Aspiring entrepreneurs are always looking to tout their innovative ideas for launching dating sites. There are over 91 million interested singles in the world aged between 19 years and 45 years which always makes a dating app look like the perfect venture. However, almost no one seems to make money off dating sites.
Dating sites come with a lot of challenges in tow more than the opportunities available and potential entrepreneurs should use these challenges as reality checks before embarking on the business and investing a lot of time and money on a venture that might fail.
Some of these challenges associated with dating sites are:
The market is heavily saturated with competitors
According to research, there are over 5000 dating sites available worldwide and over 1000 being launched yearly. These numbers are staggering and are enough to put off any one looking to create a dating site. It is advisable to look for a business that has at least 10 competitors.
Dating sites suffer from “Facebook model” startup problem
Many business opportunities that depend on people’s social lives require thousand or even millions of existing users before any potential new users and advertisers are interested in paying any real money. The investment in terms of time and money before any real profits are made are huge. For example, Facebook spent close to a staggering 150 million dollars before they made any major profits.
Barriers to entering the dating site market are difficult to establish
Every new startup struggles with survival in a vicious market scene. The best way to be assured of survival is by filing patents and other intellectual property to keep any competitors from copying your success. Dating is not a very scientific process and the first-mover advantage has already been taken.
Separation from existing major businesses is small
Dating is ideally a form of social networking, which makes it easy for sites like Facebook to enhance their services in this direction if others proved evident market traction. Search engine sites including google could add image matching to capture this market. The best startups have real differentiation from other competitors.
The business area is fraught with misinterpretation
Scammers often turn to dating sites to prey on vulnerable people to get their money or attention. This is a growing concern. For example according to surveys, 40 percent of dating site users are already married to other people. If a site one is looking to create has potential for misuse it may end up tainting the reputation of the creator.
Customer value proposition is difficult to quantify
Potential investors and customers would ideally like to see returns that can be measured against costs put in place. Value propositions like “easier, faster and better” are rarely capable of competing with terms like “50 percent faster and available at half the cost”. It is important for an entrepreneur to have quantifiable value propositions for their innovations.
Beware of high turnover and minimal loyalty situations
Having loyal and repeat customers who are locked in to a particular site or service are the dream of every investor and smart business person. Dating site customers often lose customers when these customers find their perfect match and sometimes even when they have been on a site for a while without finding any potential matches. It is wise to venture into a business that has a low customer churn potential.
Steer clear of business opportunities that are not squeaky clean
Dating sites are full of stories of high rates of failure and hints of business hustle hence are greatly avoided by any major investors. Online gambling sites, debt collection and work-at-home offerings are other businesses that fall under this category. Any new business opportunity one is looking to venture into should be clear of any of these qualms.
Regardless of all these challenges, dating sites offer very many opportunities for entrepreneurs willing to think outside the box. Entrepreneurs that are bootstrapping and not necessarily looking for investors should still apply external investor type of thinking as they are working on creating their new venture.
Featured Image: DepositPhotos/AndreyPopovPosted on April 13, 2017