Finding love for a new dating app in a brutal market
How the Spritzr app found a match on Product Hunt, and other steps to grow a dating startup
How many people do you know who are building their own dating app? My guess is that if you have any connection to the tech world, you probably know a handful at least. There are 906 listed on Angellist and several thousand more that are still a twinkle in their founder’s eye. Everyone thinks they’ve got a novel twist on the online dating model, particularly since the success of Tinder. It’s probably the only startup category that regularly elicits an eye-roll when you tell people about it.
What people don’t tell you when you get into the online dating world is how damn difficult it is to make it in this category. There are huge problems that stack the deck against you — far worse than for startups in other industries. First there’s a structural problem in the underlying economics. The more successful you are as a dating site, the more your customer churn. So you’ve got a small ‘window’ in which to monetize a customer and make your investment in him/her payoff.
Secondly, the cost to acquire customers has historically been very high since the only marketing channel through which dating sites have scaled has been paid advertising as shown in this excellent post from the founder of Howaboutwe Aaron Schildkrout. Advertising from Match.com and the other major players has driven up the price of this channel. On top of that dating startups can no longer advertise on Facebook without being ‘whitelisted’ first, barring use of one of the lower cost advertising options. The recent podcast covering the travails of The Dating Ring shows the difficulty in acquiring new customers in a highly competitive market.
And finally, even if you do scale, then the only real exit option is IAC/Match, who don’t pay a premium price (because they know they don’t need to!). As a result, there’s very little venture capital that goes into this sector. Silicon Valley essayist Andrew Chen covers this in greater detail here. A dearth of venture capital means that there are very few breakout dating companies despite the plethora of startups.
So, why would any sane person think of launching a new dating startup? Well firstly, the problem of how to find a partner for a relationship still remains. Less than 1 in 4 online daters find a relationship, and 7 times more time is spent online than on dates. If any other product you bought had these kind of success metrics you would probably return it.
But hasn’t the growth of Tinder and other dating apps fundamentally improved the ease with which to find quality dates? Er, no. There’s a lot of swiping and messaging going on, but the actual number of connections made are tiny compared to the effort that goes into it. The ‘hit rate’ for guys on Tinder is believed to be less than 0.5%. In other words, guys have to swipe right 200 times before they get a match! So it becomes a numbers game.
For girls, they get a ton of matches, but it’s hard to know who are the good ‘uns from the bad. There’s also a lot of drop off between getting a match, to entering into a chat, to going out on a successful date. So the chances of you going from seeing a person that you like to going on a successful date with them are minuscule.
OK, so hopefully you believe that the world needs a better dating product, particularly if you’re looking for a relationship and not just a hookup. I created Spritzr because I was searching for a quick way to find quality dates. Online dating, whether Match.com or Tinder, was exhausting and not generating me the quality dates I was looking for. Like most people, I found my best dates came through my social circles — through parties, weddings, and intros. In particular I had this married friend, Caroline, who would set me up with friends of hers. However, it required a lot of effort on Caroline’s part, and generated quite a bit of awkwardness.
I thought if I could reduce the effort and awkwardness involved in matchmaking, and make the process fun and engaging, then more friends would be willing play matchmaker, and singles like me would have this great stream of quality match suggestions. Plus, you’d overcome the problem of churn since Daters would switch their profile to Matchmaker once they’d found someone.
OK, but even when you think you’ve got a better dating product, how do you grow it? Well, you can’t rely on virality alone to get you there. The only dating companies to have succeeded in going viral were Grindr and Tinder, and even the latter you can argue only got there after being seeded by IAC, the behemoth parent of Match.com.
The viral channel has not been an option for dating startups because of the prior stigma with online dating. People didn’t want to tell their friends about the online dating sites they were using. Even though that stigma has now evaporated, and potentially there is greater scope for a dating product to go viral, it’s best not to count on it in your growth strategy.
In the first phase, immediately after launching, you’ll likely spam your social networks to acquire the first few hundred users. Then you can try to get press to generate a few hundred more customers. You might try posting on Hacker News and Redditt and hope that what you’ve got to say is interesting enough to generate some more downloads. However, it’s likely that at around a few thousand users you’ll have tapped out these free sources and have to explore the paid marketing channels.
And that’s when the reality of doing a dating startup will really hit home. You need money in order to scale further. But with dating startups being so out of favor in Silicon Valley how do you get to the next stage?
Enter Product Hunt, a new platform for startups to compete for attention over the course of a day. Each day a new batch of startups are ‘hunted’, to be put in front of the Product Hunt community for discussion and debate. The community ‘upvotes’ products that they like the look of, and there’s a leaderboard showing the days most upvoted products.
Product Hunt provides a new free method to acquire new users and accelerate growth. Here are a few numbers on Spritzr’s product hunt experience:
- 30k App Store views over the course of the day
- 20 times more app installs on the day than typical, and 6 times more app installs on the following day
- 55% increase in app activity from existing userbase
- 150 upvotes by end of the day, and position on day’s top 10
- 20 comments from product enthusiasts, marketers, and venture capitalists
However, although this additional user acquisition is helpful, the most important aspect of launching on Product Hunt is the exposure it generates among an influential group. As a result of a string of positive comments and featuring in the day’s top 10, we’ve entered discussions with several potential investors. The social validation and the traction shown on Product Hunt convinced them that this was something worth looking into.
In many ways, Product Hunt can be seen as democratizing the startup playing field, allowing your product to be rated in an unbiased fashion by tech fans. That being said, having relationships with members of the Product Hunt community can definitely help your cause by throwing more followers your way, generating more momentum for your campaign.
For anybody contemplating starting a dating company, first recognize that this is going to be one of the hardest markets to have any kind of success in. You’ll most likely fail and burn a lot of your own and your friends’ money. If you still want to dive in, build the product quickly and get onto Product Hunt as soon as you can. The momentum and discussion that you generate will be a proxy for the likelihood of your future success.