How to start an internet dating business
I have accompanied more than 30 telecom operators, media and technology companies in as many different countries, defining their strategies facing disruptive business models or performing due diligences as part of a broader transaction process.
However, to be called a “niche”, I would need to understand a subset of which bigger market (for which people pay a monthly subscription fee) the dating industry is.
This is even questionable if the dating market has more than two mainstream segments (18–35 and 35 ) as the market capitalization of IAC (that owns Tinder among multiple other brands) would probably be in the same range as Tinder alone.
Yes — paid acquisition channels are still expensive, (more expensive than it used to be when Tinder was launched) but in comparison to other industries suggested by Andrew Chen, they are also almost the only incurred costs (you don’t need any content or sales team).
But yes, it hurts to spend money on paid acquisition instead of content, both in your mind and in your balance sheet.
Ultimately to be successful a new comer needs to have either (both options are not mutually exclusive) a (1) truly differentiated product that can araise from the concept, the UX, the price of the service (free in the case of Facebook dating…), using a new technology or (2) a cost advantage that makes the customer acquisition radically cheaper.(1) Users are constantly looking for a new and differentiated product: Dating app users are not known for their loyalty, which makes the so-called built-in churn a rather good news for new comers.