Online Dating

April 18th, 2010 § 1 comment

OK. So I worked for an “online personals” company for a while. We had to call it “online personals” instead of “online dating” because of the lawyers. It just so happens that there are legal requirements for dating services in many states that require things like guarantees and reimbursement if no matches are made.

Anyway. Here are some of my takeaways from working in the online personals space.

1. It’s a direct marketing business. At it’s core, the online dating game is about lead generation and conversion. It’s typically broken up into this simple process – find people, get them to sign up, convince them to pay, then keep them as long as possible. Simple. I say it’s a direct marketing business because, traditionally, the best way to get members is to used targeted performance based advertising. This is one reason it’s very difficult for startups to compete against the big boys w/ budgets. That and #4 below.

2. There’s a reason why all of the major online personals companies use a subscription-based model. It works. Before coming into the game w/ a “new” business model, realize that almost all of them have been tried before. Free dating, credit systems, free for women pay for men, ad supported, white-labeling, etc. Not saying that the game can’t be changed, just do your research before jumping in.

3. There are typically two types of dating site: Classifieds and Services. Match, JDate, etc. fall into the Classifieds model. No matter what they say, they’re not really about matching you based on any kind of magic sauce. Classifieds rely on people actively searching/browsing for other people. They tend to focus their efforts on two things – 1. gathering lots of information about you, especially photos. 2. getting you to view/interact with as many other profiles as possible. They make money by being in control of the communication between users. They’re paranoid that you’ll somehow go out of band and find a way to contact someone without paying – Social Networks are their enemy. Services like eHarmony or focus a lot more on matching. The idea is that people who are serious will pay, and the more “serious” you make the site, the more “serious” people will join and pay “serious” money. Services focus on the illusion of matchmaking. They tend to actually have some magic behind how they match people, but ultimately rely on the fact that their long, difficult, and sometimes expensive registration processes tend to be the best possible pre-qualifier. Funny thing is that they’re right and it works.

4. Location is important. Lots of people socialize online, but most people using dating sites actually want to meet other people IRL. This poses a massive problem for startups because they have no critical mass in any one location. There’s nothing worse than a dating site w/ no members near where you live.

5. Women use online personals sites a lot differently than men do. Women tend to use sites to manage their dating lives, men use sites to actively search out and find potential partners. I know I’m making sweeping generalities based on gender here, but the research holds true for the majority. One anecdote I can throw out there is something I saw when testing a new instant message feature on a site I worked on. I had a member of our team sign in – she happened to be an absolutely stunning female team member. The moment she signed into the site w/ the new instant messenger, she received so many IMs that the design of our notification system failed. This experience is not uncommon. I also have heard from a good number of women on dating sites who never go out to contact men. I’m still waiting for the dating site that actually designs their site around the fact that genders use dating sites differently.

6. No one has perfected the “social network as dating site” concept. Friendster started it, Facebook followed, and there are lots of others who have tried. Black Planet may be the closest and JDate basically went from dating site to social network, but no one else has effectively combined the two. Why? One reason is that you can’t make people who already know each other pay to contact each other. The second reason is that people don’t really want to date the friends of their friends, at least not online w/ everyone knowing about it. I do think there is room for a “friend as matchmaker” play in the space, but it’s hard because there’s a lot at stake for the matchmaker. I don’t envy the site that tries.

7. Users often use more than one dating site at a time. Do what you will with that info. A friend of mine who ran a competing dating site actually allowed the competition to place their ads in his search results – for a very high price – and I don’t think it hurt his business at all.

8. It’s not about the features, it’s about the photos.

I guess I could go on and add a lot more detail. Honestly, I’ve been meaning to write a post like this for years but never sat down to it. Hopefully it shines a little bit of light onto the online dating space for those who are curious and doesn’t get me in trouble with the online dating experts for not giving enough detail or being flat out wrong. Enjoy.

  • Francis Hwang

    I keep wondering if you could do an online personals site that was low-volume, high-margin, by not letting everybody in and letting other users control who gets accepted or not. Obviously it's sort of chicken-and-egg because when you start a site you need as many people as possible. But at a certain point it gets huge, and then you're searching through 8000 profiles — is that really helpful? Seems there might be busy people who'd love something that felt like less of a meat market.