At the end of 2012, dating startup Hinge was running on fumes. It only had $32,000 left in the bank.
Justin McLeod's, Hinge's founder and CEO, raised $100,000 a few months prior, but only a few thousand people were using it.
"Hinge wasn't a mobile product then," McLeod says. "We made some business assumptions that turned out to be wrong. We were like, 'This thing is running out of money and we need to do something drastic.'"
McLeod and two of his developers flew to Florida where they holed themselves up and developed a mobile version of Hinge. They submitted it to the app store on January 15 for a February 7, 2013 launch.
Most of the remaining money--$25,000--went to a hail-mary pass: a massive 2,000-person launch party in Washington, D.C. McLeod hoped the buzz generated from the event would give the app enough attention to keep it alive.
But two weeks before the party, Apple rejected Hinge's application. McLeod's team scrambled to resubmit the app, but by February 6, it still wasn't live in the App Store.
That's when McLeod began to freak out.
"We were on the verge of launching without an app," he recalls. "It was too late to cancel the party, because most of the money had been committed. I wasn't eating or sleeping. It was all about to come crashing down, and it was the end [for Hinge]."
The morning of the party, McLeod received an email from Apple. Hinge was finally available for download.
That evening, as thousands of guests partied alongside DJs and guzzled drinks, Hinge shattered expectations.
Like Tinder, Hinge lets users see profiles of single people nearby. They can like or nix a profile by tapping a button on the screen. Unlike Tinder, Hinge only connects friends of friends and third-degree connections, adding social credibility to every match. While that may seem like a small pool of people, McLeod says most users have only met 3 percent of those local connections before.
The day after the party, more matches were made on Hinge than the entire year prior. Investors agreed to give McLeod's startup a lifeline.
Hinge is now one of New York's hottest startups. Although Tinder is much larger (it makes more matches per day than Hinge has in its entire history), McLeod's company is starting to steal some of the $750 million company's users.
"Hinge cuts through the randomness of Tinder," one daily user told The New York Times in March. "I can take some comfort that she knows some of the same people I do." In July Hinge raised $4.5 million from investors, bringing its total funding to $8.6 million.
Hinge makes over 8 million matches, up from 1 million in March (Tinder, by comparison, makes 15 million matches per day). It has expanded to 20 cities and is most popular in Los Angeles, San Francisco, New York and Washington, D.C. It uses a waitlist to assess demand in other cities, then launches when a few thousand people have signed up.
The Man Behind the Hail Mary
McLeod, 30, isn't your typical tech founder. The Kentucky native looks like he walked out of a J Crew catalog. He is a fan of meditating and recently finished a 300-hour yoga teacher-training program. But the prepster has a rebellious, adventurous side, and he can code.
When McLeod was 15, he was fired from his restaurant bus boy job. To make money, he helped local businesses build websites, which he found far more lucrative. McLeod had gone to "nerd" summer camps at Duke University, where he had taken computer science courses.
Although he was captain of his high school tennis team and president of his student council, he preferred partying over studying and didn't have many college options. McLeod went to Colgate in upstate New York, and nearly found himself expelled on more than one occasion. On his first night, he smoked indoors and set off the fire alarm--his entire dorm was evacuated. He also confessed to drunkenly throwing snowballs at his RA's window.
By the end of college, McLeod says he cleaned up his act. After graduation, he worked in consulting, and later in health care. He traveled to places like India and Thailand, where he says he spent a few months trying to find himself. Then he went on Harvard business school, where he landed a job at McKinsey, but he never showed up for his first day of work.
McLeod comes from a family of entrepreneurs (his father and uncle both have building supply companies), and he wanted to be one too.
"Half way through my second year, the idea for Hinge clicked," he says. Harvard was throwing a "Last Chance Dance," at which students could confess their feelings to crushes before the program ended. A Facebook page for the dance was set up allowing attendees to declare their affections.
"I'd never join OK Cupid or Match, but there was something really lightweight about that [event] and its Facebook page, which sounded cool."
McLeod spent 2011 on his own, raising a small seed round from a loose family connection who worked in venture capital. He went to San Francisco and linked up with a friend who worked for Google, crashing on her floor while they built the first version of Hinge. The friend decided to stay at Google, and McLeod moved back to the east coast to see Hinge through.
Now Hinge is finally paying off, although McLeod knows many founders have tried to build similar startups and failed. And Facebook, which Hinge heavily relies on for friends-of-friends matchmaking, could pull the data plug any time.
"There is no shortage of companies that have tried to build what we've built," McLeod says. "But we're using the organic, city-by-city method, which I think is the biggest thing... We're a utility to help users meet great people in the flesh as effectively as possible...We want to be a house party that has a really good host."