At TechCrunch 50 a number of prominent Angel investors have shared a wealth of information about how to raise funds in today’s business climate. Anyone even remotely considering raising money for a dating service needs to read Angel Investors Say Now Is Their Time. The days of raising millions of dollars of VC money in the dating space are over. Today you can build a decent niche that scales for less than $50k and grow it from there.
The problem remains where to get the money to market the service. Dating sites are getting smarter about acquiring traffic, but customer acquisition costs are still prohibitively expensive for all but the savviest marketers.
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{ 6 comments… read them below or add one }
The cost of technology is getting cheaper and cheaper. I’d even argue that you can get up and running for under $20k ($50k is very high in my opinion).
You’re right that the customer acquisition is key and I believe in a previous post you even mention that it’s more about marketing than it is about product development (which is somewhat sad in itself). Keeping those customer acquisition costs down is going to be key for any new startup in the space.
Somewhat interesting is how there’s an earlier post saying how seeking funding just got easier (via Angelsoft), but now there’s a post about the days of acquiring significant capital is over.
Since it is largely a marketing problem, what are your thoughts on effectively using a seed round of funding ($50k-$250k) for acquiring paid customers. It’s hard to pony up cash against the larger companies (and even smaller companies as more of them pop up) to do traditional marketing plays online.
Second question… I noticed you’re “rate this” is kind of fake (= I “JUST” posted a comment and it already received a 3.5 rating?
3.5 is the default rating, go complain to SezWho, the comment system I use. I’m thinking about trying Disqus as well, which I use on my other blog.
I also disagree with the 50k figure. I have recently started a free dating site (shameless plug: http://www.FindOneTrue.com) with way less than 1k. I coded the site myself in my spare time (took about 4 months) and currently use a very affordable hosting option (less than $100/month). I am getting decent traffic from organic growth and will grow the infrastructure as my traffic increases. I am perfectly willing to have my site grow slowly instead of spending thousands on marketing.
You are not taking into consideration the amount of time it took you to build your site. Would you develop a piece of software for a client over four months for less than $1,000? Of course not.
David,
True, but I am only talking about out-of-pocket dollars spent. My point was that it is possible (if you have the programming talent) to start your own dating site with very little initial cash.