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Commenter Tobin says this about starting a dating site:

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.

To Tobin’s point about costs declining – think about the people wanting to build dating sites who have zero experience with Internet business, let alone technology and marketing.They don’t have the first clue about what they are getting into.

Do they figure it out on their own or do they hire someone like me to help them build a game plan based on their goals, expectations and resources that helps them avoid common pitfalls, moneypits and time-wasting initiatives?

Am I doing due diligence on various dating software platforms? Or am I outsourcing that, or does the client already know what platform they want to use?

Is the site generic templates with an amateur logo and no thought about branding or does it implement background checks, advanced search and a customized signup form?

All of these decisions affect the overall cost of the project. Has the person starting the site thought of these issues? I have.

Then, don’t forget that developers will overcharge them because they have to take into consideration the usual delays, client changes mind and other unexpected moments all projects experience.

Then there are hosting costs, software costs, system redundancy (two of everything in different locations, servers, databases, etc), backup systems, fraud-detection licenses and other fees nobody thought to add to the overall costs and as always, much more money for programmers than you expect because as the site comes together, feature creep becomes a major issue.

A simple email communication system can easily grow into a beast of a sub-project. “Can you add images to incoming messages? How about threaded discussion? What about folders?” There’s a few thousand dollars right there, earmarked during a 15 minute conversation 2 months into the project.

A designer will charge several thousand dollars for a decent design that doesn’t look like a $29 template. If you can find a great design for less than, you have an angel on your shoulder and should consider yourself lucky.

A seemingly simple task such as applying a custom design to boxed dating software is very difficult, takes longer than you would expect and you end up putting out a lot of small fires, making compromises and someone, usually me, ends of spending far too much in the project management role trying to get things done. I say this from a lot of personal experience working on dating sites.

Does the client give themselves a crash course on software development, internet marketing, system administration, graphic design, traffic acquisition, branding and PR? Or do they hire me do take care of all of this?

Building a dating site can be incredibly frustrating and difficult, and that’s with forgiving and reasonable clients and a great dev team, software and project plan. Even if the client has a gun pointed directly at the head of everyone involved with the project, things happen. White label solutions take some of the pain away, but once your site is up, marketing your site remains a primary challenge, you loose ownership of your members and you can’t customize your site as much as with dating scripts.

Attracting funding can be difficult. To Tobin’s point, $250k is not a lot of money. I know people who raise $50,000 to kick around an idea for a few months. If the idea tanks, they shoot it in the head and move on to the next one.

Everything is relative, right? Maybe $75,000 gets a strong niche site launched and initial marketing started. Me, I wouldn’t start a mainstream dating site without $5 million. A niche you can do for a lot less, but even the niche sites spend staggering amounts of money on marketing.

Engage raised more than $5 million, OkCupid raised, $6 million, and these are free sites with 500k members. A passionate entrepreneur with $20k is going to have a hell of a time getting any traction. I’m not saying it can’t be done, only that there are a lot of other ways to make money on the internet besides getting into the dating game. It’s not easy money anymore, I’m sorry to say.

If you’re going to acquire a company for their paying customers, you’re going to end up spending a lot more than $250k for a decent ROI. I’ve never seen a dating site with a reasonable number of paying subscribers go for that amount.

Food for thought, companies like match and eHarmony spend more than $250,000 every day to market their sites.

Thanks to Tobin for the comment, it’s been a while since we talked about the effort and resources required to start a dating site. Feel free to disagree with anything I’ve said in the comments.