When Whitney Wolfe Herd started planning an October launch party for a new product at Bumble, America’s fastest-growing dating-app company, she was deliberate in her choice of venue: the Manhattan space that for 57 years hosted the Four Seasons restaurant, where regulars like Henry Kissinger, Vernon Jordan, Edgar Bronfman and Stephen Schwarzman created the ultimate power lunch.
The space now has a new name, new management and a new menu. And, as Herd insists, a new perspective on business. “The power lunch is no longer just for men,” Herd announces to the mostly young, mostly female crowd, before ceding the stage to the popstar Fergie. “We all deserve a seat at the table.”
That table surely now includes the 28-year-old Herd, who has changed the tenor of dating dynamics. By letting women make the first move, Bumble has amassed over 22 million registered users, to closest competitor Tinder’s 46 million, and at more than 70% year-over-year growth, to Tinder’s roughly 10%, it’s closing the gap quickly.
Bumble began monetizing via in-app purchases only in August 2016 and crossed $100 million in sales in 2017, a figure that – aided by the introduction of tailored, hyperlocal advertising – is projected to double in 2018.
Herd turned down a $450 million buyout offer from the Match Group in early 2017, according to sources with knowledge of the conversations. And these sources maintain that Match approached the company again later in the year to discuss a valuation well over $1 billion. This 30 Under 30 honoree retains 20% of Bumble, a stake that makes her a centimillionaire. (Match declined to comment.)
It’s a stunning comeback. As cofounder and vice president of marketing at Tinder, which has reinvented how people date and mate, she was part of one of the great business success stories of the smartphone age. But then she found herself in one of the era’s great public dramas.
In June 2014, she sued Tinder for sexual harassment, alleging that her ex-boss and ex-boyfriend Justin Mateen called her a “whore” and “gold digger” and bombarded her with threatening and derogatory text messages, which she attached to her complaint. She also alleged that Tinder, owned by IAC and then by its Match Group spinoff, had wrongly stripped her of a cofounder title.
The company denied any wrongdoing, but Mateen was suspended and then resigned. Sean Rad, then the CEO of Tinder, told Forbes in 2014 that Herd bore part of the blame for the bad blood between her and Mateen. The suit was quickly settled for a sum that Forbes previously reported to be approximately $1 million. (The settlement bars the parties from discussing the case.)
There’s no question who the founder of Bumble is. Rather than sulk about Tinder, Herd decided to compete against it. In doing so, she belatedly entered one of the most crowded and established digital fields (over 90% of online dating start-ups fail) and nonetheless quickly carved out a lucrative space by focusing on the needs of one segment: women.
More than 10% of Bumble’s users pay $9.99 for a monthly subscription to access perks like extra time to decide whether a suitor merits a message. At Tinder, just about 5% of users pay for a similar service, according to a report from the investment firm Jefferies. It helps, of course, that her segment also happens to represent a majority of the population.
“I just don’t harbor resentment toward anything or anywhere or anyone – I’m too busy,” Herd says. But if success is the best revenge, then nine digits in three years flat offers the kind of vindication people make movies about.
Herd’s path to Bumble was unintended. In the months between filing suit against Tinder and settling, she experienced the sort of online abuse that’s all too familiar to women who make public sexual harassment allegations. “I was being told the ugliest things by complete strangers, and they were having full debates about me,” Herd says. “I wasn’t running for office. I wasn’t trying to be on a reality show. I was just a girl who left somewhere.”
When that abuse turned into rape and murder threats from strangers, she deleted her Twitter account. Panic attacks and paranoia followed. A Salt Lake City native who attended private school and is a third-generation legacy at Southern Methodist University in Dallas, she retreated to Texas and the family of her then boyfriend Michael Herd, who’s now her husband.
“I was broken,” she says. Trying to give some purpose to this trauma, Herd began sketching out a women-only social network called Merci, which would focus on positivity. “No compliments on physicality,” she says. “Compliments about who they are.”
Then came an unsolicited e-mail from someone with an unfamiliar address and a Russian name, Andrey Andreev. Born in Moscow and based in London, Andreev in 2006 had founded Badoo, an online dating network that is today the world’s largest, with over 360 million registered users in 190 countries.
Herd had met Andreev at a dinner in 2013 while she was at Tinder, and she’d made an impression. “To be honest, I immediately fell in love with Whitney’s passion and energy,” says the thick-accented Andreev, who has acquired a reputation as a recluse because he rarely grants interviews. “I thought she was a very cool lady and that I should be watching her very carefully.”
When she didn’t reply, his team e-mailed Herd’s lawyers, wishing her well with her legal battle and adding that he’d like to work with her. “My original idea was to get her as CMO at Badoo,” says Andreev, who’s 43.
As it turned out, Herd had plans to visit her little sister at cooking school in Paris, and she made a pit stop in London. She didn’t want any part of his job offer. “Dream on – I’m not for hire,” she recalls saying. “I’m starting a company, and I don’t want to be in dating.” She did pitch him on Merci, though.
While Andreev liked the idea of a women-centric social brand, he thought Herd should stick to her forte and his: the dating sector. They spent days walking around London’s streets and parks together, exchanging ideas. Andreev told her he wanted to pair her innate talent for marketing and branding with the infrastructure, capital and resources at his disposal after almost a decade at Badoo.
After she settled the Tinder lawsuit in September 2014 – which, conveniently, did not contain a non-compete clause – she took Andreev up on his offer. He’d make an initial investment of about $10 million for launch marketing and commit additional funds to fuel growth, taking 79% of the company. She’d be the founder, the CEO and a 20% owner, with all the autonomy those titles imply, while tapping into Badoo’s infrastructure and Andreev’s know-how.
Both have come in handy. At Badoo, Andreev has a decade’s worth of A-B tests, data on the effectiveness of various monetization efforts and experience bringing a product to scale that have no parallel in the dating market. When the time came to start charging users for in-app perks, for instance, the team at Bumble was able to develop sophisticated technology to support subscriptions from day one thanks to input from Badoo.
From September to December of that year, Herd flew between Texas and London around 15 times. She and Andreev brought in two of her fellow former Tinder executives, Chris Gulczynski and Sarah Mick, to design the new app’s back-end and user interface. (The two left Bumble in April to launch their own agency but still share the 1% of equity not held by Andreev and Herd.)
One night, over cocktails, Herd stumbled upon Bumble’s special sauce. “I always wanted to have a scenario where the guy didn’t have my number but I had his,” she recalls telling Andreev. “What if women make the first move, send the first message? And if they don’t, the match disappears after 24 hours, like in Cinderella, the pumpkin and the carriage? It’d be symbolic of a Sadie Hawkins dance – going after it, girls ask first. What if we could hardwire that into a product?” It was the kind of brilliant tweak that comes from someone who understands the target demographic because they’re in it.
After toying with names, the two settled on Bumble, confident that branding details like hives and bees would prove a marketing boon. The app went live in December 2014 and garnered over 100,000 downloads in its first month. “Women were ready for this,” says Dave Evans, an industry consultant who has chronicled hundreds of bad experiences women have had with men on dating apps. “Women got scared years ago. This goes way back.”
It’s 105 degrees outside Bumble’s new headquarters in an otherwise residential neighborhood in north Austin, Texas. The oppressive August heat hasn’t stopped passersby from gawking at the building’s exterior. For its grand opening, artists have covered the sunflower-yellow roof and walls with thousands of oversize pastel balloons. It looks like the inside of a gumball machine. Pedestrians take selfies in front of it; cars linger, drivers asking the name of the company inside. At Bumble, even something as ostensibly mundane as a crosstown move is a marketing opportunity.
Bumble has 70 employees, approximately 85% of whom are women, including in all the top jobs, Andreev aside. The new office reflects that, from posters and neon signs espousing various Bumble mantras like “You’re a Queen Bee,” “Be the CEO Your Parents Always Wanted You to Marry” and “Make the First Move.” When Bumble hands out its cream-and-yellow sweaters as gifts at events – the familiar honeycomb logo on the front, along with the word “Honey” – there’s invariably a scramble.
“I think it’s part of feeling empowered, being proud enough to say ‘I’m on this service,’ ” Evans says. “On the street, if I was wearing an AdultFriendFinder shirt, it’d be a different story.”
The bee theme and Bumble’s signature yellow are front and center in the app, which works like this: When two users of the opposite sex match by swiping right on each other’s profile, the woman must send her potential date a message first or the connection is void.
By giving women control over the initial contact, Bumble feels more polite and walled-off than competitors, avoiding the unsolicited photos – including the occasional male genitalia – that plague online dating. Last year Bumble banned shirtless mirror selfies (common in male profiles on Tinder); they were the most-left-swiped photos. This doesn’t mean Bumble can prevent all abuse or unpleasant experiences – but it does undercut them.
The more controlled environment has resulted in surprising dividends. Hundreds of thousands of women indicated on their profiles that they weren’t there only for love. They also cared about friendship and career. Hence BFF, an offshoot that focuses on platonic connections between women, and Bizz, which launched officially at the October party at the old Four Seasons in New York and offers a challenge to LinkedIn, with the same women-first interface that Bumble’s users have grown accustomed to. “We’re taking out the soliciting nature and the sexism that exists in networking,” Herd says. “We think we have a chance.”
Success for these offshoots has been modest so far. Bumble BFF has been tried by over 3 million users, but just 500,000 are active in a typical month. Bumble Bizz is too new to evaluate, but like taking on Tinder with a product customized for just under half the workforce, even modest success carries huge potential.
“To be able to test at that scale is something most start-ups can’t do,” says Evans, the consultant. “They can seed that network with millions of people on Day 1.”
Of course, there’s at least one other dating start-up that also has the scale – and enough men and women – to delve into such areas. Rad, who is still at Tinder running its mergers and acquisitions arm, Swipe Ventures, declined to comment for this story (as did Mateen). But the company is obviously taking notes on Bumble’s moves: Last year Tinder also expanded into platonic relationships with an investment in Hey! Vina, a fast-growing female-friendship network.
And then there’s the keen interest of Tinder’s parent, the Match Group, which remains the biggest player in the online-dating business in the United States. The publicly traded company, which in addition to Tinder owns Match.com, OkCupid, PlentyOfFish and other niche dating sites, would clearly like to add Bumble to its roster.
“Look, Match has been lucky, because they have 45 different brands,” says Brent Thill, who covers the dating-app market for Jefferies. “But probably the one brand that seems to have caught everyone’s imagination is not theirs.”
Herd wouldn’t comment on the attempted buyouts, but selling to Tinder’s parent and folding Bumble under the same corporate umbrella would, of course, serve as a poetic coda to the ugliness of 2014. Indeed, among those at the headquarters dedication were representatives of a high-profile Hollywood production company that is contemplating making a movie about her saga. It is, Herd acknowledges with a laugh, a pretty good story. – Written by Clare O’Connor
Packing Light In School Bags
Former South African rugby star John Mametsa provides alternative energy solutions for the state. With his wife Tumi, he says their future in the business is bright.
In his prime, former Blue Bulls winger John Mametsa had rugby fans screaming in delight at his try-scoring exploits at Loftus Versfeld Stadium. Between 2001 to when he retired in 2010, he had brought smiles on people’s faces.
Hidden beneath the rugby bravura on display on a weekly basis were Mametsa’s entrepreneurial exploits, which led him to co-found Soltech, a solar technology company he started with his wife Tumi.
Soltech has bridged the gap between solar technology and user-friendly consumer products by creating school backpacks, outdoor umbrellas and lifestyle bags custom-fitted with solar power.
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The smiles are back but Mametsa has brought them in a different form.
Soltech’s main aim is to help companies achieve their corporate social investment targets and make a real difference in the lives of school children who might not have electricity at home, or whose access to electricity is limited.
“Generally, I love giving back. Just to see the kids smile brings joy to me,” Mametsa says.
“It is the best space I could have asked for. Other than when I was involved in rugby, this is the best thing I could have ever been a part of.
Putting smiles on kids’ faces is the best thing. Because we are dealing with children, we have aligned ourselves with people that want to make a difference.
“We don’t stop at just giving them the bags where they can charge phones and study at night but we also educate them about the social ills that come with roaming on the internet and social media.”
During this period of Eskom blackouts, uncertainty about South Africa’s energy and a widening chasm between the haves and have-nots, he says Soltech’s products make a difference in the lives of ordinary citizens.
In a sense, they’ve taken the might of solar technology and put it right in people’s hands. The school bags come with a solar-powered battery, which has a night lamp and cellular phone battery charger installed.
“With everything that’s going on at Eskom now, they (citizens) are using millions of liters of diesel per month, just to keep the lights on,” Mametsa says.
“Hence, it’s coming back to hit our pockets and they (Eskom – South Africa’s national energy provider) are raising the electricity prices again. Such things we have to read about so that, as we grow, we educate the people that we are selling the bags to.
“At some point, you need to convert [to reusable energy sources], you need to start using solar energy. We are still fortunate that there’s an Eskom in the first place. What about those countries that don’t even have electricity at all?
“Yes, we have power cuts but the people that really need the bags are people in the rural areas.”
Admittedly, Mametsa was the pretty face and Tumi conceptualized the idea when they started. But their partnership was perfect in more ways than one. Tumi, just like her husband, had a massive entrepreneurial drive.
While Mametsa was playing rugby, he would dabble in taxi and printing businesses – an uncommon trait among sportsmen and sportswomen who are at the peak of their powers. Tumi was no different. As a student, she would sell hair and cosmetics products, something that sharpened her business senses.
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And despite a successful 11-year career in corporate as an accountant and financial manager for companies such as Alexander Forbes and the Film and Publication Board, Tumi took a bet on herself and dedicated her time fully to building Soltech.
The result was that, in just the company’s second year, they have signed a memorandum of understanding with Finland solar technology company Tespack. Tespack founders Caritta Seppä and Yesika Robles were last year named in Forbes ’s 30 Under 30 Europe.
The joint venture will see Soltech come out, among other things, with a solar-powered, fast-charging power bank, which should totally disrupt the smartphone accessories market.
“There’s going to be skills and knowledge transfer,” Tumi says.
“The DTI (Department of Trade and Industry) is also backing us on the partnership because we need them and their funding to assist us. We will be hiring South Africans to work the machinery, which was something that was very attractive to the DTI.
“The Tespack partnership confirmed my belief that our company could grow from a small tree to a forest someday. Once we manufacture in-house we can streamline the process. And there are so many other ideas for products I have, such as ladies’ handbags and stuff.”
Here at home, Soltech has partnered in CSI projects with Liberty and Exxaro and they hope to grow their client base in the next couple of years. It is a huge endorsement of their products and should see them salve some of the hurt from the country’s electricity crisis, especially to those who need it the most.
‘Worth Millions And Billions’
Terence Terenzo, the award-winning South African hairdresser and founder of hair salon group Terenzo Suites, on his biggest investment decisions and blunders.
What is your investment philosophy?
One of my philosophies is to really analyse ‘is this an investment or is it a money pit… Are you sure you got a good investment and not a liability?’… Over the last 10 years, I’ve tried to invest in things that don’t absorb all my time and energy.
So if someone were to say to me, ‘you can work your butt off seven days a week and we will give you a million rand a month, or you can take it super easy and do the absolute minimum but you can have R400,000 ($27,700) a month’, I would rather take the R400,000 because that would free me up so much more.
I would have time to do things that are important and other projects. So, for me, it is about setting up passive income businesses instead of creating businesses that need huge amounts of management.
What are some of the big investments you have made over the years?
Most of them were in property but this, Terenzo Suites, is one of the biggest investments I have ever made. It was many many millions. And then on the stock market, I’ve played around on the Johannesburg Stock Exchange where we have invested quite heavily. I would use it, then look at the market and sometimes pull the money out and move it. I have also invested in Naspers.
Have you had any regrets?
If any entrepreneur tells you that he hasn’t had that [an investment blunder], he is lying. So, what happened was I bought a property in 2008, just before the [recession]. I was stuck with it for years and even when I sold it, I sold it many years later at the same price I bought it.
I bought it in an absolute inflated stop end, and it was really at an all-time high and I had to sell it at an all-time low… But the main thing for me about those kind of things is that you learn from them and you must not beat yourself up for too long.
Try and see what you learned from them.
Why did you invest in the hair business?
I think the hair industry is going to explode in South Africa and the whole continent, if you just think of the possibilities of wigs, hair pieces, hair colors and relaxers. Millions of women before weren’t so worried about their hair but as the world has changed so much, all of them want to look amazing and they want to look current, fresh, sexy, and that is all a part of the hair industry.
What should you consider first before you invest in your hair?
I think the one thing is to have a professional conversation with someone instead of just doing your own thing and, usually, hairdressers are quite happy to consult with you without charging you before you make a serious investment in hair pieces or wigs.
How big do you think the hair industry is in Africa?
I think it is worth millions and billions… and I think it is an undiscovered industry that is still going to explode. I don’t think we have scratched the tip of the iceberg with this.
A Germ Of An idea
The microbiologist-turned-entrepreneur Babajide Ipaye started making good-looking shoes to fit his size 48 feet but decided to create them for others as well.
Selling shoes was probably the last thing Babajide Ipaye, a microbiology graduate, envisioned doing. But when by the age of 10, he was already wearing his father’s shoes, a size 44, he knew that some day that he would step in that world.
The only child of his parents, who passed away in a car accident when he was only 11, Ipaye was raised by his grandparents and extended family members who shaped the early years of his life.
“I had a lot of people who were trying to nurture me and they had different professions. So for example, one was an artist and I was endeared to him, another one was a medical doctor, so my granddad wanted me to study medicine and another uncle was a computer scientist, so I was kind of confused growing up. I wasn’t sure what I wanted to do, so I kind of lived the life of almost everyone that influenced me,” says Ipaye.
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That confusion helped Ipaye cut his teeth in various industries early on in his career. His medical doctor uncle influenced his career as a microbiologist where he worked with Ideas International Bio Technology Services, spending his days cleaning up oil spills and bacteria.
Then followed a stint in Information Technology (IT), a move also inspired by another uncle, where he worked with Tranter IT Infrastructure Services and Computer Warehouse as an analyst deploying managed technology services for multinationals like Guinness, Total and KPMG.
“At this point in time, IT was very hip and we happened to be one of the early pioneers in the tech space which was a very exciting time and considering where I was coming from in microbiology, it was a new field for me, I was working with multinationals and the exposure was amazing, it gave me a very broad sense of how organizations function.”
But Ipaye soon became dissatisfied with being put in a silo. There was too much structure and rigor due to the size of these multinationals and he became bogged down with a lot of systems and processes, which ultimately stifled his creative juices. His solution was to start his own IT company, Torque Technologies.
The company began providing IT equipment and technology services in its early days to multinationals before quickly creating a niche for itself in the fiber optics space. In early 2003 to 2005, the Nigerian telecoms era had just started booming and Ipaye and his partner saw a first-mover advantage in fiber optics by providing training to firms in Nigeria, which they did for the next 10 years.
By 2015, Ipaye decided he wanted a new challenge outside the IT world. After parting ways with his partner, he began to ponder about his life-long struggle with footwear.
“So I said to myself ‘why don’t I make my own shoes?’ So I went on the internet, did a bit of research and came across a school in the Netherlands called SLEM. I called them up and found out about the shoe-making course and I said since I was on holiday, why don’t I take some time off the business and explore how to make my own shoes and I went to the Netherlands.”
Keexs was born. The goal was to make shoes that fit Ipaye’s size 48 feet but also looked aesthetically pleasing. But making shoes for him alone would prove to be too costly.
Ipaye decided to make shoes for others as well. He would focus on the athleisure market, which is a portmanteau of ‘athletic’ and ‘leisure’, a market that has grown to the stage where it is no longer a trend but a mainstay in Nigerian fashion.
To stand out in the competitive footwear market, Ipaye decided to add some African elements to his innovative footwear brand and focused on outsourcing the production to a factory in the Netherlands while he focused on the product and design to save on cost.
The aim in the long run was to move production to Nigeria where he could fulfill the brand’s social mission of providing employment and skills training to unemployed youth. However, to make the business viable, he had to make a minimum of 1,000 pairs of shoes to achieve economies of scale. Next came the challenge of securing startup funding.
“From my previous experience of starting my technology business in Nigeria, I came to realize that the cost of funding in Nigeria is very high and also there are a lot of businesses chasing funding and the risk level of most potential investors in Nigeria is very conservative and they don’t want to invest in stuff they are not sure about.
“So I read about crowdfunding and consulted a company in the Netherlands and I came across a site called kick-starter which is a US-based platform that offers a global crowdfunding platform to innovative ideas and projects, hence we started the first innovative and social focused brand in Africa,” says Ipaye.
In just over two years Ipaye has managed to grow the business through leading e-commerce sites like Jumia and Konga as well as via its own website which receives orders from countries around the world. The shoes sell for anywhere from $40 to $60, with over 8,000 pairs of shoes sold till date.
Keexs has about 18 outlets in Nigeria with retail partners in Kenya, South Africa and Guadeloupe and Nairobi.
The company also sells through social media channels where they boast over 15,000 followers on Instagram. The long-term goal for Ipaye is to secure enough funding to set up a factory in Nigeria, which he is looking to raise through an amalgamation of funding sources including grants and loans.
“We realized very quickly that economies of scale is critical to drive the growth of this business therefore there is a need for a lot of capital. There are four sides to this chain; production, design, distribution and retail. The problem with a lot of businesses in Africa is that they are expected to do everything from start to finish along that entire value chain and what that does is, it stifles the growth of the business,” says Ipaye.
The big-time hit when CNN profiled Keexs on its African Voices show. Since then, they have managed to establish themselves as an innovative social brand focused on empowering unemployed youth in Nigeria. Next on the to-do list for Ipaye is establishing a production line in Nigeria, and then taking his brand global.
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