Online Dating Industry Consulting & Commentary

Here’s a cautionary tale for all you online dating startups trying to out-Thread Thread. Part history lesson, part obituary, this one’s for the 10+ startups working in the  social  dating space.

In recent years, the dating industry has focused first on niche sites, then it was all about mobile, and now the industry’s newcomers are focusing on social dating. While there are already countless ways to discover new people on the interweb such as millions of blogs, Twitter, forums, newsgroups, email newsletter discussions and so on, everyone is hot on social dating. Why? Two reasons, lower customer acquisition costs and *potentially* faster growth via viral effects and hopefully higher effectiveness due to some people finally starting to understand the power of trust, reputation and vouching systems.

As for history, remember that Match had a social dating feature in 2002. Engage was another early site focused on an early form of social dating.

Now we have everyone jumping on the social dating bandwagon. Social dating takes the best K-factor (viral) growth know-how from Facebook, adds a dash of vouching for friends, a pinch of testimonials and some basic technology to match each other up. It may lead to a friendship, or a hookup, depending on the focus of the service. Profiles tend to be more dynamic, the crowd younger, and nobody pays for anything (yet). As social dating evolves, this definition will no doubt be refined, but we have to start somewhere. Leave a comment if you have something to add to it.

Here’s the conundrum, a social dating site is only as good as its members. If lots of people are highly engaged the site has a better chance at taking off. If people try it, then bounce after a while when the new car smell has gone away, the site isn’t going to do very well and the churn monster rears its ugly head. Then there’s the whole topic of how to you get people to pay for something on Facebook.

While Myspace is generally for connecting with new people and bands, Facebook is for connecting with people you already know, like college roommates and that girl you dated 10 years ago. Now that Justin Timberlake owns Myspace, there is a clear opening for another discovery service for friendship and dating (which is where it gets complicated.)

Reality is that at a self-reported $125 million revenue, Badoo has won the game before the rest of the teams have shown up to the stadium. This depends on how strict your definition of social dating is, and you know how I feel about Badoo. Not enough meaningful interaction with real people, unless you count monetizing hookups and lots of fake profiles, in which case its a blockbuster success. End of story until I meet with Badoo marcom people to get The Real Deal, or at least the party line for their sanitized US efforts.

But first, lets go back a few years for some perspective. When I started the Corante (world’s first blog network) Dating and Discovery Advisory Service in 2005, social discovery was the tip of the spear for our efforts. One of my first clients in the dating space was Engage, the granddaddy of social dating as its defined today. I’ve written a ton about them, use the search function on this blog to dive down that rabbit for a history lesson if you’re interested.

In short, Engage was the first big site to have separate profiles for men and women. Dr. John Grey (Men are from Mars…) worked on the site along with Trish McDermott, who was a driving force for Match early on and now working for another dating site.

Engage was about friends matching friends, leaderboards, non-singles matching other singles and some potentially interesting functionality. Not to mention a clean slate and loads of cash to spend.

The founder, a smart serial entrepreneur, made a series of missteps, trusting expensive design/interaction firms to make things pretty and function like people *supposedly* wanted, and ended up with a so-so looking site that was fairly complicated, featured awkward social features (by today’s standards) and most of all they didn’t grok that its all about ad spend when it comes to starting a dating site.

To top it off, consider how difficult it is to get your friends to introduce you to their single friends. As a professional single person, I’ve resorted to an incentive of two round-the-world airplane tickets if you introduce me to my wife.

And these new companies think that people will flock to their services to hook up their friends? The jury is out on that one and will be for a while.

Of course some sites go viral and blow up big time, but that list is short and those companies exist in rarified air that most entrepreneurs can only dream of breathing.

Ok, so lets talk about Engage. After blowing through something like $6 million, Engage sputtered to a halt and was acquired by Spark Networks. Anyone who knows anything about the dating industry knows where this is going…

Spark Networks did absolutely nothing with Kismeet. For moths, if not years, I never received an email from the service, then all of a sudden, boom, emails started trickling in, and then nothing, for months at a time. Sad, because the service had such promise, but it required evolution and lots of care and feeding to grow, and Spark was unable to or chose not to provide enough resources to grow the Kismeet brand. Throwing out the Engage name and replacing it with Kismeet was the first mistake and things went downhill from there.

Fast forward to today and my inbox has a notice from Spark that Kismeet is closing its doors. Sad but not surprising. I think the acquisition price was around $300k, but I may be way off on that. Engage obviously sweet-talked Spark into the deal, and Spark payed the price, literally. No idea how much Spark made off of Kismeet, but judging by the lack of communication with members, I’m thinking not very much.

Now Spark is trying to transition Kismeet members to  JDate, Christian Mingle and Spark.com. These three services are likely the breadwinners in the Spark portfolio of dating sites. I wonder how many people are going to take the leap?

And so, we bid a sad Adieu to Kizmeet, the greatest social dating site that was ultimately unable to reach that beautiful point where thousands of people are flooding the front door each and every day.

To the myriad dating startups trying to replicate and improve on the 7-year-old Engage model, please contact me and lets do this right so don’t have to write your obituary in a few years. Your investors, family and most importantly your customers will be glad you did.

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