There is no opportunity for “first mover” advantage here. This business suffers from what Paul Graham calls the ‘chicken and the egg problem‘ – no one wants to use a dating site with only a few users.The same Online Dating Magazine estimates that there are more than 2,500 online dating services online in the U. alone, with 1,000 new online dating services opening every year. Lawsuit claims and Nigerian con artists are up, and disillusionment is growing. So sites have to invest heavily in viral marketing to achieve critical mass, which competes with current social networks, while users expect to join both for free. It’s hard to invent and patent more “scientific” methods on how to match people.Some estimates say there are 8.000 competitors worldwide. After years of dramatic growth in the 70-80 percent range, online dating revenues have leveled off in the U. Most people, especially women, don’t even want to feel like they can be ‘matched’ by a computer.
After all, isn’t dating all about making new “friends,” and finding them in all the right places?
If you want a more intimate (virtual) encounter, try the Facebook Super Poke application. I’m already seeing search engine parameters that can match image features, so singles will soon be able to search cyberspace for their ideal partner, without the need to join any dating site.
How about the next generation search engine, answering the question, “Who is my ultimate soul mate?
” Perhaps I shouldn’t suggest that no one can win in this space.
However, because 99 out of 100 fail, and because some have an unsavory reputation, you won’t find many Angel or VC investors who are interested.
Plan to focus on that other popular tier of investors – founders, family, friends, and fools.Certainly if you expect to get any traction in this market, you need some real innovation. But you better hurry, because potential winners like Women Behind Bars, Herpes-Date.com, and e Harmony Pets are already taken.So please don’t send me any more business plans along these lines, looking for investor funding, with no marketing budget, and promising huge returns. By Martin Zwilling CEO & Founder of Startup Professionals, Inc.; Callaman Ventures Board Member.Match has a contextual advertising system featuring “Audience Cubes,” which “give advertisers the ability to reach desirable audience segments with the accuracy and scale they demand in today’s competitive online ad space.” Imagine new members in this situation- should I click the links to learn how Match works and find the person of my dreams, or click the domain name registrar with a photo of a guy wearing a tutu? Online dating sites usually fail because online dating usually fails.The simple reason is that everyone expects quick results, no one can make that happen, and users get very unhappy very quickly.