How startups turn from disruptors to conformists: The transformation of China’s biggest dating app
China’s most popular dating app Momo has experienced a transformation rarely seen among apps of its kind. Starting out as China’s most famous dating and hook-up platform, it later became a much more conservative app with a focus on networking and streaming services. How did this happen?
Tingting Liu is a researcher at Queensland University studying (paywall) the impact of social networking on sexual culture. Liu argues that trailblazing startups such as these face particular limits due to China’s unique social and economic landscape.
In 2014, Momo sought to list itself on the Nasdaq Stock Market. Branding itself as the “genius tool for getting laid”, the app accumulated over 148 million users. However, the reputation that drove its initial growth turned out to be an obstacle for its development in conservative-leaning China. Social media users started questioning Momo’s role in China’s rising divorce rate, while state media accused it of being a hotbed for prostitution. Finally, municipal authorities in Beijing slapped Momo with a RMB 60,000 (USD 8,712) penalty for allowing its users to spread erotic material banned in China.
Here began Momo’s reinvention from dating app to a shared-interest friendship and networking platform. Besides changing its core features and removing groups such as partner swapping and S&M which were deemed illegal, the company launched several campaigns to dilute its connection with casual sex. Momo built a “cleaner” image in line with the ideals propagated by the Chinese authorities. However, this does not explain how Momo came to be so successful in the first place.
Liu attributes Momo’s initial success in China to the effect that entrepreneurial spirit has on building interpersonal relationships. Earlier, social media apps such as QQ and WeChat were mostly used to build and reinforce traditional networks in Chinese society including family, friendships, and acquaintances. According to Liu, these connections are widely considered to be fertile ground for misconduct such as bribery, which can be damaging to the development of a healthy market economy. This is why in post-socialist China, neoliberal norms of entrepreneurialism, creativity, and consumerist individualism have encouraged a more risk-taking approach to networking outside one’s social circle. Momo successfully cashed in on the idea that socializing with strangers can be rewarding.
Momo’s second success was daring to go where no other app had gone before. Liu writes that in taking the risk of branding itself as a platform driving China’s sexual revolution, the company was able to find its place in an already crowded social media landscape. Momo’s goal was never to subvert monogamy and marriage — it was to make money. Therefore, folding under pressure hardly comes as a surprise.
What is surprising however is that Momo’s change in tactics has been very successful, especially after a subsequent decision to ride the wave of live streaming and virtual gift-giving in China. Thanks to its new features, at the end of 2016 the app had a record year-on-year revenue growth of 524 per cent to USD 246.1 million, while its annual revenue jumped 313 per cent to USD 553.1 million. The company suffered an initial drop (screenshot below) in active users from 84.2 to 52.4 million in 2014 while changing its strategy, however that number steadily rose to 81.1 million active monthly users in December 2016.
Despite its unique circumstances, Momo has undergone the same cycle as many startups. Once it succeeded in creating a market, it was no longer a startup — it was a fully-grown company accountable to its shareholders. Its creative edge was muted, but its revenues continued to rise. Disruptors turn into conformists, revolutionaries become the establishment, and the cycle begins again.
