The Lessons Learned from Running A Failed Dating Site
This is taken from Chapter 2 of “Explosive Growth — A Few Things I Learned Growing To 100 Million Users & Losing $78 Million” by Cliff Lerner available on Amazon.
Explosive Growth is about the wildest startup story you’ve never heard of (until now). This compelling & inspiring narrative gives your startup a step-by-step playbook to achieve explosive growth, combining lively & often hilarious storytelling, proven tactics, & case-studies.
Chapter 2: The Early Lessons Learned From IamFreeTonight.com
(Continued from Chapter 1 of Explosive Growth)
“I’ve learned it doesn’t matter how many times you’ve failed, you only have to be right once.” — Mark Cuban, Legendary entrepreneur, investor, author, and television personality
Fueled by the hard work of a few integral people, our new dating site, IamFreeTonight.com (IMFT), was up and running in November of 2006. We got our first users and grew at a decent pace considering our limited funds, but we still had a lot to learn.
The Network Effect
One thing we realized after accumulating a user base was the value of the network effect in online dating — a product becomes more valuable when more people use it. For example, when a female from NYC signs up on a dating site, that’s a new search result and potential connection for many other users. Imagine Facebook, LinkedIn, or other social networking sites with only a couple of your friends in the user base — it wouldn’t be very useful.
The network effect is even more crucial for a dating site, as users only get value if there are thousands of other users they can interact with. Whenever a guy or girl signed up for IMFT, that’s a new profile for users to check out and possibly get a date out of.
The network effect also affects the longevity of an online dating site. If the user base of an online dating site never grows, and all the profiles that are on it are the same ones that were on it six months ago, nobody gets any value out of that, because all possible matches have already been made. Then, there’s no reason for anyone to continue using the site.
I realized that all my great ideas about uniqueness weren’t going to matter if I didn’t find a way to get a large number of users to sign up. I needed to spark interest, create buzz, and get a lot of activity going. We didn’t just need a few thousand users — we needed a hundred times that or more. The embarrassment factor of online dating at the time made this seem like an impossible task.
The reason an online dating site needs so many active users to succeed is that if it has 100,000 users spread out equally in the U.S., the most basic search of just an age range, gender, and location will leave most users with less than a hundred profiles to browse. When more detailed search criteria like height, body type, and ethnicity get added, that number is likely reduced to just a few. This issue isn’t understood by entrepreneurs starting a dating site, because they drastically underestimate how many active users they need for the site to continuously add value to the user.
This is also why there is rarely a change in the market leaders of products. It’s usually a winner-take-all outcome in each niche market, and it’s why Match.com, eHarmony, PlentyOfFish.com, Tinder, etc. have been the leaders in their target markets for many years now. Even though there are start-ups every day launching with new, exciting, and even superior features, they rarely gain traction, because the power of the network effect and the winner-take-all outcome is nearly impossible to displace.
We successfully executed the wingman concept to battle the safety concern with online dating, but the embarrassment factor still lingered, and the question became: how to grow the website in an industry where people don’t talk about using it. From that question, we learned a lot of valuable lessons about marketing and growth which I discuss in “The 3 Questions Every Startup CEO Needs to Ask to Reach 1 Million Users.”
The $50,000 Bust
An experienced nightclub promoter once pitched a unique way for us to get a flood of new users on the site. It would cost us $50,000 on a spring break promotion. We went all in on that idea, because marketing our product to thousands of users in our core demographic at once seemed like a great way to get the surge of activity we desperately needed.
Helicopters would fly overhead at Key West, and they would drop flyers over the crowd and write “IAmFreeTonight.com” in the sky. Girls in bikinis would walk around handing out flyers all over the place.
It was a massive effort — a marketing blitz to gain an exponential number of users from one big promotion — and it produced a whopping zero signups. That’s right, the ROI on our investment was zero users for $50,000. It doesn’t take a degree from Cornell to figure out that was not how we wanted to continue to invest our money. This would not be my last bad idea.
#ExplosiveGrowthTip: Learn how to validate an idea with as little time and financial investment as possible. Do you have a plan to validate your ideas cheaply? (Tweet your #ExplosiveGrowthTip to @clifflerner)
Startup Book Recommendations: Little Bets: How Breakthrough Ideas Emerge from Small Discoveries by Peter Sims & The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries.
We took some time to lick our wounds from that costly and damaging marketing bust, then restarted the brainstorming about how to grow the user base, because time was of the essence.
We knew how to get a good amount of press coverage, because we had already been on some big-time talk shows like Geraldo and the Mike and Juliet Show, but getting a lot of signups all at once still eluded us. The goal then became to figure out how to leverage that press coverage to obtain the bigger influx of users that we needed. That was when we discovered the fine art of newsjacking.
Newsjacking with College Basketball and Celebrity Crotch Shots
Take a hot button current event, combine it with some data relevant to your industry, arrive at a hypothesis that may or may not be crazy, and the result is massive publicity. That’s the formula for the concept we call newsjacking.
The first time we put this idea to work and realized that we had something very useful was when the Duke University Blue Devils lost in the opening round of the 2007 NCAA Men’s Basketball Tournament. Although Duke was far from a powerhouse that year, it was still a shocking defeat, because they had a tradition of deep tournament runs. For them to lose in the opening round was quite the stunner, and more than depressing for the alumni and current student base.
Seizing the opportunity to steal publicity, we piggybacked off this story and created controversy through our own press release that drove attention to our website. The press release stated that the shocking tournament loss made Duke students so upset and depressed that they flocked to online dating sites to cure their depression (misery loves company), and we provided some data to back it up.
About a week later, we got an email from the school newspaper, the Duke Chronicle, asking for some more data around the Duke’s students’ online dating activity. They ran a follow-up story on it, and it quickly became a hot-button issue on campus. The story ended up getting republished all over the country, and the Chronicle ran another story on it a week later. They interviewed a student who claimed she was in a statistics class, understood all about confounding factors, but found absolutely no correlation between the basketball team losing and online dating, which I thought was hilarious.
The story had gone so viral that I started thinking about how I could take it even further. I wanted to keep the positive momentum going, so I tried to speak to Duke’s Hall of Fame basketball coach (Coach K) to ask him if he noticed any depression among the players. Unfortunately, (but not surprisingly) I never got a call back from him. Nonetheless, the insane popularity of the topic made it very clear that we were on to something.
A couple of months later, we seized another opportunity for newsjacking: this time related to Britney Spears, right around the same time she broke up with K-Fed. All the entertainment sites were talking about an awards show scene where she was spotted coming out of her limo, and it was crystal clear to everyone that she wasn’t wearing any underwear.
At the time, we’d been thinking about hiring a celebrity to become the face of IAmFreeTonight.com, so the timing was perfect. Our press release stated that we were offering Britney $500 to be our spokesperson, but we had a reputation to uphold and refused to relinquish any of our high moral standards. Therefore, should she accept the offer, and have any other flashing incidents or momentary lapses of character, we would have no choice but to void the offer.
We pitched that to several news outlets, and TMZ absolutely loved it. In fact, they loved it so much that they interviewed me for an article about it where they said, “Lerner has decided that Britney wouldn’t be making any public appearances on behalf of his site. He says she’s too much of a loose cannon.”
#ExplosiveGrowthTip: Anticipate newsjacking opportunities by identifying upcoming concerts, festivals, sporting events, conferences, annual events, elections, and trade shows.
#ExplosiveGrowthTip: Find a fun and positive way to include your targeted blogs or influencers into a data story. They just may connect with you on it!
Mr. And Ms. Wrong User
Duke’s ineptitude in the 2007 NCAA Tournament and Britney’s unfortunate camera angle did exactly what we wanted in the short term. We got a lot of initial signups from our newsjacking efforts with those press releases. However, a couple of days after the buzz wore off, the site’s activity went right back down to a normal level. We were still lacking the key ingredient for a long-term solution. The users from those viral marketing efforts simply weren’t sticking around, and the only feedback we got was from their signup process, when the user would input something like the following as reasons for joining the site:
- “Read about it on TMZ.”
- “Saw something about it on a television show.”
- “Heard about it in the news and wanted to give it a try.”
Those statements told us that the user had a very low likelihood of sticking around, but they still didn’t tell us how to get the right users who would continue to use our product. It was a wake-up call for me, because I needed to do something, and fast. The money was running out, and we needed not just a few thousand signups from a couple of well-timed, well-presented press releases. We needed hundreds of thousands of new users to sign up, and stick around, in order to stay afloat.
#ExplosiveGrowthTip: Growth without retention is worthless. However, retention without growth is a problem any entrepreneur should love to have, because it means people love the product. Do you know what your one-day and thirty-day retention is?
#ExplosiveGrowthTip: Don’t spend significant money on marketing until your one-day and thirty-day retention is well above average for your industry.
Self-doubt reared its ugly head, and I began to wonder if our product just sucked. I always thought that if I built a site with a unique feature that addressed a real pain point for the user, people would come to it. However, it didn’t work out that way and we couldn’t get a large enough influx of users to stay in business. That’s when I started looking for something called the Purple Cow. Unfortunately, I didn’t find it — not right away.
#ExplosiveGrowthTip: A few fanatical customer advocates are worth more than hundreds or even thousands of casual signups. Fanatical users will supply word-of-mouth growth, while providing the necessary feedback to iterate on the product. Do you have at least twenty fanatical users or a plan to get them?
Marketing Book Recommendation: PyroMarketing: The Four-Step Strategy to Ignite Customer Evangelists and Keep Them for Life by Greg Stielstra.
Is That a Purple Cow?
Seth Godin, a marketing genius wrote a book called Purple Cow: Transform Your Business by Being Remarkable. In that definitive work, he describes the concept of a Purple Cow in the following way:
“When my family and I were driving through France a few years ago, we were enchanted by the hundreds of storybook cows grazing on picturesque pastures right next to the highway. For dozens of kilometers, we all gazed out the window, marveling how beautiful everything was.”
“Then within twenty minutes, we started ignoring the cows. The new cows were just like the old cows, and what once was amazing was now common. Worse than common. It was boring.”
“Cows, after you’ve seen them for a while, are boring. They may be perfect cows, attractive cows, cows with great personalities, cows lit by beautiful light, but they’re still boring.”
“A Purple Cow, though. Now that would be interesting.”
“The essence of the Purple Cow is that it must be remarkable.”
The moral of the story is that a product needs to be a Purple Cow — something different, exciting, and remarkable (something worthy of remark). The offering needs to be so unique and exceptional that nothing compares to it, and people want to talk about it.
#ExplosiveGrowthTip: Having a remarkable product is not subjective. Either people remark and it grows organically or they don’t. Are people remarking about your product?
I thought I had a great concept with IAmFreeTonight.com, but clearly, it wasn’t unique enough to be a Purple Cow — maybe some shades of light blue, but definitely not purple. Nobody was stopping the car to get out and say, “Holy crap — it’s an online dating site where I can get a date in a few minutes instead of a few days!”
At this point, we had some things that were working well, like a unique product and a knack for getting press. We also had some things that weren’t working well. For instance, although our product was unique, it wasn’t a Purple Cow, and although we could get press anytime we wanted it, the users we got from those efforts weren’t the right users.
#ExplosiveGrowthTip: A marginally better product is worthless. It needs to be at least 10x better. Have you quantified how much better your product is?
Product Book Recommendation: Hooked: How to Build Habit-Forming Products by Nir Eyal
I understood what was working for us and what wasn’t, and it was only a matter of time before I figured out the breakthrough that would give us an influx of hundreds of thousands of users. I decided we needed to survive long enough to make that magic moment happen. We had to play to our strengths, so we could live to fight another day. That meant outworking other companies in the industry, continuing to innovate, and maintaining awareness of the marketplace. Instinctively, we went into survival mode, trimmed costs to the bare bones, and sure enough, our game-changer presented itself.
The game-changer had been created in the hallowed halls of Harvard University and was being released to a wider and more public audience. A cocky, but inventive and brilliant dropout named Mark Zuckerberg was about to add a whole new dimension to the way we socialized online. It didn’t take me long to appreciate his ingenuity and the potentially disruptive impact his website would have on the online dating industry. We had to seize the opportunity to be part of it. Is that a Purple Cow I see on its way over here?
Stay tuned for Chapter 3 (Does Our Product Suck?) of Explosive Growth.
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Cliff Lerner is the Founder of Snap Interactive & Author of Explosive Growth: A Few Things I Learned While Growing To 100 Million Users & Losing $78 Million, available on Amazon. Follow Cliff Lerner to get more Explosive Growth Startup Tips and Tweet your #ExplosiveGrowthTip to @clifflerner.
