by andrew_null on 5/26/15, 6:20 PM with 185 comments
by qq66 on 5/26/15, 11:03 PM
Huge numbers of products are marketed towards increasing one's attractiveness in some way, whether shampoo or automobiles or clothing, and outside of Axe body spray, very few of them are explicit about it. There's no reason that websites wouldn't follow the same script.
by mastermojo on 5/26/15, 7:54 PM
It is actually 0.95^12=0.54 (5% churn/month = 46% annual churn).
by beat on 5/26/15, 7:19 PM
And then, by the time they've acquired enough real-world professional experience to actually understand some interesting and high-value problems, they have a mortgage and kids and don't want to eat ramen like they did when they were 22.
by birken on 5/26/15, 7:12 PM
Dating is also always going to require work that can't be replaced with money. I can throw money at my laundry, my meals, my house cleaning and completely outsource them. But with dating, regardless of how good the site or matching is, I'm still going to have to meet the other person and have to do most of the "dirty work" involved with dating myself. So I'd think that fact limits the upper bound of money they can charge and upper bound of money a dating company can make.
by NhanH on 5/26/15, 6:56 PM
by mml on 5/26/15, 8:05 PM
by nostrademons on 5/26/15, 8:05 PM
1. They are broad, holistic consumer problems where a success metric might be clearly defined (find a spouse, get a job, earn a degree), but the steps to get there aren't.
2. There is a social status component: people (rightly or wrongly) make status judgments about your life outcomes.
3. Success means you don't need a product.
There's a big mistake that many rookie founders make with these industries (and I'm speaking from bitter experience founding a career-guidance startup): You can solve people's problems, but you can't rob people of their problems.
I met my fiancee on OKCupid. I met her on OKCupid. But I did the hard work of living an interesting life and adjusting my expectations to reality on my own. We did the hard work of earning each others' trust and respect, building a relationship, and overcoming our differences together. We deleted our OKCupid accounts about a month after meeting.
Similarly, someone who gets a job through LinkedIn gets the job themselves, LinkedIn doesn't get the job for them. They have to do the hard work of building the skills and meeting the qualifications themselves. They need to build their network themselves. They impress the hiring manager and interviewers themselves. LinkedIn is a tool for managing this, but it is not and cannot be the reason for their success.
A lot of founders look at hard problems like dating or unemployment thinking "This sucks. It shouldn't suck. I'm not going to rest until everyone has the perfect spouse, perfect job, perfect skills, etc." They don't realize that this is not a problem they can fix. If they could fix it, it would rob their customers of their humanity, of a lot of what makes them real. The reason we choose people as employees, as spouses, and as friends is because of things they do and challenges they overcome, not because of products they use.
Successful companies in these spaces realize this and focus on one individual sub-problem they can solve to make people's lives easier. Tinder won't get you into a relationship, but it shows you people of your preferred sex. Indeed also shows you options, but getting the job is your responsibility. Google has done wonderful things for self-education by making the whole web available with a few keywords. LinkedIn and Facebook started out as great rolodexes, but then (IMHO) have been steadily ruining their products by trying to creep into more and more of my life.
by mbesto on 5/26/15, 7:47 PM
Huh? I've seen quite the opposite. Anecdote: The League [0]. $2mil in funding without the existence of a product or a team (when it was funded). There's some very mainstream investors on that list too.
Investors who don't invest in dating apps don't do it because they know the problem never gets fixed. Investors who do invest in them, know they can sell to IAC. As I've heard from a prominent VC who is friendly with the Match.com board (paraphrased) "The whole dating app market knows that at scale finding someone on a dating app is statistically no different than finding one at a bar. We simply making going to the bar easier".
by tlb on 5/26/15, 7:37 PM
by balls187 on 5/26/15, 8:24 PM
Here are some counter points.
> I’ve heard [Churn] numbers as high as 20-30% monthly
Making an argument based on hear-say.
> Dating is niche and has a shelf-life
So is the market segment for weddings, and newborns. Underserved niche markets are ripe for "disruption" which follows with it--investment.
> Dating products have historically depended on paid acquisition channels to build their customer base,
Source?
> City-by-city expansion sucks
It's an extra challenge, but ubers, and airbnb's and many other marketplace as a service have figured it out.
> Demographic mismatch with older, married investors
While there are investors whose methodology precludes them from investing in markets that have not bearing on them, it's probably safe to assume at one point in their life, they had to date.
by vannevar on 5/27/15, 12:33 AM
by solve on 5/26/15, 7:34 PM
- Don't target people for whom success in the app will make them want to churn = people looking for a public committed relationship.
- Target people for whom success will make them want to use the app more = people looking for secret private hookups!
by fredkbloggs on 5/26/15, 10:52 PM
by pimlottc on 5/26/15, 8:30 PM
by Beausoleil on 5/26/15, 10:46 PM
by jrs235 on 5/26/15, 7:12 PM
by eonw on 5/26/15, 9:30 PM
the other issue with growing a date network is the fact that it is a hyper local focused market, so unless you have a good regional marketing and roll out plan, traction will be hard to gain.
these two problems coupled make it a pretty tough nut to crack. reeducating, recreating trust and moving market by market is going to a cost a bit. the good news is, members tend to stay around a while, in fact often times for a few months after they have found a new person to date. If you want MRR, dating is even better then porn.
one thing that was good for the market was the disappearance of myspace and aol, both of which allowed for searching via zip, dating status and age... making them free places to find possible dates.
source: used to work in the web based dating industry.
by svalorzen on 5/26/15, 8:32 PM
It seems to me that it's the opposite, mating for humans is such a basic instinct that there will never be a shortage in the market, considering also that new humans that want to date pop up at a pretty much constant rate.
by rdl on 5/27/15, 12:20 AM
i.e. throw down $25k on whatever valuation purely to build a relationship with 10 teams/year, with the hope one might survive as a business, and one or two might be stellar teams who fail for reasons specific to dating, but will come to you first when they do their next startup. $250k/yr isn't that expensive, and you could pre-screen by just investing in 100% of the YC dating-or-adjacent companies.
Extra points for going out of your way to be helpful vs. maximizing your return, and being super helpful during inevitable wind-down.
by ig1 on 5/26/15, 7:52 PM
If you look at successful SaaS businesses users who pay <$50/month are pretty much always loss leaders. Almost all the money in SaaS is in enterprise and large customers.
It's very hard to make subscription work for consumer SaaS businesses simply because the margin between CAC and LTV is so small. Gaming (ala World of Warcraft) has shifted away from subs to IAP because it's easier to lower CAC through making a product freemium than to increase LTV.
Commercially successful dating sites have become so through increasing LTV by locking customers into long term contract and reducing CAC via shady tactics to increase conversion. Neither of which many investors want to be associated with.
by lifeisstillgood on 5/26/15, 8:25 PM
In the end though, most business and consumer interactions at least begin with something very similar to dating. So solutions found in "proper" dating sites ought to be translatable to sales and marketing apps
Even advertising is a weird form of one sided dating, with the most promiscuous and least picky self selecting for paid exposure to man y many potential new partners.
by tiatia on 5/27/15, 2:04 AM
You don't have users and new users are turned off by the fact that you don't have users.
by alaskamiller on 5/26/15, 7:50 PM
AirBNB is dating for owners and renters.
Facebook is dating for content and readers.
Amazon is dating for supply chains and consumers.
Tinder is for hookups.
by rebelidealist on 5/27/15, 3:38 AM
by caseysoftware on 5/26/15, 9:05 PM
by adamzerner on 5/27/15, 2:18 AM
by yogi123 on 5/26/15, 9:07 PM
by anovikov on 5/26/15, 8:47 PM
by dcre on 5/27/15, 5:21 AM
Amusing word omission.
by ape4 on 5/26/15, 7:15 PM
by graycat on 5/26/15, 10:23 PM
(1) There are lots of singles, and the number is not going down. Sure, each year some get married, but others come of age.
(2) Potentially there is a lot of money in the match making business at least in the sense that most young people, especially the women, are highly motivated to get a match.
Let's support this claim: The women are motivated by ballpark $10,000 to $60,000 a year and are spending that now. How? Sure: College.
It's still the case (blame Mother Nature) that heavily women go to college to get their Mrs. degree and otherwise their teaching certificate or RN. Feminists, aside, that situation won't change soon. Maybe some people like this situation and maybe some don't, but, still, blame Mother Nature.
But college is a poor place for young women to get their Mrs. degree: Why? The male students are nearly all too young, too poor, and unemployed.
Other main competition: Bars. Bummer. What Mr. Right wants to meet his Angel in, what, what the heck, a, what, a bar!
Look, guys, neither the bars nor the colleges are on the way out of the match making business from customers getting married. So, why conclude so soon that a match making service has to be on the way out of business from losing customers from making matches?
Match making better than college and bars: The woman can be pretty and the man, older, ready to be good as a husband and father, that is, someone the woman will have a super tough time meeting otherwise. This is a very old story, not going away soon.
I remember: In college, the girls wanted nothing to do with me. But nine years later I drove my new, high end Camaro back to my college to look up some stuff in their library, and walking from my car to the library, for the first time, from 60 feet away, I got a really good look from an undergrad woman. That's the truth, guys: The car and my age, and that was enough -- I passed the first two filter questions on her list for Mr. Right. Blame Mother Nature.
Fathers? They would be better off saving on college tuition and getting some really good match making for their daughters.
Big, untapped, totally natural market, very poorly served otherwise: Start with the women younger. Example: Lady Di. When she was 15, she decided that she would marry Prince Charles. About five years later, she did. Mother Nature says: Girls 12+ are thinking about husbands. So, by age 15-16 they might be ready for a Sunday dinner at home with a candidate Mr. Right, late model car paid for, house bought, cash in the bank, good job. Then 2-4 years later, she gets married.
In human history, this is not nearly a new idea, but a good match making service -- and it would have to be really good -- can be one of the best ways to make this work for the girls/women, their fathers, and the men.
(3) How to get new singles to replace the ones that get married? Sure: Go to singles groups; the standard is church youth groups. Churches are smart enough to invest in the future -- have married members who make more members.
Another way? Sure, hold singles parties, eventually invitation only. So, meet "the best people". So, much cheaper than a high end country club or yacht club but with potentially even better results.
(4) Barrier to entry. Sure, match making is necessarily nearly a local business. So there is a geographical barrier to entry. So, get the best collection of singles in one area and have close to a natural monopoly.
Of course, the software doesn't have to be local.
by endgame on 5/26/15, 10:25 PM