Moderator:
Dan Slater, Author
Panelists:
Steve Carter, eHarmony
Brian Bowman, LikeIt.com
Lawrence Cervantes, AnastasiaDate
Dan Winchester, IntroAnalytics
Dan
Slater: Online dating in modern era – What is disruption and where is
it happening? There have been a few stages of disruption in the past 15
years and I think that eHarmony represents the first major one.
- About 3 or 4 years after Match launched Dr. Warren started a site that
focuses on marriage. eHarmony spent hundreds of thousands of dollars
each month on TV advertising and it was the first major disruptive force
in the business. It caused Match to reassess its strategy. They thought
about buying eHarmony. They tried to niche themselves out at first in a
way that wasn’t effective for Match. They tried to do it with their
advertising campaign. Eventually Match.com launched a company that was
just another competitor to eHarmony. - Then you have free dating POF and OKCupid, we have the Grindr and now most major dating sites have a mobile application.
- Behavioral matching is sort of a corrective force that says: “okay you
may be saying that but we’re going to watch you and we will tell you
what you want.” - Offline dating, such as HowAboutWe. People can argue and I hope the
panelist argue over whether this is innovation or disruptive innovation.
So
the first thing I would like the panelists to flush out for us is of
the innovations I just spoke about. Which one you think has been the
most important in a disruptive sense and why?
Steve:
I think what disrupted online dating more than eHarmony coming along
was the changing societal attitude about being online. It was geeky
college kids and sad lonely middle age people who couldn’t tell people
at work or in public that they were online all night long typing and
clicking. When Match.com got into competing with the single white male
ads in the back of the weekly newspapers across the nation it was that
kind of stigma against this behavior amongst people that needed to be
disruptive. And if eHarmony did anything by talking about relationships
it was getting people to realize that online dating wasn’t just for
hookups.
Freemium services or free services have been very disruptive.
Which
then brings me to the behavioral stuff. What Facebook is trying to do
and what everyone is afraid of, it is to leverage that enormous amount
of data that is out there on people to solve the problem people are
trying to solve with online dating which is to meet someone. So I would
say any use of big data offers the potential for mass disruption.
Panelist:
I think the important thing to realize is that up until now there has
been a big barrier to entry from new entrants into the dating industry.
They have to collect lots of profiles of people and get people to fill
in lots of forms saying who they are and what they’re looking for, etc.
I
think with big data a lot of that is disappearing. We don’t need those
profiles of who is going to be interested in who there are many other
ways of doing it either by watching people’s behavior or by using other
data that might be collected on them such as their Facebook Likes, which
may give us a social interest graph and may give us enough information
to be able to make accurate pairings.
I
think we’re looking now at a potential for a lot of new entrants into
the industry. Some very big entrants such as Facebook may come in and
that’s got to be probably the biggest disruption we’re going to see for a
very long time.
Dan Winchester: I
would argue that there hasn’t been any meaningful disruption in the
last 13 years. The closest I’d say anyone has come to disruption is the
free space. POF claims to have more users than any other dating site.
And Match.com paid $90 million for a company with $3 million worth of
revenue. I do think there is still the possibility that free dating
could usurp paid dating and the industry just gets smaller financially.
Brian Bowman: Having
been at Match when eHarmony came out literally took the high end of the
business away. It helped to legitimize it and it segmented dating into
those looking for a serious relationship. Then Markus came out with POF
and that took out the bottom end of the industry which was those looking
for free hookups or free dating. I think they’ve done a phenomenal job
and are #1 in virtually every country they’ve participated in but it’s a
fairly weak product.
To
me, the biggest reason dating hasn’t innovated is the business model
and this 1990 model of charging to communicate obfuscates all kinds of
innovation.
So
the major innovation in dating is going to be infusing social
networking, social profiles, who you know in common, who your friends
are on top of the dating process.
Larry Cervantes: I
think instead of being disruptive, a lot of what we call innovation is
simply adoption and implementation, which my company does as a business
model. We see models out there that are successful or maybe they’re not
successful and we give them a shot. One example is the video chat
market, which may not be as prolific on some domestic sites but is a
major mover in our industry.
The
other issue is the pay model. We don’t have a membership component but
we feel it’s fair that you cut the largest slice that you like and pay
as you go. I don’t think that international dating is a disruptor per se
because our clientele are kind of different animal.
Dan Slater:
Would you say having moved mail order brides online in the past 5 to 10
years has moved the yardstick at all in terms of enhancing a number of
folks who are interested in it because now it’s so easy to access? Do
you think online dating has shifted the stigma a bit?
Larry Cervantes: The shift has been in the international move, the ease of travel and the internet itself, the wall is coming down.
Dan Slater:
In the past year or so we’ve been hearing a lot about social dating.
Some sites are starting to be successful but I think it still only
appears to a very small segment. I would like the panelists to talk
about what some of the impediments have been whether it’s cultural or
technological to social dating disrupting the online dating space.
Dan Winchester: Social
is all about eroding privacy. You erode privacy and the more you do
that the more valuable the user gets and the bigger the database gets.
Dating is all about respecting privacy and it just wouldn’t work if you
didn’t respect the privacy of your users.
Brian Bowman: Privacy
doesn’t matter. Every social dating site has failed. I believe it has
to do with the cold start problem. It’s extremely expensive to acquire
enough users. Additionally the Facebook data is fairly weak. Facebook
data is not only old, meaning I may have liked something 2 or 3 years
ago, it’s just not very deep. So you have to then go out and ask people,
what are your real interests. Do you integrate with Netflix and Eagle
Nest and Yelp and Open Table? Now you have this really interesting,
robust living profile that allows you to do interest matching.
So
it is absolutely coming. Who do I know in common? I believe it will be
transformational in terms of the industry and what’s going on.
Dan Winchester:
I disagree with that. I think it is of such minor importance to a
potential partner what you’re watching on Netflix. You might be able to
enhance a profile to a minor degree but you’re not going to disrupt the
incumbents just by adding a little bit of information based on what
you’re pulling off on how people are using online services.
Brian Bowman:
Sorry that’s really not the point. I believe the role of a dating site
is only one thing – let me have a great first date. If you give me
enough to talk about and I get over the awkwardness of the first meeting
and if one topic begins to get difficult I switch to another and the
rest is up to me after that first date. But if I can help you have a
great first date because there are lots of things to talk about it
really helps.
Steve Carter: People
would have to be linked to some kind of status saying: “I am interested
in dating people, I am searchable”, which are all problems that
Facebook is going to face very shortly with their Graph tool.
50%
of new relationships in the first 3 months end up dying or going away.
If you make social dating controllable so that I can keep the guy who
was a bad first date from becoming a stalker and knowing everything
about me then you’re going to solve social dating. Right now I think that’s
a barrier. Most people want to control to a certain extent what the
universe knows about them.
Brian Bowman: I
think the industry does a horrible job of matching. So the fundamental
problem is you’re having bad dates because we just don’t have enough
information about people to match them.
In
10 seconds if you know someone’s name you can go to LinkedIn and find
out where they work. There is no privacy as soon as you know someone’s
real name and city.
Now
how much do people want to be connected is another issue. I think
Facebook is struggling and working hard to set up privacy filters so
that there’s level of comfort for everyone.
Dan Slater: What impact Facebook Graph search may have on the online dating?
Dan Winchester: Graph
search, in my view, is Facebook trying to add intent into their already
well established advertising business. It’s not Facebook trying to move
into dating. In other words, they want to serve job ads, dating ads,
classified ads but they don’t want to become a dating site.
Dan Slater: What if it’s not about dating. Facebook has always been used for dating, but now it just has this enhanced dating capability.
Dan Winchester: If you don’t call it dating then how do you signal an intent to be receptive to being approached by virtual strangers?
Dan Slater: Well there is a relationship status button.
Dan Winchester: That doesn’t mean I want a load of weirdoes contacting me all the time every time I’m on Facebook.
Panelist:
So you’re saying that it is purely Facebook’s attempt at adapting
rather than the technical difficulties of actually making those changes?
Dan Winchester:
Yeah Facebook is saying we’re no longer going to be a social network;
we’re going to be dating site. They could do that but they can’t do
both.
Brian Bowman:
If they want to do this they are absolutely positioned to do it better
than anybody because they know a tremendous amount about you and they
know who you are. The profile issue is an absolute distraction. The
question is, is that a priority for them?
Steve Carter:
Facebook doesn’t really know that much about us, you know who knows a
lot about us? It’s Google. Does anyone know why Google hasn’t entered
this space?
Dan Winchester:
If you want to meet someone you go to Match.com and if you don’t want
to pay for it then you go to POF. How can Facebook and Google do that
better? I didn’t get the sense that Facebook users are on Facebook
saying I really wish Facebook was a dating site. I don’t get the sense
of people on Google saying I really wish Google was a dating site. I
really wish all this crap I searched for on Google was exposed to
potential partners so they can see that we’re into the same stuff.
No
one is disrupting dating. This isn’t going to disrupt dating because
dating is actually a pretty simple problem to solve. It’s about
discovery and messaging and that’s already being done very well and the
only way to disrupt it is to do it cheaper.
Larry Cervantes:
Google is ideally positioned to create a separate dating function. I
think there’s a lot of media out there, a lot of magazines for instance
that have their own proprietary dating sites.
Brian Bowman:
Facebook knows a shit ton. It’s not on Facebook, there are several
hundred thousand people contributing into the open graph. Look at the
companies I mentioned like Netflix, Amazon. All that data doesn’t get
redistributed back if you’re a Facebook API consumer, they keep it
internally.
Dan Slater: What happens if you’re a Facebook API consumer? Just explain that.
Brian Bowman:
If you build software on Facebook you sign up for access to what’s
called an API and they then give you meta data: profile information,
pictures, friends, interests, etc. but they don’t redistribute what I
like on Pinterest or what music I listen to on Pandora. Facebook knows
it; they’re just not redistributing it. I believe Facebook can if they
want to, do this in a very mature way.
Dan Winchester:
I think you’re a bit obsessed with users wanting to date with all this
information available and I don’t think there is an evidence to support
that.
Brian Bowman:
The industry has a 65% turn rate. People leave dating sites not because
they’re having a good experience but because they’re having a bad
experience. Women on average get 300 emails per week and men get a 70%
response rate and it’s a lot of work to date. Why? Because we have
shitty matching.
Dan Slater: I have to disagree with you. People on eHarmony and Match.com are being very successful.
Brian Bowman:
And a vast majority of the users are not successful right. There is a
sub 10% subscription… Sub 10% subscription, which means 90% of the
people aren’t communicating and a 65% industry wide turn rate, people
are leaving and that means 90% of the profiles can’t talk… you don’t know
who is subscribing.
Dan Slater: Would anyone in the audience like to ask some questions?
Tanya Fathers:
I think dating sites protect people from unnecessary information and
give people a chance to know the interests they want to show first
instead of digging for who is my ex-husband.
Audience:
Meeting people through friends of friends is the number one way people
meet their match in life, followed by school and online dating being
number three. So meeting people through friends of friends that’s the
most popular way people meet, you then are taking a model like Facebook
which interests the mass number of singles who are still single and
therefore it opens up this concept of dating to a much, much wider
audience.
It
allows people who would never consider being labeled as an online dater
to find people online and do it in a way that they’re finding them
through friends of friends.
Dan Winchester:
It may be that Facebook allows people to extend that real world dating
pattern into their online world to a certain extent but there are plenty
of people who use dating sites specifically because they don’t want to
meet friends of friends. They want to meet people who they have no
friends in common and if all goes wrong it is completely insulated from
their life.