OPW INTERVIEW - July 26 - Mike runs one of the original and oldest white label dating services out of Gibraltar, which is just off the coast off Spain. There are some handy little tax benefits for being based in Gibraltar. Read on. - Mark Brooks
You’re based in Gibraltar. Tell us more about Gibraltar and the benefits of being in Gibraltar.
We moved to Gibraltar in 2004. The company was growing to the point where the VAT and corporation tax were becoming a hindrance to us for developing the company. The benefits of being in Gibraltar are zero rated VAT, so we pay no VAT on our membership fees, and the corporation tax is a flat fee of around 600 pounds a year. So we moved here and went from paying 16 to 20,000 pounds a month in VAT to paying zero. We also went from paying 50 to 60,000 pounds a year in corporation tax to paying 600 pounds. So from a company point of view, our overhead shrunk by 25% overnight by simply moving to Gibraltar.
Is there any down side to being in Gibraltar?
The biggest down side to Gibraltar is probably staffing. Finding skilled staff that know anything about affiliate management, SEO or web design is very, very hard. We normally have to use people who are based in Spain or fly them in from Romania or London.
Bringing them over for interviews is one thing, however climatising to Gibraltar is another one. You either love it here or you hate it. You can either fit in straight away and enjoy the lifestyle or you can find it to be slow.
Have you considered using a distributed work force and giving them the freedom to work from anywhere?
We do have staff who work from other places. We have a couple of people on the coast that work for us; we have some people in the UK that do copywriting for us. In the past, we’ve used design houses in India, Russia, and Eastern Europe in general, as well as Canada. So we do have staff that work from other places. However the core staff, such as affiliate management, customer service representatives and office managers, we need in the office.
There are some benefits for affiliates with you being in Gibraltar I understand. Could you tell us more about that? How do you attract affiliates with your business base?
When we moved to Gibraltar we spent a great deal of time talking to the tax people in the UK and Gibraltar to make sure we weren’t doing anything illegal and that we weren’t breaking any laws. So from an affiliate point of view, you don’t have to pass anything on to the tax man or the VAT man because the actual transaction is taking place in Gibraltar and not anywhere else.
Once again that’s a heck of a competitive advantage for your improvement in business efficiency. What is the founding story of Dating Central?
Me and my business partner Graham Hampson received our business degrees in Manchester in 1997. I was working in the insurance industry, on the IT side, and Graham was working for a design house. We both realised early on that design houses were reinventing the wheel every time they built a website, in a time frame of 6 to 8 weeks. We both agreed that the best way to build a website was to look at a template building system. You would then have a core engine that created these templates for you.
At the time, back in 1998/99, there was a great deal of buzz about the dating industry. So
we created a website called StudentsVille.com. We were going down the avenue of creating the world’s first white label dating service to allow all of these backroom web masters or small enterprises to have their own dating service without having to put in weeks of work and thousands of pounds.
About 6 months later, we started turning over a profit and within the first year we started to employ people. We’re self financed and never had any capital investment. Within 2 or 3 years we were making a very healthy profit. We were attracting affiliates from all industries and from all parts of the world. Once we moved to Gibraltar, we built the company up again. We managed to completely rebuild the structure, the database, the content as well as the back end. We were able to complete that project at the end of 2009. Whereby now, we have a completely new engine and new templates. Now it’s all very much Web 2.0.
How would you say you’re differentiated against the likes of WhiteLabelDating out of the UK and Global Factory who are going after the continental European market?
We differ in terms of the actual application itself. The WhiteLabelDating.com system is very much an “add your logo here” system. With our system, we try to integrate our service into your site. We are also a lot more open in regards to fees. We provide statistics where you can see a full breakdown of all your members, all of your commission, all of your charge backs and you can see at a glance, in real time, what you have done. So as far as the likes of WhiteLabelDating is concerned, we take it to the next level in terms of customisation and integration.
Our service is also tied to the niche markets. For example, we have Christian networks and Disabled networks. We’re giving our affiliates the ability to enter that market with zero overhead and zero cost. So I think the niche element of our service will always mean it will be very difficult for any competitor to come in and take away our membership database or our affiliate base. We spread ourselves across the different niches and it allows us to deal with a competitor entering the market.
You have some very specific niches. What would you say are your top couple of niches?
It’s changed in the last 5 years. We had a very stable Christian niche 5 years ago. The biggest surprise is the Lesbian network, which has really taken off. The ethnic network, which is for African-American and European Africans, has also done quite well.