11 January 2011

Time to stop checking-in & start checking-out

Thinking about geo-location (GPS) and its mobile under-utilization, I considered what applications it actually is well suited to. Checking-in and earning badges to become major of somewhere just has to be a short-term fad even if they do begin to enable deals (?).Obviously there is finding local stores/services but that is pretty well covered by Google Maps and others. Crowd-sourcing e.g. seeing where contacts have been might work if your contacts left comments about stores/services (which they don't). Seeing your contacts are close-by so you can call them and meet-up doesn't appear popular (you kind of already know where your close friends are). The forecast for the geo-location market leader - foursquare is hazy.

So what mobile app could really make use of it? Unlikely as it may seem at first, I came up with dating; although as we'll see it may be unattainable for social reasons (much like even though we already have well implemented video chat, people reject it).

Why what's the problem with online dating?

As online dating becomes more main-stream/more commoditized – even reportedly now used by celebrities, it also suffers from lack of innovation/differentiation. Online dating came to prominence on sheer convenience; being able to trawl through hundreds of profiles w/out leaving the comfort of your home. But scanning through ever more prospects due to poor matching/sparse profiles and an increased social need to be mobile/online have eroded this convenience.

Social and mobile technologies should be able to add value but they seem only to be starting to. Looking at online dating as an application area (I had to research it) and comparing it with the speed-dating space (slightly more experience) there is perhaps a solution waiting to be found.

Some sites solve several issues but, in general, online daters need to:

  1. Maintain a separate/proprietary profile.
    1. Tedious to enter/maintain personal information already online. Few dating sites are really focused on matching anyway; too complex/expensive and not immediately appreciated by the dater. It's about minimizing acquisition cost/extending CLV. They don't necessarily want to get people off the site.
  2. Periodically check to see if there are people to contact/someone has contacted them (pull).
    1. Average visit/site time is 22 minutes. Finding time for dating is a real problem, necessitating some to even look for ghost-writing solutions.
  3. Deal w/ communication awkwardness.
    1. Communicating by sending messages to strangers and then being rejected more times than not is unnatural, demoralizing long term and doesn't fit w/ the personality of anyone but extroverts.
  4. Determine the best way to leave a date if they don't click w/ the other person.
  5. Pay on a subscription basis.
    1. Market leaders for online dating – Match and eHarmony monetize on subscription. Plenty of Fish is the only free site in top-10. Sites charge $35/month on average.
      1. Free sites have their own issues though. As there is no barrier to entry, profile quality is poor as people put less work in. Many actually prefer paid sites for this reason.
  6. Deal w/ incomplete information.
    1. Feedback that could be useful to prospective daters is lost.
      1. People typically don't reply if they feel there wasn't a connection. Consequently, the rejected person is unsure whether to approach the person again.
      2. Future prospective daters of the rejected person cannot take previous criteria (from others) into account before meeting.
  7. Handle remaining social stigma among peers (despite relaxing recently).
  8. Infer second degree social graphing.
    1. Having 175 friends (pretty typical for those dating) means people can have 60,000 friends of friends (Friend of a Friend - FOAF). It is likely that many of these people are dating. Identifying these people is useful since their immediate friend can be contacted as they will provide a source of additional information (about their friend). Determining these connections becomes part of the date.
  9. Cancel their account after a few successful dates.
    1. After a few dates if the daters vaguely consider themselves "in a relationship", then it is expected that they cancel their accounts and live happily ever after.
  10. Work w/ poor, non-existent or additionally paid for mobile versions of sites.

How could these problems be solved?

A free mobile app, connected to an existing/widespread profile that, once you register (one time/through Facebook) pushes meetings to you i.e. the solution opportunistically knows that you are available (from looking at respective schedules) and are physically w/in a five minute journey (from GPS) of someone that matches you/you match (based on filter criteria you have previously entered) and so arranges it automatically (pushes it). You get the other persons picture, a profile summary and a named coffee shop (in-between you both) together with a time. You can accept/reject there and then. If you reject, the meeting is simply off (could be because the solution itself decided there simply wasn't enough time for it so fewer social rejection issues). If you accept, you meet for a time-boxed duration at a coffee shop w/ the app managing the duration and other details (like a speed date assistant).

It prioritizes similar people (of the correct orientation). Everyone needs a facial photo on their profile so that they can be recognised. Basically, you don't need to log into the site again (unless you want to) as the mobile app will push everything to you.

No-one meets up anywhere other than a coffee-shop halfway between the two people and no-one knows where the other person is other than at the coffee shop. Coffee shops are necessary since they are an easily found public space. As such the solution would work better in cities. The solution is more general than dating i.e. intended to be used by everyone. For example, you could express an interest in whether to buy the new iPhone and then meet someone who has one. Online dating would certainly be the beach-head application though.

Post meeting, you "thumb-up" or "thumb-down" the other person. If you both mutually thumb-up each other, the solution informs you and gives you the ability to exchange 1:1 contact details. This information can be condensed into a simple personal reputation score which can be used as selection criteria e.g. you can elect to only meet people w/ a high reputation.

Since the solution is not specifically dating related, reputation scores can be made available (via API) to other sites. Existing reputation solutions are principally based upon Twitter followers/retweet activity e.g. Klout, Peerindex or Tweetreach. This allows those that don't use Twitter to compete online. Since it is more personal than tweeting, it is also potentially a more accurate reputational assessment for other sites to use e.g. when offering deals. Wider reputation usage helps drive traffic and because it is solution specific – makes replication by competitors difficult.

The solution described above addresses the online dating problems in the following ways:

  1. Maintain a separate/proprietary profile.
    1. Solution uses Facebook Connect to enable one-click login. Truncated versions of people's Facebook profiles also become their dating profiles. It is not a Facebook app and no-one can see whether you use it or not. People are already using Facebook to flirt and this solution extends that but removes the bad etiquette associated w/ trawling for dates.
  2. Periodically check to see if there are people to contact/someone has contacted them.
    1. Solution saves time. Trawling through online dating sites to find (pull [rather than push]) someone interesting to you is time-consuming. Push model enables solution to work around your schedule. Increased efficiency e.g. people can email each other for weeks but only really know whether they connect after a few minutes conversation. Makes the whole experience low expectation (good for first dates).
  3. Deal w/ communication awkwardness.
    1. Relying on the mutual knowledge aspect of mutual thumb-ups e.g. I know that you don't know that I thumb-upped you unless you thumb-up me - would remove much communication awkwardness.
  4. Determine the best way to leave if they don't click w/ the other person.
    1. Meetings are for five minutes only. After five-minutes, an alarm would sound through both phones. Timing starts once both people's phones are in immediate proximity to each other (to handle one/both people being late to the meeting).
  5. Pay on a subscription basis.
    1. Solution is w/out cost (clearly a winner). Barrier to entry/profile quality issues are partially addressed by the reputation score.
  6. Deal w/ incomplete information.
    1. Through the reputation score.
  7. Handle remaining social stigma among peers (despite relaxing recently).
    1. Solution is not specifically a dating solution. Even people that don't want to date may be interested as it enables them to opportunistically and simply meet new and interesting people or discuss specific topics w/out planning in advance.
      1. People's lives are increasingly scheduled and many are drawn to the idea of occasional "curve balls".
      2. Can offer beforehand to buy someone a coffee if they are able to discuss a particular issue from a position of experience e.g. rearing a puppy, fixing a computer, getting into a particular industry or continuing online questions from Q&A sites e.g. Quora. This could also work for sales e.g. you get a free coffee if you sit through a five minute pitch.
        1. Similar to Facebook Like button, a "Meet" button could be federated to other sites to indicate a willingness to discuss a particular topic.
    2. Since it is based around your schedule i.e. whether you are physically close enough to meet there is less dating investment enabling it to be treated casually.
    3. The time-box nature makes it more akin to speed dating which inherently carries less social stigma than online dating.
  8. Infer second degree social graphing.
    1. Through Facebook social graph. This has a freely available API.
  9. Cancel their account after a few successful dates.
    1. The solution moves on from scheduling that initial coffee shop date to bars for successive dates to theatre/film scheduling for later dates. Even years after two people have got together through the solution, they could still use the solution as a proximity meeting facilitator.
  10. Work w/ poor, non-existent or additionally paid for mobile versions of sites.
    1. Solution uses location awareness on exception basis (push)/much more simplified than current mobile dating sites (basically simplified versions of web sites). Conversation topics based on mutual interests could also be suggested seconds before you meet. It is the only access point to the service and free.

The solution would certainly be open to abuse. People are travelling five minutes for a five minute meeting. They can set filters to ensure the solution just pushes meets that they want and if it's apparent that the person is disingenuous - they leave after one minute (total six minutes wasted) then leave poor feedback or report/block the person - similar to email spam. It should actually be easier to control than email spam since you can leave poor feedback/report the person. It's true you have potentially wasted 5-10 minutes of your life though (w/ email spam it will be seconds to read the email). Then again consider risk/reward: W/ email you risk minutes/day w/ spam against the reward of instant written communication anywhere in the world. W/ mobile dating (or meeting), you risk 5-10 minutes against the reward of meeting someone cool/learning something new. People are already risking 22 minutes every time they visit an on-line dating site to meet someone cool (and unable to multi-task), so it could be posited as a time saving.

Following on from our high-level design, some detail on how to potentially realise it. Starting with - how might it make money? It would always be free to use but development cost should be able to be offset in short-term:

  1. Short-term. Affiliate marketing would be impacted due to the "proximity/push" model i.e. people are not regularly hitting a specific site w/ which to see ads.
    1. Small, targeted ads would need to be embedded and cycled w/in the mobile app and shown when date messages are pushed. The option for a paid version of the mobile app could remove those ads e.g. the Angry Birds model.
    2. There is a trend for free online dating sites to be launched to great press (focussing on some minor innovative angle) and then closing down several months later e.g. Thread (FOAF), CrazyBlindDate (randomness). Likealittle (flirty commenting) has only recently been launched and received 1M uniques in first month (reportedly 20M page views). Conservatively taking uniques and using the Amazon Affiliate program, this would have generated $10,000 affiliate revenue (assume 1% click-through rate on average price $10). On page views this would have been $200,000.
    3. Online donations e.g. through Flattr can generate a surprising amount of income e.g. Flattr reportedly kept WikiLeaks afloat for a period.
  2. Medium-term. Assuming the solution successfully transcends short-term "viral effect", the amount of active registered users dictates revenue.
    1. Plenty Of Fish for example, reportedly makes $30/registration and £10M annually through affiliate advertising. This is on 250,000 uniques each day.
    2. Once the concept is proven, it could pivot to become a back-end service (accessible via API) for other dating sites i.e. they provide their own user experience and value adds e.g. specialist matching algorithms, niche markets. The solution would handle Facebook integration, tracking, messaging, rating/feedback and meeting handling. The solution becomes a natural monopoly (due to network effects) that future dating sites need as daters expect it. It could conservatively be licensed to the top-50 dating sites for $500/month ($300,000/year).
    3. Equivalent services/outlets available around the interim point e.g. coffee shops/bars can compete for business w/ the solution paying the solution for "referrals".
  3. Longer-term. A working solution would be attractive to acquisition.
    1. Facebook may see it as a way to extend its brand - moving out of the digital world into the physical world/gaining deeper social data.
    2. Coffee shops e.g. Starbucks may simply see the solution as a means to drive sales (interim coffee shop meeting points). Starbucks are keen to develop their loyalty programme e.g. they recently partnered w/ foursquare to unlock a "Barista badge".
    3. Location-aware apps e.g. foursquare may view it as a way to extend the short-term conceit of checking-in/obtaining badges etc.
    4. Other dating solutions may find it attractive to compete/diversify (much like Match tried to compete at the free end w/ Plenty of Fish by releasing Down To Earth.
    5. Personal assistants e.g. Siri may see it as complementary.

What competition is there?

There is a much competition. Some solutions solve some of the problems above but none solve all of them and none have the proximity/push cornerstone approach supported by a speed dating assistant:

  1. Classic online dating sites e.g. Match, eHarmony and Plenty of fish.
    1. Market is fragmented/specialized e.g. 50+, Jewish, European (Meetic) etc. at the lower/start-up end.
  2. Local speed dating outfits that also have an online presence e.g. SpeedDater.
  3. Dating Facebook applications e.g. Zoosk and Flirtable.
  4. Dating sites that use Facebook social context e.g. AreYouInterested.comDateBuzz, SpeedDate.com and Chemistry.com.
    1. DateBuzz has gained press for its innovative use of letting daters rate other dater's profiles. Profiles provide a fraction of the detail gained from even a five minute meeting though and are open to gaming/deception. Also, there is a case to be made for saying that daters don't actually know what they want until they experience it.
  5. Friend locators e.g. Facebook Places, Google Latitude and face2face.
    1. Facebook Places is geared toward friends/checking-in much like Gowalla or foursquare. Latitude is more organic in that it simply tracks you and allows you to see other friends. Both Facebook and Google are unlikely to provide direct online dating support themselves in order to protect their brand but it is conceivable.
  6. Mobile dating apps that use location awareness e.g. Grindr, Skout, Flirtomatic and MeetMoi.
    1. Grindr is very niche. MeetMoi is more general. Neither have speed date assistant capabilities e.g. interim coffee-shop scheduling, strict date timing and reputation scoring. Both also require proprietary profiles.
    2. Skout and Flirtomatic use Facebook profiles and are probably closest to the solution however they hamstrings themselves by focussing on chatting w/ others in your location rather than proactively scheduling a meet with them while it is possible (they may only be there for a few minutes). You can chat anywhere. Geo-location only becomes useful to online dating once the opportunistic meeting element is introduced.
    3. This approach is widespread in China although this is done on older technology e.g. many Chinese wireless service providers offer dating services based upon signal triangulation to drive text message usage.
  7. Sites that use scientific matching foundations e.g. ScientificMatch and GenePartner.
    1. These two actually use DNA comparison. While this may be more accurate than proprietary matching algorithms, it is still reliant on matching rather than chemistry and chance. Cost too is prohibitive for now.

To sum-up, a mobile dating solution (essentially: Social + Mobile + Speed dating) bought to market now could earn distinct competitive advantage if the social adoption question could be resolved:

  1. Market. Online dating in general is a $1BN global market (some say $4BN), has yearly 10% growth and is known to weather economic storms. Market for free online dating solutions is fragmented. Plenty of Fish is the only one that has a real market (followed by OKCupid) yet the paid market is market is shrinking. This solution is wider than online dating; effectively creating a new market – proximity meeting enablement.
  2. Innovation. Online dating solutions have yet to capitalize on mobile and (to a lesser extent) social. W/ smart-phones set to be ubiquitous, this is a clear opportunity for innovation. The infrastructure/audience for geo-location in particular is there but wasted on games e.g. earning badges/becoming mayor etc. Mobile usage also enables new approaches to online dating. In particular, the opportunistic proximity/push feature is a clear differentiator. Ultimately though, the innovation here is - to handle the ten problems w/ current online dating slightly better than everyone else. It is this that gives the solution a real chance of progressing past being a short-term trend to become a brand.
  3. Risk/Reward. Roughly six weeks to build onshore on Android (assuming design completed) and cost around $35,000 to get a first release out from good developer. Refine app (assume 80 hours costing additional $8,000). Releasing a beta then would cost roughly $51,600 ($35,000 + $8,000 + 20% contingency). Plenty of Fish is reportedly mostly a one-man band. Development cost could be offset by combination of affiliate advertising/ad-free payments and donation w/in 3-6 months. A separate upper limit estimate for total cost (complex Android app) is $80,166. If the solution took just 10% of Plenty of fish business, this is £1M/year revenue on low overheads. Finally, there are clear approaches to extend solution functionality and acquisition from several varied sources would be possible.

Ultimately, this solution could potentially create an important new communication channel while addressing the online dating problem. By far, the biggest question is simply whether people (particularly women) would adopt the concept of having meetings (dates) proactively scheduled for them on-the-fly as they go about their lives. Conversely, there is a sort of chance/synchronicity element that they might consider romantic while men might be drawn more to the time saving/efficiency angle. As no-one has really done anything like this before, no-one can say. What can be said though is that it isn't a huge investment to find out and like many of the dates that would be pushed to your mobile; it is probably worth checking-out.

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