Dan Slater, Author
Dan Slater: Online dating in modern era - What is disruption and where is it happening? There have been a few stages of disruption in the past 15 years and I think that eHarmony represents the first major one.
- About 3 or 4 years after Match launched Dr. Warren started a site that focuses on marriage. eHarmony spent hundreds of thousands of dollars each month on TV advertising and it was the first major disruptive force in the business. It caused Match to reassess its strategy. They thought about buying eHarmony. They tried to niche themselves out at first in a way that wasn’t effective for Match. They tried to do it with their advertising campaign. Eventually Match.com launched a company that was just another competitor to eHarmony.
- Then you have free dating POF and OKCupid, we have the Grindr and now most major dating sites have a mobile application.
- Behavioral matching is sort of a corrective force that says: “okay you may be saying that but we’re going to watch you and we will tell you what you want.”
- Offline dating, such as HowAboutWe. People can argue and I hope the panelist argue over whether this is innovation or disruptive innovation.
So the first thing I would like the panelists to flush out for us is of the innovations I just spoke about. Which one you think has been the most important in a disruptive sense and why?
Steve: I think what disrupted online dating more than eHarmony coming along was the changing societal attitude about being online. It was geeky college kids and sad lonely middle age people who couldn’t tell people at work or in public that they were online all night long typing and clicking. When Match.com got into competing with the single white male ads in the back of the weekly newspapers across the nation it was that kind of stigma against this behavior amongst people that needed to be disruptive. And if eHarmony did anything by talking about relationships it was getting people to realize that online dating wasn’t just for hookups.
Freemium services or free services have been very disruptive.
Which then brings me to the behavioral stuff. What Facebook is trying to do and what everyone is afraid of, it is to leverage that enormous amount of data that is out there on people to solve the problem people are trying to solve with online dating which is to meet someone. So I would say any use of big data offers the potential for mass disruption.
Panelist: I think the important thing to realize is that up until now there has been a big barrier to entry from new entrants into the dating industry. They have to collect lots of profiles of people and get people to fill in lots of forms saying who they are and what they’re looking for, etc.
I think with big data a lot of that is disappearing. We don’t need those profiles of who is going to be interested in who there are many other ways of doing it either by watching people’s behavior or by using other data that might be collected on them such as their Facebook Likes, which may give us a social interest graph and may give us enough information to be able to make accurate pairings.
I think we’re looking now at a potential for a lot of new entrants into the industry. Some very big entrants such as Facebook may come in and that’s got to be probably the biggest disruption we’re going to see for a very long time.
Dan Winchester: I would argue that there hasn’t been any meaningful disruption in the last 13 years. The closest I’d say anyone has come to disruption is the free space. POF claims to have more users than any other dating site. And Match.com paid $90 million for a company with $3 million worth of revenue. I do think there is still the possibility that free dating could usurp paid dating and the industry just gets smaller financially.
Brian Bowman: Having been at Match when eHarmony came out literally took the high end of the business away. It helped to legitimize it and it segmented dating into those looking for a serious relationship. Then Markus came out with POF and that took out the bottom end of the industry which was those looking for free hookups or free dating. I think they’ve done a phenomenal job and are #1 in virtually every country they’ve participated in but it’s a fairly weak product.
To me, the biggest reason dating hasn’t innovated is the business model and this 1990 model of charging to communicate obfuscates all kinds of innovation.
So the major innovation in dating is going to be infusing social networking, social profiles, who you know in common, who your friends are on top of the dating process.
Larry Cervantes: I think instead of being disruptive, a lot of what we call innovation is simply adoption and implementation, which my company does as a business model. We see models out there that are successful or maybe they’re not successful and we give them a shot. One example is the video chat market, which may not be as prolific on some domestic sites but is a major mover in our industry.
The other issue is the pay model. We don’t have a membership component but we feel it’s fair that you cut the largest slice that you like and pay as you go. I don’t think that international dating is a disruptor per se because our clientele are kind of different animal.
Dan Slater: Would you say having moved mail order brides online in the past 5 to 10 years has moved the yardstick at all in terms of enhancing a number of folks who are interested in it because now it’s so easy to access? Do you think online dating has shifted the stigma a bit?
Larry Cervantes: The shift has been in the international move, the ease of travel and the internet itself, the wall is coming down.
Dan Slater: In the past year or so we’ve been hearing a lot about social dating. Some sites are starting to be successful but I think it still only appears to a very small segment. I would like the panelists to talk about what some of the impediments have been whether it’s cultural or technological to social dating disrupting the online dating space.
Dan Winchester: Social is all about eroding privacy. You erode privacy and the more you do that the more valuable the user gets and the bigger the database gets. Dating is all about respecting privacy and it just wouldn’t work if you didn’t respect the privacy of your users.
Brian Bowman: Privacy doesn’t matter. Every social dating site has failed. I believe it has to do with the cold start problem. It’s extremely expensive to acquire enough users. Additionally the Facebook data is fairly weak. Facebook data is not only old, meaning I may have liked something 2 or 3 years ago, it’s just not very deep. So you have to then go out and ask people, what are your real interests. Do you integrate with Netflix and Eagle Nest and Yelp and Open Table? Now you have this really interesting, robust living profile that allows you to do interest matching.
So it is absolutely coming. Who do I know in common? I believe it will be transformational in terms of the industry and what’s going on.
Dan Winchester: I disagree with that. I think it is of such minor importance to a potential partner what you’re watching on Netflix. You might be able to enhance a profile to a minor degree but you’re not going to disrupt the incumbents just by adding a little bit of information based on what you’re pulling off on how people are using online services.
Brian Bowman: Sorry that’s really not the point. I believe the role of a dating site is only one thing - let me have a great first date. If you give me enough to talk about and I get over the awkwardness of the first meeting and if one topic begins to get difficult I switch to another and the rest is up to me after that first date. But if I can help you have a great first date because there are lots of things to talk about it really helps.
Steve Carter: People would have to be linked to some kind of status saying: “I am interested in dating people, I am searchable”, which are all problems that Facebook is going to face very shortly with their Graph tool.
50% of new relationships in the first 3 months end up dying or going away. If you make social dating controllable so that I can keep the guy who was a bad first date from becoming a stalker and knowing everything about me then you’re going to solve social dating. Right now I think that’s a barrier. Most people want to control to a certain extent what the universe knows about them.
Brian Bowman: I think the industry does a horrible job of matching. So the fundamental problem is you’re having bad dates because we just don’t have enough information about people to match them.In 10 seconds if you know someone’s name you can go to LinkedIn and find out where they work. There is no privacy as soon as you know someone’s real name and city.
Now how much do people want to be connected is another issue. I think Facebook is struggling and working hard to set up privacy filters so that there’s level of comfort for everyone.
Dan Slater: What impact Facebook Graph search may have on the online dating?
Dan Winchester: Graph search, in my view, is Facebook trying to add intent into their already well established advertising business. It’s not Facebook trying to move into dating. In other words, they want to serve job ads, dating ads, classified ads but they don’t want to become a dating site.
Dan Slater: What if it’s not about dating. Facebook has always been used for dating, but now it just has this enhanced dating capability.
Dan Winchester: If you don’t call it dating then how do you signal an intent to be receptive to being approached by virtual strangers?
Dan Slater: Well there is a relationship status button.
Dan Winchester: That doesn’t mean I want a load of weirdoes contacting me all the time every time I’m on Facebook.
Panelist: So you’re saying that it is purely Facebook’s attempt at adapting rather than the technical difficulties of actually making those changes?
Dan Winchester: Yeah Facebook is saying we’re no longer going to be a social network; we’re going to be dating site. They could do that but they can’t do both.
Brian Bowman: If they want to do this they are absolutely positioned to do it better than anybody because they know a tremendous amount about you and they know who you are. The profile issue is an absolute distraction. The question is, is that a priority for them?
Steve Carter: Facebook doesn’t really know that much about us, you know who knows a lot about us? It’s Google. Does anyone know why Google hasn’t entered this space?
Dan Winchester: If you want to meet someone you go to Match.com and if you don’t want to pay for it then you go to POF. How can Facebook and Google do that better? I didn’t get the sense that Facebook users are on Facebook saying I really wish Facebook was a dating site. I don’t get the sense of people on Google saying I really wish Google was a dating site. I really wish all this crap I searched for on Google was exposed to potential partners so they can see that we’re into the same stuff.
No one is disrupting dating. This isn’t going to disrupt dating because dating is actually a pretty simple problem to solve. It’s about discovery and messaging and that’s already being done very well and the only way to disrupt it is to do it cheaper.
Larry Cervantes: Google is ideally positioned to create a separate dating function. I think there’s a lot of media out there, a lot of magazines for instance that have their own proprietary dating sites.
Brian Bowman: Facebook knows a shit ton. It’s not on Facebook, there are several hundred thousand people contributing into the open graph. Look at the companies I mentioned like Netflix, Amazon. All that data doesn’t get redistributed back if you’re a Facebook API consumer, they keep it internally.
Dan Slater: What happens if you’re a Facebook API consumer? Just explain that.
Brian Bowman: If you build software on Facebook you sign up for access to what’s called an API and they then give you meta data: profile information, pictures, friends, interests, etc. but they don’t redistribute what I like on Pinterest or what music I listen to on Pandora. Facebook knows it; they’re just not redistributing it. I believe Facebook can if they want to, do this in a very mature way.
Dan Winchester: I think you’re a bit obsessed with users wanting to date with all this information available and I don’t think there is an evidence to support that.
Brian Bowman: The industry has a 65% turn rate. People leave dating sites not because they’re having a good experience but because they’re having a bad experience. Women on average get 300 emails per week and men get a 70% response rate and it’s a lot of work to date. Why? Because we have shitty matching.
Dan Slater: I have to disagree with you. People on eHarmony and Match.com are being very successful.Brian Bowman: And a vast majority of the users are not successful right. There is a sub 10% subscription… Sub 10% subscription, which means 90% of the people aren’t communicating and a 65% industry wide turn rate, people are leaving and that means 90% of the profiles can’t talk… you don’t know who is subscribing.
Dan Slater: Would anyone in the audience like to ask some questions?
Tanya Fathers: I think dating sites protect people from unnecessary information and give people a chance to know the interests they want to show first instead of digging for who is my ex-husband.
Audience: Meeting people through friends of friends is the number one way people meet their match in life, followed by school and online dating being number three. So meeting people through friends of friends that’s the most popular way people meet, you then are taking a model like Facebook which interests the mass number of singles who are still single and therefore it opens up this concept of dating to a much, much wider audience.
It allows people who would never consider being labeled as an online dater to find people online and do it in a way that they’re finding them through friends of friends.Dan Winchester: It may be that Facebook allows people to extend that real world dating pattern into their online world to a certain extent but there are plenty of people who use dating sites specifically because they don’t want to meet friends of friends. They want to meet people who they have no friends in common and if all goes wrong it is completely insulated from their life.