do something or get better at something, and the line where it becomes this thing that is trying to become your friend, trying to mimic emotions, and trying to create an emotional connection with you. That I think is really playing with fire. 

I think we are already in a crisis of loneliness, and a loneliness epidemic. It’s a complex issue, and it’s baked into our culture, and it goes back to before the internet. But just since 2000, over the past 20 years, the amount of time that people spend together in real life with their friends has dropped by 70 percent for young people. And it’s been almost completely displaced by the time spent staring at screens. As a result, we’ve seen massive increases in mental health issues, and people’s loneliness, anxiety, and depression. 

I think Mark Zuckerberg was just quoted about this, that most people don’t have enough friends. But he said we’re going to give them AI chatbots. That he believes that AI chatbots can become your friends. I think that’s honestly an extraordinarily reductive view of what a friendship is, that it’s someone there to say all the right things to you at the right moment

The most rewarding parts of being in a friendship are being able to be there for someone else, to risk and be vulnerable, to share experiences with other conscious entities. So I think that while it will feel good in the moment, like junk food basically, to have an experience with someone who says all the right things and is available at the right time, it will ultimately, just like junk food, make people feel less healthy and mo re drained over time. It will displace the human relationships that people should be cultivating out in the real world.

How do you compete with that? That is the other thing that is happening. It is happening. Whether it’s good or bad. Hinge is offering a harder path. So you say, “We’ve got to get people out on dates.” I honestly wonder about that, based on the younger folks I know who sometimes say, “I just don’t want to leave the house. I would rather just talk to this computer. I have too much social pressure just leaving the house in this way.” That’s what Hinge is promising to do. How do you compete with that? Do you take it head on? Are you marketing that directly?

I’m starting to think very much about taking it head on. We want to continue at Hinge to champion human relationships, real human-to-human-in-real-life relationships, because I think they are an essential part of the human experience, and they’re essential to our mental health. It’s not just because I run a dating app and, obviously, it’s important that people continue to meet. It really is a deep, personal mission of mine, and I think it’s absolutely critical that someone is out there championing this. Because it’s always easier to race to the bottom of the brain stem and offer people junk products that maybe sell in the moment but leave them worse off. That’s the entire model that we’ve seen from what happened with social media. I think AI chatbots could frankly be much more dangerous in that respect.

So what we can do is to become more and more effective and support people more and more, and make it as easy as possible to do the harder and riskier thing, which is to go out and form real relationships with real people. They can let you down and might not always be there for you, but it is ultimately a much more nourishing and enriching experience for people. We can also champion and raise awareness as much as we can. That’s another reason why I’m here today talking with you, because I think it’s important to put out the counter perspective, that we don’t just reflexively believe that AI chatbots can be your friend, without thinking too deeply about what that really implies and what that really means.

We keep going back to junk food, but people had to start waking up to the fact that this was harmful. We had to do a lot of campaigns to educate people that drinking Coca-Cola and eating fast food was detrimental to their health over the long term. And then as people became more aware of that, a whole personal wellness industry started to grow, and now that’s a huge industry, and people spend a lot of time focusing on their diet and nutrition and mental health, and all these other things. I think similarly, social wellness needs to become a category like that. It’s thinking about not just how do I get this junk social experience of social media where I get fed outraged news and celebrity gossip and all that stuff, but how do I start building a sense of social wellness, where I can create an enriching, intimate connection with important people in my life.

The connection between the wellness industry and the rise of social media is a whole other podcast, and maybe a PhD thesis, too. There’s a whole lot there to unpack. I take your point though, that maybe using our phones in healthier ways is the future. It will make us better, and that will be a reaction to the negativity we see from phones today.

Literally as we speak, I’m sure Elon Musk and Donald Trump are continuing to tweet at each other in an unhealthy way for maybe the future of the entire planet. But you’ve got to use AI today. You have prompt feedback running in the app today. You’re helping people pick better photos. The flip side of that is that they might just use AI to generate the content. Can you detect it if your prompt feedback says, “Hey, that’s not a good answer,” and someone runs away to Gemini or ChatGPT and comes up with a better answer that doesn’t actually reflect them?

I think about this like the extreme photo filters, which used to be popular on Instagram back in the day. Ultimately, you are going to have to go meet up with this person on a real date, and so you want  to come across as best as you can, because, obviously, you’re not going to bring ChatGPT on your date with you.

I’m worried about this. I want to say that I’m worried about this.

So it’s not a winning strategy. That said, do people ask for advice and little tweaks? They already do it today. They ask their friends, “How should I respond to this text message?” So in some sense, I don’t see it that differently, because you will have to meet up with this person eventually and show up as the real you.

Would you add that feedback inside Hinge? Hinge obviously has messaging features. Are you going to add a little coach into the messaging feature to say, “Hey, don’t be a dick”?  

That already exists. It’s called “Are You Sure?” That’s AI-driven to make sure people don’t send inappropriate messages. But yeah, again, the right nudge at the right time, because I think if we build the right tools within Hinge that are appropriate for dating, people will then use it and be less likely to run out to ChatGPT and use [the feedback] in ways that are probably less appropriate. 

Nudging people to say, “Hey, you guys have been chatting for a bit. Did you know that most people, after they exchange this many messages, usually just go on and move to a date?” Or, “Hey, it seems like the conversation has died. Here’s something interesting that you may not have noticed on their profile that you can ask about.” Little things like that, certainly.

One of the interesting dynamics here is you’ll add more and more AI to the digital experience people have with each other to make them perform better or act better or be more interesting, whatever it is. And then they’ll go on a date, and then they might leave your platform. 

They might switch to iMessage or call each other on the phone. I don’t think Gen Z is calling each other. They’ll do something else. They’ll go on Discord. How do you bring that experience along for the ride to say, “We’re going to continue to stay here and help mediate and coach you through this relationship”?

We’re not there yet. We still have a lot of work to do just to get people out on the first date. And at the same time, I do think there’s actually a lot of opportunity to help coach people through that experience. How to show up on a first date. What to talk about on a first date. How to build intimacy over time, how to ask about the right things to determine compatibility. So I think there are definitely opportunities for that. It’s not on the 2025 road map, but it’s certainly something I’m thinking about.

Do you worry that people are going to just upload full AI avatars on Hinge and catfish each other to death?

We have a very robust trust and safety team that is thinking two to three steps ahead about how to mitigate things like that.

I have spent too much time talking about watermarks in AI and SynthID, and there’s lots of episodes of the show that are deep in the AI watermarks game, and it has effectively come to nothing so far. There’s just a lot of problems there. Are you able to say, “Okay, we can detect a full AI photo here”?

There’s so many signals when it comes to creating a dating profile from the phone number you use and the email you use and your IP address, all those things like that, that we have a very multifaceted way of determining the authenticity of profiles. I’ll say that.

Running these models is costly. There’s lots and lots of different kinds of models you can run at different costs. Are you using lots of models? Are you sending everything to GPT-4? How does this work for you?

We use different models for different things. Sometimes we build them completely internally. As you said, it’s public that we have a relationship with OpenAI. So we use different things and are always balancing cost and performance against our ability to build in-house versus not.

Do you see that trend shifting over time? I’m very curious about what the frontier models can do versus what the cheaper, more efficient models can do. Have you seen that shift over time as you’ve started to deploy these tools?

For one, we’ve seen the cost of the frontier models just decline precipitously, which is pretty interesting to watch. But I’ll say that there are models, even the prompt feedback model, that are very, very specific and discrete, and that we can mostly build internally to understand.

Do you run that in your cloud and your data center? Or are you running that on people’s phones?

I don’t actually know. I think that’s in the cloud. I’m almost positive that one is in the cloud. 

The reason I’m asking is that to do any of this well, you need more and more data from people, and you’re asking them to generate more and more data. For instance, “That’s not a good answer; tell me more about yourself,” is more data and it’s data that you’re now storing. In particular, it’s data about gender, sexuality, and dating preferences — that’s stuff the government suddenly has a very unusual and somewhat threatening interest in. 

Are you worried about that? That the Trump administration or some future administration would show up and say, “Tell me all of the transgender people on your platform”?

Obviously, we have very, very sensitive data that we have very, very clear protections around. And we haven’t seen anything like that.

So you haven’t had any of those incoming requests yet?

No.

The Trump administration has also said it’s going to start scanning social media profiles for references to Palestine, and for comments about Trump himself. When you talk about matching people and values, those things come up. Has there been any request for Hinge profiles from the Department of Homeland Security or ICE or any of these other parts of the Trump administration that are doing this social media scanning?

No.

The reason I’m asking is the amount of data you might collect is very, very personal. It seems like a rich target. Have you thought about the planning for how big of a target this might become as you prompt people to input more and more data with AI?

Certainly. I think we’ll have to handle those things as they come. We’re obviously in a very uncertain time right now, but I will say that we are primarily a platform about creating intimate one-to-one connections where people should be able to express themselves in the way they see fit, and describe themselves and their own sexuality and their own gender in the way they need to do. That will inevitably touch on people’s very private lives. 

I view that as absolutely sacred and fundamental to our mission, and people feeling safe to express themselves is absolutely critical. So those would be our very highest priorities, and I imagine not top priority for social media, where people are blasting posts to thousands, or millions, of people. Our platform is not about one-to-many posting and conversation. It’s about intimate one-to-one connection and one-to-one conversations.

I think I would warn you that having a data pool of that kind might make you a target. I’m curious how that plays out over time, particularly in this administration. There’s some platform dynamics here as well, like iOS and Android exist. They are platforms. They’re also themselves rich targets for the government. 

Overall, there’s a push for the platforms to do age verification themselves. There’s laws now in certain states, and in other countries, that the Apples and the Googles of the world have pushed back against in various ways. Do you think they need to do it? Do you think that it’s at the iOS and Android level that you need to do the age verification? Because this is a core component of bringing people onto Hinge. It’s not for children.

It’s certainly not. We’re 18-plus and we have our own age verification methods. But yeah, we have been pushing for these platforms to do age verification themselves because they have even more robust ways to do it.

The arguments in response — when you listen to Apple and Google push back against these laws — is that it would be too hard. It would create a censorship regime, that the app vendors need to be liable for this. Have you seen any movement in that dynamic? I think at the highest level, this is one of the big dynamics of how we might regulate platforms in the future.

I am staying much closer to product development and where we’re going with AI right now than I am to that.

Your monetization method is obviously a premium version of Hinge. I think one tier is $55 a month. There’s another tier that’s $45 a month. The big news in the platform world is that Apple is no longer allowed to prevent alternative payment systems. Match Group, in particular, has been leading this fight. It’s in all the press releases. Has that changed the dynamics of Hinge for you?

I don’t know if it changes the dynamics, but it’s certainly going to give us more flexibility in giving users options to be able to pay in different ways. I think that’s good for everybody for sure.

Have you launched an alternative payment service yet?

We have not.

Would you like to?

Yes.

How soon?

Certainly by the end of the year.

Is that going to be a Match Group payment service or a Hinge payment service? How do you think about that?

These are things that we’re figuring out, but most likely Hinge.

That would return somewhere on the order of 15 percent to 30 percent depending on how the billing works for you at your scale and recurring subscriptions and all that. Is that just going to be pure margin? You’re just going to get the money back?

Well, I think it changes the equation on many fronts. It allows us to invest more in the company. It changes how we would price, so no, I think it could result in lower prices. It could result in more investment in the company, or it could result in more margin. It’s probably some combination of all three of those.

Match Group has been doing this fight for a long time, and you’re already describing how you might change pricing or the lifetime value of customers. Fortnite maker Epic Games fought this fight for five years. At the very end, the judge says, “I’m very mad at you, Apple. You can’t do this anymore.” Did you immediately start making plans that day or were you like, “This is going to get appealed, we have to wait”?

There’s been back and forth and appeals and stays and things like that. I think just a couple of days ago, the appeal was denied. So I think that made it pretty real.

Just to put the decision-making into practice, did you say that day we need an alternative payment system?

Certainly the day that the original ruling came out, we started to plan.

What does that planning look like? Is it, “I’m going to call Stripe”? Put us in your shoes. That happens. Someone comes to you and you say, “Okay. We need to start to plan.” Walk us through that moment.

Just like anything else at Hinge, I think that we stay grounded in our principles. We look at the big picture. We look at the teams and the road maps and the things they’re focused on right now, and we think, “Does this new information change anything? And as we look at our growth team, does it make sense to build the next monetization or expansion feature? Does it make sense to pivot resources over to this thing?” And given, as you said, the 15 percent to 30 percent gain that’s on the table, it’s a pretty high priority.

There’s an ecosystem of companies that might be building this stuff more centrally, that might be charging different rates. I’m excited about that. It’s wonky and boring. There’s a reason we’re ending the episode on payment systems. 

A whole new industry I think will emerge. Well maybe not an industry, but certainly a suite of services will emerge around this to allow people to manage subscription payments, cancellations. It’s certainly nuanced.

But at the end of that, what you want is rates to come down. Where do you think the rates should be? I know no one has ever thought they should be at 15 percent or 30 percent. Where do you think they should be with a little more market competition?

When you stack the credit card payment processing fees on top of the fees around customer service and all the nuance of managing those, I do think it comes down to the 5 percent to 10 percent range.

When you think about recovering that up to 20 percent, are you thinking, “Okay, I can use this to lower prices and grow,” or is it that you have to build many, many more AI features to compete against the coming onslaught of AI chatbots?

[Laughs] I think we’re very, very focused on innovating for the future. Like I said, it changes the equation, so it’s on all three fronts. It’s lower prices, it’s higher margin, and it’s more investment in the company. But it certainly gives us major opportunities to invest in the core product experience at a time when there’s massive disruption. So it’s a particularly critical time to be doing that.

There’s a lot of talk about platform shifts. You’ve talked about platform shifts here. People might be using Hinge differently, because they have AI tools or because the AI tools are helping them find one another more efficiently, or better. A lot of the platform shift I hear about is, “Oh, we’re going to have new devices. We’re going to have new form factors. People are just going to talk to ChatGPT in the bar.” 

Maybe we’ll just have agents that represent us, and they’ll go on dates for a while, and come back and say, “You should go on this date with this other person we found on Hinge,” because the agents have fallen in love, and now you just have to not screw it up. That takes the screen away. That takes your surfaces and your missions and puts them in a totally different place. How are you thinking about that level of shift? Is it even on your radar?

Yeah, I’m thinking about it right now. I think we overuse the form factor of our mobile devices right now for all kinds of things that it doesn’t need to be used for. I think a lot of those will be siphoned off into some other form factor. I especially think audio and voice is going to be a very big piece of it. But I don’t think that means that the form factor completely goes away. There are things that you need visual cues and references for where a screen is still going to be the dominant form factor. At least a piece of the dating equation is going to be that, for sure.

Do you think we’ll get to a place where people’s agents are just dating each other and then reporting back?

No, I don’t really think so. I think there are much better–

Isn’t that what’s already happening in the matchmaking algorithm, in a very reductive way? Isn’t that what’s going on?

I think in a very abstractive, reductive way, you could say that. But that’s not really what’s happening. We are not simulating dates. I think it’s a very expensive and inefficient way to do something that is actually much more straightforward.

There’s just a part of me that says you’re going to have some competitor that attempts this, and we will all have to contend with it.

I just think that’s a bit of a red herring for trying to map someone’s psyche and guess how they’re going to act. That adds a lot of complexity when actually you can just talk to people very directly about who they are and what they’re looking for and what matters to them, and compare that against someone else and what they describe, and actually make a lot of good connections and [get a] clear understanding in figuring out who should match with whom.

Justin, this has been great. Tell people what’s next for Hinge. What should they be looking for?

It really is the evolution of the product. I think that the shift to AI is going to be bigger than the shift to mobile for the industry. If you think about the big picture of what mobile did, it just made the process more approachable, faster, more fun, easier. But it was still the same fundamental experience of just cruising for people and trying to find someone based on very limited information, matching with them, trying to figure it out, going on a date, realizing this is not your person, trying to find the next date.

We’re moving much closer to a world of really deep understanding of compatibility. Being able to zero in on the right person very quickly. It’s going to be a very transformative experience that I think is going to very much change people’s understanding and perception of the industry. So I’m really looking forward to the next couple of years, because I think that we will see more change than we’ve ever seen in the industry before.

We’ll have to have you back to check in on how it’s going. Thanks so much for coming on Decoder.

Great. Thank you.

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