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Sustainable Investing | since 1999 | ElitePartner

How ElitePartner Paved The Way For Matchmaking Online

Interview with serial entrepreneur & “hopeless romantic” Arne Kahlke

“Love Connection” — ElitePartner is a leading online matchmaking service in Germany aiming at academics and singles 30+ looking for a long-term relationship. Founded in 2004 in Hamburg by Arne Kahlke, Sören Kress together with Mark Oldenburg and acquired by Tomorrow Focus AG only three years later, it became part of the PARSHIP ELITE Group and ProSiebenSat1. Media SE in 2016.

Arne Kahlke, serialentrepreneur and co-founder of ElitePartner and LemonSwan (image source: Arne Kahlke)

After 15 years in the matchmaking business, Arne Kahlke, co-founder of far-famed ElitePartner, knows a thing or two about matters of the heart. Especially because matchmaking is a matter close to his own heart. His latest venture, LemonSwan, claims to know “What Women Want”. Given the serial entrepreneur and hopeless romantic’s expertise, it’s no wonder that 500,000 singles have found love on the platform already. With Kahlke as CEO, ElitePartner realized profits at a time when dotcoms meant “bad news” and the Internet was only just beginning to become social. Now, he talks sharp positioning, the importance of trust, relevant niches, and love in the time of Tinder — and beyond.

You founded an internet-enabled business back in 2004. What was your most memorable moment from ElitePartner’s start-up phase?
When we realized that our business model was working and made money for the first time. I don’t recall if it was a man or a woman, but the first-ever customer who actually paid for our services… it must have been around €200… To see that we were offering a product that people were willing to pay money for, that was a magical moment.

Back then the Internet was on the brink of becoming social. Facebook had just started, Twitter, Instagram didn’t exist yet, there was Myspace…
…yes, and FriendScout and some matchmaking platforms, including Parship.

Why did you decide to start your own online matchmaking service?
Before starting ElitePartner, I was working at Parship and had helped build the company. There, I had learned that online matchmaking as a business model was actually bankable. However, after the dotcom bubble burst around 2002, there was no money around and the term “Internet” was almost considered a swearword. I was convinced that we would never get venture capital to start our company. Luckily, I had saved some money from selling a previous start-up. Since I knew that despite the dotcom crash our business model was viable, coherent and sustainable, I went ahead, quit my job at Parship and founded ElitePartner. Back then, the big question was: would there be enough demand for another major player? That was the risk we were taking and the challenge we were willing to accept.

“That positioning was extremely sharp, maybe even a bit over the top for some people.”

What made ElitePartner stand out?
At Parship I had already begun to emphasize the importance of differentiating between dating and matchmaking. We needed to convey that we had nothing to do with dating — and clearly positioned ourselves as a matchmaking agency. The term might sound a bit old-fashioned, but that is what categorized us best — and what I continued to highlight at ElitePartner. Parship was already excluding anybody that wasn’t looking for a committed relationship. We took it even further: ElitePartner didn’t allow people to join merely because they were looking for a steady partner, they also needed to be well educated. It might sound a bit stuck-up and arrogant, but we initially called it “the matchmaking agency for academics”. That positioning was extremely sharp, maybe even a bit over the top for some people.

Elitist, one might say. Hence the name of the company.
It is kind of heavy and excluding, isn’t it?! But for the brand it was crucial to be seen and heard. We needed people to notice and remember us. Without that clear positioning, we would have had no relevance whatsoever and stood no chance against our competitors.

So, finding the right niche was as important back then as it is today…
My original field of expertise was branded goods. To me, it was clear all along that it’s better to position a product in a “thinkable” niche. In our case, that niche was not small at all — and we eventually outdid Parship to become market leader. You might compare it to The Green Party, who originally occupied a specific niche but would probably be the strongest party in Germany if parliamentary elections were to be held right now. You need to occupy a relevant niche in order to get noticed.

What was the role of your co-founders, Mark Oldenburg and Sören Kress?
Well, ElitePartner was an Internet-based business model. Since I didn’t have much capital, having somebody by my side able to develop, code and design the product itself was part of the initial plan. However, I couldn’t spare much money for developers and I couldn’t do it myself — but Sören could. He is one of my best friends. We go way back, and I’ve always trusted him. He was crucial in getting us motivated and providing the necessary drive to get our idea on the road.
Additionally, we were looking for somebody to oversee finance and controlling, and we found Mark. In the end, he didn’t stay with us because he didn’t carry the same DNA. Sören and I ended up splitting the company’s responsibilities between the two of us: I oversaw creative matters, strategy and communications whereas Sören took over the finance and legal areas together with the tech department. You don’t read or hear much about Sören. He likes to remain in the background, but he’s very meticulous, almost nerdy. The two of us complemented each other perfectly.

Is it crucial to have a co-founder like Sören by your side whose strength is your weakness and vice versa?
Not necessarily. Being complementary is good, in business as much as in romantic relationships. But trust is more important, I believe, and one of the reasons why our partnership was successful even beyond ElitePartner. We never once doubted that we could rely on each other 100%.

Does that apply to investors as well?
In our case, yes. Frank [Acton Capital’s Managing Partner Frank Seehaus] and the team from Munich were a perfect DNA match and they helped us immensely, especially in business areas that we initially failed to take into consideration. He didn’t get on our nerves, rather, he supported and challenged us, which motivated us to perform better. That was extraordinary and very cool.

How did you meet him?
As I said, there was barely any venture capital available at that time and we didn’t expect any investors to be interested in our company. When Frank approached us and asked if he could invest, we thought “How absurd!”. Although we had already turned a profit, money only came in gradually — and we thought we could use some cash to pay for advertising we had already booked. We would also be able to invest in more advertising to grow even faster. Sure, I must admit that we were young and naïve. Because it was so unusual at that time, we felt flattered and proud. Not only did we turn a profit, we also had investors interested in us. Today, founder teams are stunned if they fail to raise venture capital, whereas back then already the plain interest of an investor felt like an honor.

Let’s talk matchmaking. Research confirms that the happiest relationships emerge from places with limited choice. Has digital transformation and the Internet with all its supposed options made love more complicated?
I do believe so, yes. Even though single statistics might well stagnate in one year, they will surely go up the next. What I have been observing for years now is a trend towards a “disposable society.” Not only regarding material things, but also people. Everything moves faster, everything is constructed, and if it fails to work as planned, you get something new.

Unfortunately, I see that in relationships as well. This superficiality, where everything must match perfectly… if it doesn’t, you strive to become more attractive, get bigger breasts, a different nose, more muscles… whatever. People are being reduced to appearance only. And Tinder has catalyzed the whole thing. It’s not perfect? Get rid of it. Provided that it makes it through the initial getting-to-know-each-other phase… The search for love has degenerated and that is a huge problem. People today pre-design their potential partner in their heads — and if he or she does not meet these expectations, he or she is not worth it. How is real love ever supposed to come out of this?

“The search for love has degenerated and that is a huge problem.” (Photo by Kon Karampelas on Unsplash)

Therefore, matchmaking platforms use psychological profiling…
Parship, ElitePartner, LemonSwan: we all claim that our profiling algorithm is the best, but our key approaches are similar. I am deeply convinced that the inner self is most important for love to grow. This awareness gradually deteriorates in our society, making it so much harder to maintain existing relationships or to build them in the first place. People have become increasingly incapable of deep commitment. Instead of working through a crisis, they’d rather end it. I think that’s harsh.

Can an algorithm kickstart the heart?
The most important thing is to ask yourself “Who am I? Who could be a good partner for me?” instead of “Who has the biggest breasts, the best hair, the prettiest eyes?” Due to the fast-moving nature of the Internet, where everything is available with one click, people have forgotten how that works. But that’s the approach of all the psychological profiling: listening to your inner self, finding out what’s really important.

So, there is a demand, but the supply is difficult to manage?
I guess you can say that. Matchmakers’ numbers are growing, so it’s no problem for businesses like ours. Yet there is a social problem. Sure, not every relationship can be saved, but if some people were less eager to quit, have an affair, seek the easy way out, things would be better for all of us.

Are you an idealist?
Well, I am deeply convinced that Tinder is not the solution. If I was, I wouldn’t have founded a new matchmaking startup. Also, this is what I know. In that regard, yes, I would like to help make the world a better place and I am thankful to be working in a field that allows me to do so. It’s a much nicer thought than the thought of working at Tinder Inc.

“The well-educated man has become a highly demanded but rare article.”

Does the female shift and changing gender roles affect matchmaking today?
Absolutely. That is what my new company focuses on. Well-educated women have a much bigger problem finding a partner; not a partner for one night, but a serious companion. Why? The numbers of female academics have trumped those of male academics. However, women long for a partner on eye level, whereas many men are perfectly fine with a less educated partner. Simple arithmetic — it doesn’t add up. The well-educated man has become a highly demanded but rare article. Furthermore, men are more prone to believing that one-night stands are permanently available to them on Tinder and such. So why commit to a relationship? Hence, single men interested in a serious relationship became a scarce resource as well. At LemonSwan we not only pre-check if the men are educated, but also if they have the right mindset. Female “bouncers” assess in advance if the guy is a player or if he’s in it for the long term.

When you founded LemonSwan, people already knew you as a successful entrepreneur and manager. What is your advice for young start-ups today?
Our goal was to make a profit, because we had to live off it. I had invested all my money and moved into a social housing apartment. Bankruptcy hung over our heads like the sword of Damocles, but that dynamized us. Today, it is easier to get your hands on venture capital — and that might block your view or lead to poor decision making. You fail, you raise new cash or find a new investor. A little like VC-Tinder. So, my advice to founders: always ask yourself “Would I still do it if it was my own money?” and “How can I turn a profit fast?”

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Bettina Engert

Bettina Engert

Shaped FlixBus’ story from startup to corporate. Now in VC with ACTON Capital, writing about tech-enabled business models, ready to scale & built to last.