193 total views, 1 views today
“It is not a lack of love, but a lack of friendship that makes unhappy marriages”
– Friedrich Nietzsche
This beautiful quote by the renowned 19th-century German philosopher was nothing short of progressive in his time where marriages were considered just a business deal.
While that era has produced some of the most famous odes to love, marriages were seen as a way to increase financial gain, social status or as a strategic alliance. Hence matchmakers had a unique place in society.
From the Nakado of Japan, the Portador of Mexico, the Kalyn of Russia in the past to priests,marriage brokers and astrologers in the present, seems like the baton is now being passed on to matrimonial and matchmaking websites.
Matchmaking sites have been disrupting the wedding industry worldwide for years now. Not far behind are the dating apps which have revolutionized the way youngsters socialize.
The Online Dating Industry
A fairly fragmented but fast-growing industry, the use of dating apps worldwide tripled between 2013 to 2015 for users in the age group 18 – 24 years.
This was due to access to an untapped market, increased spending power, longer working hours and a growing preference for delayed marriages.
The revenue from this rapidly evolving industry is expected to be USD 1667 million with a market of 340 million users in 2019 – Statista
Online Dating Platform Business Models
An old business model, it requires users to pay a certain amount periodically to use its services. The most well-known example is Match.com, which charges users USD 40/month for its services and garnered a revenue of USD 1729 million in 2018.
Match.com is the only online dating conglomerate to have launched an IPO.
A comparatively flexible model, it provides the basic features of the app are free and they usually mint money through users who opt for paid services, access to more profiles and curated emojis. In-app advertising is also a source of income.
The most famous is, of course, Tinder, which has become synonymous with online dating. It has a strong presence in 190 countries. It generated a revenue of USD 800 million for its parent company, Match.com in 2018.
The unprecedented success of Tinder generated about 1500 similar apps worldwide.
Dating Apps Failure
Starting an online dating site has never been so easy. Not only is this business model easy and cheap to maintain, but there are also many companies that provide a customizable app solution for the same. However, it is important to understand that there are certain limitations.
1. Too many Tinder-like clones
The online dating industry is saturated with new-fangled apps that more or less do the same thing- target the mass market. They are mostly just spin-offs of the hugely successful Tinder which doesn’t help their cause.
2. The Giants and a two-sided market
The industry is dominated by a few players and it is hard to go up against them. The few that do attract a user base are most often bought by IAC or are not able to monetize its users. The online dating market is not a normal market. Hence the price structure, risks, and strategies differ from standard media market strategies.
This is something most entrepreneurs don’t realize. This industry caters to a two-sided market as the value that a user gets from joining the platform is determined by the number of consumers on the other side.
In the context of dating platforms its about the number of women who can be tempted to join the platform. A detailed study has been done on this as can be seen by this thesis published by a Copenhagen Business School student.
3. Skewed sex ratio online
The skewed sex ratio on dating apps is the reason most business models fail. A dating service will be popular only if women join. The increasing number of reports about fake profiles and “horror stories” of having dated someone found online puts off most women.
And women are tempted to join when it is covertly marketed as a dating service rather than explicitly doing so. With fewer women, the attractiveness of the platform decreases for men.
A dating app won’t work if women don’t use it.
According to a report by Pew Research Centre, “28% of online daters have been contacted by someone through an online dating site or app in a way that made them feel harassed or uncomfortable. Women are much more likely than men to have experienced uncomfortable contact via online dating sites or apps. Some 42% of female online daters have experienced this type of contact at one point or another, compared with 17% of men.”
The Evolving Market of Online Matchmaking
“A successful business is either loved or needed” – Ted Leonsis
So as an entrepreneur, what kind of a dating platform should you make?
Well, one that stands out from the crowd obviously.
To make a profitable online matchmaking business model, it is necessary to be a differentiator by targeting a niche market segment rather than targeting the mass market.
And the good news is that there are a lot of newly evolving niches in the market. Some have already launched apps to capture the newly emerging target audience interested in more customized matchmaking.
12% of 18-29-year-olds are with a partner or spouse they met online. – Statistia
Let’s look at a few of them.
1. Muzmatch – Matchmaking For Muslims
Started by Shahzad Younas, and Ryan Brodie in Aldgate, London the aim is to be a matchmaker for young Muslims worldwide. With a presence in 215 countries and 1 million Muslim users, Muzmatch combines the age-old values of this conservative community with modern day technology.
A mobile-only app, they are sensitive to the unspoken needs of their users who prefer a permanent match over dating.
Users can opt for a “premium” mode for USD 25.76 and have access to more features like unlimited swipes (there’s a daily cap for free users), highly customizable filters, preference and an option to reset or change past swipes.
Muzmatch has an estimated annual revenue of USD 3 million.
Users have the option to keep a nickname to hide their identity and reveal their photographs only to certain people. They can also have a chaperone present when meeting a potential match. Muzmatch is backed by Silicon Valley-based accelerator Y Combinator and raised USD 2million in seed funding.
There is a similar app called Harmonica in Egypt. You can read more about it here.
2. The Inner Circle – Exclusively for Elite Singles
With the promise of exclusivity and quality over quantity, this app is a cut above the rest. Joining this is akin to being invited for a tea-party with the Queen of England- an “invite only policy” where you are thoroughly vetted, your LinkedIn profile is looked into, there is a waiting list to join and what not.
Marketed as a “high-end, exclusive community of successful and attractive people” this London-based app has gained cult-status in society.
Launched in 2012 by David Vermeule, it was started with a vision to create a vibrant global community of like-minded people. It charges USD 12.88 for two weeks of access to “special features” of the app.
With people from 30 cities worldwide and 1.5 million members, the Inner Circle host exclusive events at some of the most exquisite locations for its members. It earns from event ticket sales for its exclusive parties.
You can update a business or casual visit under “trips” and the app will find a suitable match for you in the new locality. There is also a list of popular “spots” in each city where you can go with a date arranged for you by the Inner Circle!
3. BharatMatrimony.com – Matrimony At Your Fingertips
As matrimonial websites offer a chance to find a partner for marriage, they are successful in attracting subscriptions than dating apps.
Sites and apps exclusively for people seeking marriage are all the craze in Asian countries like India. Most homegrown dating apps and market leaders like Tinder are struggling to break-even. But matrimonial apps are dominating the Indian market.
According to Livemint, “matrimony.com, which owns bharatmatrimony.com recorded a revenue of USD 43.92 million in FY 2018″
Understanding how important it is for people to find someone in their own community and the same region as themselves Bharat matrimony has evolved from a generic matrimonial platform into more than 325 community matrimonial websites.
The Indian government has recognized the need to regulate a hitherto unregulated market by making it mandatory for websites to maintain IP address records of users.
It is also necessary to upload proof of identity when making your profile. This helps to weed out fake profiles and ensure the safety of women, a chief concern of the government and users alike.
4. My Lovely Parent – Over-50 and ready to mingle
This UK-based app for single parents of grown-up kids lets the kids set up a profile for their parent and browse through potential matches before recommending that person to their parent. It is necessary for a person to create a profile for a parent or older relative.
In case the senior citizen does not have a family, a friend can sign up for them.
The interested party can’t sign up themselves. It is necessary to have someone vouch for you.
It is free to sign up and view profiles on My Lovely Parent. However, to read/send messages the user will need a 1, 3 or 6-month subscription. The price starts at USD 16.73 per month. The payment request comes up only when they try to read or send a message.
“The demand to be loved is the greatest of all arrogant assumptions” – Friedrich Nietzsche
And this arrogant assumption is the foundation of a USD 1667 million generating industry and continues to grow at an incredible pace. So how do you ensure that you get a slice of the pie?
1. A Serious Matchmaking Platform
After reading the data presented to you here, it is obvious that when it comes to money making, the business models focussing on creating meaningful relationships are the clear winners.
True, the users will be slightly older and lesser in number. But they will be willing to invest time and money for the personalized experience.
2. Attract Female Users
The fundamental rule of business- Scarce resources are valuable as they give you a competitive advantage.
Here, the scarce resource is the female user base. It is important to make them feel safe on your platform. Giving them more control would make them feel more empowered and interested in using the app. Case in point- Bumble.
3. Be a differentiator
This point cannot be stressed enough. Matchmaking is as old as time itself and as far as people are concerned, when it comes to matters of the heart, there is nothing new under the sun.
So what do you do?
You prove them wrong.
Because any entrepreneur worth their salt knows the only way to go big is to create a need where none exists.
And that is how you rule over the hearts of millions!