The web continues to delight and surprise me on a daily basis, whether that’s new technologies, startups or simply ‘that’ person adding you as a friend on Facebook that used to be so attractive… anyway, where was I?
It’s not often that I stumble across a blog article that leaves me speechless… which was exactly what happened when Mike Butcher’s tweet lead me to this article entitled ‘Startups: Your Online Business Will Fail’ on the site Startup Professional Musings.
It strikes me that the article has been written by a chap (Marty Zwilling) that has no actual experience of the dating industry, or that he’s simply looking for reaction and link baiting. The post states that online dating sites will fail because “everyone expect quick results, nobody can make that happen, and users get very unhappy very quickly”. He goes on to add that dating businesses are tough for the following reasons:
- Direct competition is huge
- No longer a growth market
- Entry cost is very high
- Intellectual property is tough
- Social networks and search engines will lead the way
I would like to introduce Marty to the concept of white label dating sites and maybe address some of the points that he raises. You might want to grab a cup of tea and a comfy sofa. *position self on soapbox*
THE DEFENCE
Whilst I can understand some of the points raised, these are only valid when you’re talking about building a site from scratch. By launching a dating site with a white label provider, partners are provided with a database of active members, so that their site is never empty. Offering our partners a ready-made database of over 2 million members means that any new members driven to the site will be greeted by a buzz of activity and a greater chance of meeting “the one”, which is why on average our members stay 5 months.
With the spotlight turning on successes within the dating industry, more people are becoming aware of the opportunities that could exist by launching their own sites. However, there’s a huge market out there still up for grabs -it’s simply a case of distinguishing yourself from the competition and spotting your niche! Considering new markets, such as the South African network which is currently booming could be a sure fire way to set yourself apart from your competitors. Research is everything!
A DECLINING MARKET?
To say that the dating industry is no longer a growth market is just ludicrous. The UK dating industry is worth £600m a year according to HitWise, whilst Juniper Research predicts the number of paying members on dating sites will rise to 6m in the next 3 years, from 2.6m in 2006 - hardly a slowing market. As the economy goes into meltdown, I would suggest that online dating appears, infact, to be one of the few industries to be flourishing. Since September 2008, we at WhiteLabelDating.com have seen revenues and traffic to our partners increase by over 250%. That stat speaks for itself.
As there are no set up fees for starting a site with us, partners can in principle launch with no associated costs. We work on a revenue share basis, meaning that it’s in our best interests for their site(s) to be as profitable as it/they can. The partner just needs to bring their brand and spread the word. Whilst PPC (pay-per-click) is a traditional (and admittedly sometimes costly) method of driving traffic - we provide partners with much help and advice to encourage them to use other methods which are free to implement such as SEO and social media.
I strongly disagree that users are looking purely for free dating sites. Whilst free dating sites definitely have their place and can be a great tool for cross-promoting paid sites, most of the people using these sites aren’t serious about finding their match. From our experience, people are prepared to pay for a service in the knowledge that fellow members are also more serious and committed to dating. Then of course, there are casual sites, where members are traditionally happy to pay for the service, viewing it as a form of entertainment.
Yes, intellectual property can be tough. However, with a 3rd party provider, the partner doesn’t have to worry about the development of search criteria as that’s all taken care of for them. Plus, the provider will have the funds to continually update the platform, introducing new features to retain members, keeping them interested and engaged. What happened to nosing through profiles anyway?
Social networks certainly offer the potential of tapping into a vast market that may feel that dating sites are still seen as socially unacceptable. However, I would be surprised to see social networks launching dating functionality of their own at this stage. Latest developments have seen these networks open up their platforms, allowing developers to build using their APIs. Therefore the potential here is for smart dating sites to start building dating applications to take advantage of these platforms.
IN SUMMARY
I guess the difference with our partners and the audience of ‘Startup Professional Musings’ is that they’re looking to generate healthy monthly revenue income, allowing them a sustainable improved standard of living as opposed to angel investment… Put another way, for our partners, it’s a lifestyle change as opposed to an exit method.
In short, I don’t think that I could disagree with an article more - but then I wouldn’t be working for a dating company if I agreed, would I? There’s a whole team of people who come here to work every day because we love the company, we love the industry, we want to make our partners money and we want to help people find love. Simple.
*Steps down from soapbox and sighs*
Tags: dating, entrepreneurs, fail, funding, Industry, investment, love, startup
YAY!! Mel, you rock!!
Absolutely very well said - with some partners enjoying five-figure monthly profits from their dating sites, any suggestion that it isn’t a good industry to be in is simply ludicrous!!
Nice rebuttal Mel, especially considering that you are convalescing (get well soon).
….interesting to see whether you become the new Paul Carr and you and Mr Butcher enjoy a bit of friendly sparring after this.
Twitfight!
Interesting point about a new site coming pre-loaded with 2m subscribers, does that mean that if someone signs up on a white label site branded say FHM.com their advert could appear on a site for a less desirable brand such as the SAGA dating site!
This always strikes me as one of the problems with white label services (in general not your company!) Sometimes one brand will not want to be associated with another and as a white label provider you need to maintain enough separation.
Ross - thanks
Michelle - I hope not… I do think Mike’s lovely… I’m just shooting the messenger!
Sam - we pride ourselves in having different networks, therefore only matching members with other members of a similar age bracket and interest - for example someone on FHM would be on a different network than SAGA which would be on a mature network
I read the article a couple of days ago, and just chose to ignore it. It was obviously not very well-researched. I operate on the South African network, and as you said Mel, business is booming down here. My month to month ROI is beyond anything I’ve ever seen in any online industry.
Let me begin by saying that I am one of the new entrants to the market, that both posts refer, and so find this debate very interesting. Looking at it from an investor’s perspective I can understand where Marty Zwilling is coming from - all the signs do point to a risky investment proposition. However as a customer I also demand more innovation to satisfy my needs – and sometimes it’s the new entrants that provide this. Maybe the sector has gone a bit stale and needs a bit of a kick? As both posts highlight the ‘need’ and demand is still there; the $value forecasts all point to a positive; and ultimately the sector is dealing with one of the primal needs of the human being – so it should be a sound proposition. Don’t get me wrong, as a new entrant I am fully aware of the massive battle that lies ahead to get noticed but we felt that this sort of challenge should never discourage innovation and fresh ideas. The development and infrastructure costs are manageable; it is the marketing costs that can be daunting – but again this requires focus on niche areas first and innovative ideas. We did, however, ensure all our eggs were not in one basket by building our gaming platform first enabling us to spin off new brands and third party white label opportunities, so we do have a bit more flexibility, should things get too difficult.
On a slightly different note Mel it’s good to see we have similar tastes. Check out http://www.smeetme.com and see the swirl pattern we used in our designs:-)
From a passive viewer, this market certainly seems saturated; and from my point of view most of these sites that try and bolt on dating functionality are just doing it for the dollar bills. It seems to be the current trend for every lifestyle magazine aimed at males and females to bolt them on. For me, and I’m sure many others, we go to these sites to read informative articles or in FHM’s case to see some eye candy (; The expansion into dating obviously is good for a company likes yours, and for them its an easy extension with your product - but not really necessary.
There obviously is a need for reputable, freestanding dating sites and Match, eharmony etc provide this. The argument, people might be part of a rambling site, so therefore rambling site dating will help you find someone like yourself doesn’t really hold weight with me. Finding someone with similar interests is very easy on the bigger sites with keywords, tags etc, so maybe in a way all these sites are harming the industry by making it too niche.
Its not a knock against your company because you obviously do very well. You saw a market and filled it. But for me, I hope the number of dating sites popping up (or exisiting sites just bolting them on) slows down. I remember when the number of social networks popping up was at the same level, they were becoming more and more niche as facebook, Myspace & Bebo were already dominating the market. Thankfully, that has somewhat slowed down now.
You made a good point about social networks releasing valuable api’s for developers to tap into. I would like to see, for example, dating sites using facebook api’s, to leverage their already massive centralized user base. For one, you know by looking at a persons profile how genuine they are (through friends, photos, wall posts, etc). Dating sites do have many scams, mostly from Africa, so its funny that seems to be a growing market. Also fake profiles which are set up to prey on the lonely. I know you can set up fake profiles on facebook, but it is harder to pull that off. A dating profile is a static front with a few photos, it doesn’t get information added by your network of associates, friends etc.
I’ll be interested to see how the progression of the interweb does effect the dating industry. My thoughts are merely my own, I don’t work for a dating company, but do run my own interweb business, so all aspects of this industry interest me. Heads up to the woman (or man if his parents were cruel enough to call him Mel) who complied this article. It was well put together and your passion for the company you work for is clearly visible.
Keep pushing the industry to new levels, its definitely here to stay. There will always be love; unless of course the future world is taken over my emotionless, loveless androids.
Johann - I’m glad that the opportunities presented in South Africa are working out well for you. It’s always great to hear of direct experiences.
Andrew - Thanks for your valid comment. It’s interesting to hear from someone who has experiences from both sides of the fence as it were. Loving the swirls on your site btw - recognise those from somewhere?
Sam - Thankyou so much for your constructive feedback. Many publishers use our service as their ad revenue is declining and they recognise that it’s a good source of additional income. We hope that by offering readers of these sites/publications a chance to meet people with similar interests - especially when it comes to our specialist sites such as Game 4-a-Date which targets the gaming publications of Future Publishing. Of course, there are more generic sites that we offer if members aren’t looking for something as specific
I think you’re definitely right about dating sites using the Facebook API - it’s something that I’d like to see happen too, for sure.
Your thoughts are totally valid - I think with an insight to the web industry, you’re well positioned to look at the dating site with a fresh pair of eyes, so any feedback is always welcome.
Oh and I am a girl - luckily! My parents aren’t that mean
Dating sites generally seem to suffer from a stroke of non innovation.
Alignment with pertinent api’s for the dating industry would be interesting.
Usage of relevant third party social media could be fun with the right level of control.
Maybe matching up diggers who digg similar stories who register on a universal dating platform etc.
Obviously privacy is an important aspect in this space so granular controls I guess would be key.
A video response to what the article should read.
Marty Zwilling is actually smart then is made out to be.
http://www.youtube.com/watch?v=x1GB9879hN4#
I’m glad your parents were kind on the naming front, Melly (: Theres nothing worse than interweb trolls so I’m glad you took my thoughts as constructive, thats exactly how they were meant. I’m not as knowledgeable as you on the subject, and the idea of certain niche dating sites are completely valid. Especially where hardcore gamers are concerned - their eyes would meet across a WOW battlefield and it would be the beginning of something beautiful. There are totally acceptable niche markets where the differential is more than a hobby or past time, like religion or a disability. Those warrant their own site. The watering down of the so called ‘normal’ dating sites is what I don’t agree with. With a saturated market, the level of trust can decrease. I’m not sure how you ‘vet’ perspective partners but it takes only a few sites who exploit for it to become hard to know which ones to trust. Especially when there are so many sites of this type around nowadays.
I can totally see how bolting a dating site on would boost revenue, its just an idea I don’t like too much. From your companies point of a view I can understand why you push that market. You need to maximise your product.
Maybe you can answer as to why dating sites haven’t really started to utilize Facebook yet? I mean I’d love to see a site which used Facebook connect which could then pull in certain information from your account, pictures etc. It would make profiles seem more personable and give you a proper view of someones personality - normal, static, dating profiles are so generic, and I cringe at most ‘about me’ sections. And most people lie, I’m sure (;
Also as many people meet partners through friends it’d be cool to have a dating site recommend other site members who are friends of friends on facebook - kind of like a revised friend recommender you see already on facebook.
We are using it alot in our soon to be launched site which connects models and photographers, and now dating sites seem the ‘norm’ as appose to places where ‘creepy weirdos’ hang out, it would be good to see someone bring them up to the level of all other sites and use a persons online social footprint as oppose to being so stand alone.
I know facebook has restraints on what can and can’t be done but I truly think every genre of site should think about using its immense power. Get on to your web monkies and shake up the whole dating industry… more than you have done already
Sorry for the ramble. When it comes to the interweb I can spew it out - even when its not my area of expertise. Although, I do go on dates (aslong as they don’t mind me bringing my mac).
Just read your post sam, dating site have started to utilize facebook, i own a free online dating site which uses facebook and other social networks to invite singles friends and imports friends on facebook/myspace and you can select which single friends you want to invite, details of this are in my youtube response i pasted above. there is also potential whereby personal profile as well as interests etc can be imported from facebook on to the dating site but i have disabled this function as it provides users the privacy that they want when joininga dating site.
Sup, @wld? I’m no expert Internet marketing expert, but what I can tell you is that when it comes to people being lonely, you’ll have a market forever.
On that note, you guys should force Despair, INC (http://www.despair.com/) to get one of your dating sites. I would totally go on that.
Nice post. Just curious as to why you think the big social networks are unlikely to release dating platforms of their own?
Rupert - Very valid points. We’re always trying to innovate and we’re currently working on a whole raft of new features and ideas to appeal to a new generation of online daters. As well as looking to appeal to members using the potential of different platforms, I think that there’s still lots of work to be done to make the whole online dating proposition more appealing to women (who let’s face it will attract more men to the site), whom previously would have been swarmed by guys on the sites. This is something that we take very seriously and are working on tackling.
Sach - Thanks for your video response, made for an interesting watch and I agree with all of your points. FYI - we’ll be integrating video responses as part of our comments very soon!
Sam - How did you know my childhood name? I’m just imagining the WOW dates now! In terms of your question about Facebook, I think it’s still a fairly young market with the platform opening not all that long ago. The problem with developing a good dating application on a new platform is that it’s complex and takes a lot of time to get right. You want to make sure that the user experience is the best that it can possibly be - after all, that’s what will get viral marketing to kick off as you want people to recommend it for being a great application. Having said that, the potential is huge and I don’t expect that it will be long now before there are many new entrants to this market. Zoosk are doing a pretty good job already (although I would argue that this is still very social and not for people serious about dating).
It sounds as though you’re developing a cool application and I’d be really interested to see it when it launches. Oh and for the record… there’s nothing wrong with taking your mac on a date, it’s when you take a PC that you have to worry
Casual Encounters - I just don’t believe that’s where the focus for social networks is at the present. Having the knowledge of how to build a network to encourage users to interact with their friends and peers is a completely different skill from knowing what members expect from a dating site (and it’s taken us many years to build up this knowledge). From our experience, members have certain expectations as to what they’ll get from a dating site and how they’ll communicate with other members. As soon as a social network adds dating to their functionality, they have the shift of getting users of a free service to pay for something on a site where they expect things for free. That’s something very hard to achieve.
I actually think that guy is right on most of the post but wrong on some. Just taking this point one by one:
* Direct competition is huge
* No longer a growth market
* Entry cost is very high
* Intellectual property is tough
* Social networks and search engines will lead the way
Direct competition - He is right, this is VERY huge, just think of crazy prices you pay to bid for a click in the dating industry
No longer a growth market - He is wrong on this point
Entry cost of very high - He is absolutely right, lets assume you do not use a white label type platform, think of the cost of developing your own technology and marketing.
Intellectual property - He is quite right on this as well.
And on the last point, he is also partly right though accept Mel’s point about the problem that will face someone trying to turn a social networking site to a dating site.
Everyone starting a new dating site thinks they’ll automatically be successful, the guy is right on direct competition being huge and the entry cost which is very high. However, there are some online dating satyings that do make it past the growing pains and into success!
I think there are some good points here from both sides. however, it seems to me that it is not all down to a particular niche failing, but more how much you put into it.
Most mainstream areas have large amounts of direct competition but that doesn’t stop people getting in at the top of the bell curve. Take televisions people are still coming in with new brands even though the market is seemingly saturated.
Another point is that maybe mediocre success could make all the difference i.e a gross profit of perhaps £200 per month could make a vast difference to some of the people who choose the white label option.
This has to be more achievable via white label solutions and it allows people with a very small budget to get started, some will succeed and some will fail but at least it puts the possibility of success within their grasp.
Honestlly, I do not trust very much in the traditional dating sites, I see this market quite full and blocked. Part of the dating market has been taken over by the social network that has bring something new in this world, but who knows, new functionality, new technology used (like flash time ago) or who knows what will bring something new and good for the dating business.
I couldn’t agree more. The logic in the arguments of those that doubt the dating market seems sound enough but it isn’t born out by the evidence. There’s room for social networking and there’s plenty of room for dating sites too. They cater for different needs. I network and keep in touch with friends, family and work colleagues on social and business network sites and presumably they all use the sites for the same reason. If they want to find a date, they go to a dating site.
Mike Butcher once again has not done his research properly. Good piece Mel. WLD sites produce serious revenue for the vast majority of their partners. Maybe it’s a bit of jealousy on Butcher’s part.
i agree, thanks for the post, it is very informative. i also do agree to the comments, thanks again, i’ve learned a lot.
I guess that explain why online dating is a popular business on the web today