What do you get when you combine strong personal values with a unique business idea?
In the case of Whitney Wolfe Herd, you get a publicly-listed company that disrupted the
dating industry and made her into the youngest self-made female billionaire.
Join us to find out how Wolfe Herd went from selling tote bags to support a good cause,
to building Bumble, the biggest women-centric dating app on the market.
Let’s break down this startup story and understand how it became so successful.
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Whitney Wolfe Herd’s unique approach to business that combined an entrepreneurial
spirit with her personal values would make its first appearance while she was attending college
when the devastating BP oil spill in 2010 drove her into action.
She started a business, in partnership with celebrity stylist Patrick Aufdenkamp,
called the Help Us Project, selling bamboo tote bags to benefit areas most affected by the damage.
While the bags gained local success initially, once celebrities like Nicole Richie and Rachel
Zoe were photographed with her bags that they received a great deal of attention and press.
Wolfe Herd’s desire to create a business continued and motivated her to join the startup incubator
Hatch Labs in 2012. Her initial project, created with Sean Rad, was called Cardify,
a platform that aimed to help retailers reward customers with loyalty solutions.
While Cardify didn’t take off, Rad had been working on a prototype of Tinder,
then called MatchBox, and along with Wolfe Herd, who reportedly came up with the app’s final name,
as well as co-founders Justin Mateen and Jonathan Badeen, launched the app in September 2012,
with Wolfe Herd becoming the VP of Marketing. Not bad for a 22-year-old.
Unfortunately, after her relationship with Mateen ended, the environment at Tinder became toxic for
Wolfe Herd, and she left the app in April of 2014 and sued it for sexual harassment.
She eventually settled this case, winning $1Million and stocks as part of the agreement.
As a result of filing the suit, Wolfe Herd was ostracized by the tech community and became
the subject of online hate. It got so bad she deleted her Twitter account. This experience
inspired her next project, a female-only social network, attempting to gain attention from
compliments instead of controversy, called Merci. “I started thinking about this where we’re all
attacking one another online, and I started thinking how could we solve this? I started to
think about women and girls, and the way women and girls are treated and I said, okay, let’s
just make a female-only social network, but they can only speak to each other with compliments,
there will be no free-flowing negative behavior.” While still conceptualizing Merci, Badoo founder
Andrey Andreev contacted Wolf Herd, hoping to bring her on as CMO of his company. While she
didn’t want to take the job, Andreev believed in Wolf Herd’s idea for a woman-centric social brand,
and he convinced her to start in the area both of them knew best:
online dating. This is how Bumble was created. The two formed a partnership where Andreev
would receive 79% ownership in the company following an initial investment of $10 million
along with additional investments and Wolfe Herd would serve as founder,
CEO and 20% owner, with autonomy over the company. “If we were going to build the female internet
and focus on socializing, let’s go in and disrupt dating first. He promised me if we
reached a certain number of users that I could expand into friend-finding and networking.”
Bumble stands out in a sea of dating apps because the central focus is about women initiating the
conversation with prospective partners. No more harassment or never-ending messages
from strangers, but a simple idea that the woman can make a match and reach out when SHE wants.
Who would’ve thought that an app where guys couldn’t easily harass women would prove popular?!
But Wolfe Herd had bigger goals and dreams for Bumble. She saw it not just as a dating app,
but as a "preeminent global women's brand" and a place to meet new people "no matter
who you might be looking for, whichever life stage or relationship you're in."
In 2016 they launched Bumble BFF, which is friendship and community-driven. They also
launched Bumble Bizz in 2017 to help women network for self-employed businesses. As with
the dating app, for both BFF and Bizz, they employed their model of only allowing women
to make the first move, bolstering their mission of empowering women in all types of interactions.
Wolfe Herd’s values shine through in Bumble, which is vocally committed to its core values
of promoting “accountability, equality, and kindness in an effort to end misogyny and
re-write archaic gender roles,” with a focus on empowering women and the LGBTQI+ community.
This is evident by actions such as sharing “An Open Letter To Connor”
which publicly called out a male user who was abusive to a female user, when Wolfe Herd’s
convinced the House Criminal Jurisprudence Committee of Texas to make unsolicited nude
pictures a crime, or Bumble’s vocal support of the Black Lives Matter Movement in 2020.
In 2019, Bumble also showed how it deals with internal issues
when its sister company Badoo made headlines for a “sleazy” office culture and misogyny.
Wolfe Herd stated that while her experience with the company and Andreev had always been positive,
she would follow the investigation and support any person that wants to confide in her.
That November, Bumble’s parent company MagicLab was sold to private equity firm
“The Blackstone Group''. During this buyout, Andreev, gave up his entire stake in both Bumble
and Badoo, leaving Wolfe Herd as CEO of MagicLab and with 19% of the company, valued at $3 billion.
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Focusing on its unique selling proposition and being vocal about its values
has allowed Bumble to grow into the 2nd largest online dating app in just 7 years. Having gained
1 million users in its first year, Bumble’s user base grew to 8 million in 2016 and increased by
another 4 million users the following year. The last 4 years have seen explosive growth,
with Bumble gaining approximately 10 million users per year, reaching 42 million by 2020.
During this same period, Bumble’s share of the dating app market grew by 9%,
according to Sensor Tower. Bumble now sits at 19% market share, coming in second only to Tinder.
Revenue growth has been steady, starting from $10 million in 2016 and increasing to
$100 million by 2017. Since then, Bumble has seen year-on-year revenue growth of almost
$100 million, reaching $337 million in 2020. But just because an app is popular doesn’t
mean it’s necessarily profitable. As of February Bumble is $900 million in debt.
While most online businesses make their money from advertising, it was reported that only 3%
of Bumble’s total revenue in 2019 came from this revenue stream. Instead, the company relies on its
freemium model, which allows users to purchase subscriptions that unlock features such as the
ability to extend time on matches, unlimited swipes, the ability to backtrack, SuperSwipes,
and more. The app currently has 2.8 million paying users worldwide spending an average of $19.99.
The value of sticking to your personal beliefs was shown when Bumble became publicly traded in
February 2021. The dating app opened at $43 per share, with its stock soaring to $76,
causing a valuation of $13 Billion before hitting a high of $84.60 per share,
less than a week after its debut. The move gave 31-year-old Wolf Herd a net worth of $1.3 billion
and made her both the youngest, self-made female billionaire and the youngest woman to take a
company public. Very impressive for a person who started out selling tote bags for charity.
Overseeing such growth at such a young age has led Wolf Herd gain recognition for her efforts,
with Business Insider including her in their list of 30 Most Important Women Under 30
In Tech in 2014. She was also named one of Elle magazine’s women in tech in 2016 and appeared
on Forbes’ “30 Under 30” list in 2017 and 2018. By channeling her experiences, both positive and
negative, from her time at Tinder into Bumble, and identifying the need for women to be empowered,
Wolf Herd has managed to build the dating platform into a dominant player
in the online dating space. By focusing on the needs of women, she has been able to create
a platform where its users can feel safe while engaging with strangers, a rarity on the internet.
As the youngest woman to have taken a company public, and the youngest self-made female
billionaire, Wolf Herd is the perfect example of how a combination of sticking to one’s values
and focusing on an Unique Value Proposition of empowering women
can create a business that disrupts an industry while pushing for social change.
That’s it for our breakdown of Bumble. What do you think of this unique dating app?
Do you think they have what it takes to become a market leader? Let us know in the comments below.
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