Dating apps/business model
03 jan 2018
A human is a unity of the two forces, yin and yang, male and female, and these forces set in motion the whole life. A human always needs to have a couple, which will accompany his/her life for better or worse, lend a helping hand in a tricky situation, dive in when his couple drowns. A couple is a man or a woman, who harmonizes with the forces of his partner, his yin and yang in order to prosper side by side.
Nowadays, there is a wide variety of different methods and ways to find a couple.No, we are not telling about the “out-of-date” way to visit cafes, restaurants purposely to find a couple (though, it still works!), we are about modern ways, to which the world is more addicted - dating sites and mobile applications.
Today, the whole world is a giant web, where people talk to each other, chat, and even settle business negotiations without a personal meeting. Dating is not an exception. In fact, the web helped people meet since 1995, but the mobile revolution helped millions of single people to find a special one by dint of a swipe of a finger.
There are different applications with diverse sets of functionality, among which, there are applications for youngsters, adults, and sexual minorities. But that does not mean all mobile applications are created equal. Each and every application was developed according to a certain business plan and idea, the consequent effect of which is a functional platform of the application.
Let us represent the most popular dating apps for today: Tinder, OkCupid, Coffee Meets Bagel, Hinge, Tastebuds, Match.com, Bumble, Grindr, and many others. Some of these brands are doing well with their software, but a few still need improvement.
It is not a surprise, that in a society, where dating apps are extremely popular, consumers have exalted expectations when it comes to privacy, security, and usability of a product. If the brand can manage to advance beyond the basic set of functionality and create a “candy”, it will have a real opportunity to make a significant leap either in market share or in mindshare.
Let us continue with popular applications and their brief description.
Hinge gained prestige thanking the innovative ideas and their implementation. Hinge serves as an extended social network with an eye-candy design, and it presents the user a dozen matches a day to swipe yes or no.
Once, Tinder was a sensation and set off the dating application craze. The application has a convenient iconic interface with a feature of swiping yes or no on a range of potential dates and has a special feature called a “Super Like”. In addition, after an update, your personal information about your job and education is now placed on the front of your profile.
Grindr quickly made a colossal success among gay guys. Its goal is to help guys meet up wherever they were in a matter of time.
Current app works same as Tinder in the sense of swiping yes or no in a range of matches. The peculiarity of the application is that women are the ones to message first. This feature provides protection for women from being attacked with unfavorable messages from men.
Coffee Meets Bagel.
Coffee Meets Bagel does not show a row of potential datings, instead, it shows few matches a day, and it is aimed at a more balanced experience. This app is not about furious swiping yes or no, or rating photos, it is about a few quality matches a day.
Ok, Cupid, find my couple!
The current app is built as a complete and comprehensive social network. It has a convenient interface and a set of functions. To find a certain one, you will have to answer a series of questions, which will determine the percentage of you matching someone. OkCupid works much the same as Tinder by means of swiping yes or no to people around you.
Match originally was one of the online matchmaking services, and it bills itself as having made the most lasting relationships and marriages. This application is definitely for a serious audience looking for a lasting partner. Available either for iOS or Android.
Of course, there are other niche applications for dating, which are quite similar to Tinder or Hinge. As you can see, the dating applications market is oversaturated with different solutions matching different audiences, but those solutions lack outstanding peculiarities, and the situation can be changed for better by a brand new product.
Let us consider building a piping hot dating application.
To start with, it would be right to highlight, that mobile application development is a probation field with an abundance of opportunities, especially dating apps branch. First and foremost, creating a unique dating app is a good business opportunity. At the moment, the online dating industry sits at about $2,2B dollars average. Taking to account that technology develops and grows, the demographics expands, the online dating industry will continue to grow in the long view.
Starting a business imposes creating and developing a business plan, whether it is an own project or a borrowed one. A business plan or model describes the rationalization of how an organization creates, delivers and collects value.
Essentially, a perfect business model has five stages, which are: Mobilize, Understand, Design, Implement, and Manage, but the sequence of this stages is rarely linear. For example, Understanding and Design stages tend to succeed in parallel. Each process stage has an objective and a focus and they can change when you are working with your business model.
The first stage, Mobilize, means framing and estimating your project’s objectives, preliminary ideas, and assembling the team.
After the first step is done, it is necessary to Understand. It means, that YOU and your team must immerse yourselves in a pertinent knowledge: your potential customers, technology, and the environment. Gather information, interview professionals, and experts, study customers requirements, analyze this information and identify the needs and problems.
For example, you are interested in creating the application for young people searching for a couple. Do not hesitate, ask for an interview those people, who made success in dating app industry. In most occasions, their advice will not be free, but don't get frustrated, because the information they can give might be vital for your business. Remember, that if you want to earn, you must invest. Study your audience: what are youngsters interested in, what applications do they use and why, what would they want to be improved, added or deleted from applications. Even the most flimsy detail can serve as a field for experiments, so do not eliminate minor items in your analysis.
Proceed to the next phase, which is Design.
Since the Understand stage, you have got loads of information and ideas, which now should be transformed into business model prototypes, which can be tested and explored. After an intensive inquiry, select the most satisfactory and prospective business model design. Do not fall in love with the ideas too quickly, have an open mind. An expansive thinking is a critical success factor in this stage.
Develop a narrative for experts and prospective clients and seek a feedback from them. The comments might create roadblocks for your model, but should not be considered as showstoppers.
During the process of testing a model, you can face new ideas, which may help you in enhancement and improvement of your model. Do not eliminate ideas! Test them!
The Manage stage includes constant assessing the model and scanning the environment in order to understand how it can be affected by external factors in a long-term perspective. Remember, that rethinking and improvement of the organization’s model concern every employee.
Develop your revenue and award structure. It might appear a big challenge for a company without a strong brand awareness because you will generally turn to paid acquisition channels in order to find prospective customers. This turns into a tricky situation because the more you pay to acquire a customer, the more you will have to generate income from them. What is the best way to monetize a dating application? There is no clear-cut answer to this question.
Choosing the right monetization pattern for your dating app is almost like searching the certain couple for yourself. Your monetization strategy is fully-customizable, and can even be changed over time in order to adjust to market trends. It is very important to remember, that in the end, it is all about conversions. If you can not convert prospective users into paid members your strategy is not worth a straw.
Income generation of dating applications start from Ads, but it is the least income. Developers imply a unique and personal approach to the monetizing system in their software. Some of the applications offer a paid privacy protection, while the others offer icons, smileys, packs and seasonal offers to their customers.
The most popular business model among the dating apps is the “Freemium model”. The Freemium model implies a free version of an app with a standard set of features and a paid one with all free features plus additional ones.
As an example of a Freemium model, we can represent Tinder. It rolled out a Tinder Plus addon which is a paid version, offering unlimited swipes and an ability to swipe and browse in locations that the users are not currently in. Tinder Plus costs $9.99 per month if you are under 30 years old, and if you are older, then it will cost you $19.99 per month.
Bumble generates revenue by a paid option to “extend” a match for an additional 24 hours. It is quite a creative approach toward the revenue generation.
As to Coffee Meets Bagel, their approach is quite interesting. As we wrote earlier, CMB offers a couple of matches per day. In case both people are interested, they get connected. However, you can also buy another match through the inner currency (beans). You can either donate for beans or earn them by recommending the CMB to another person or engaging with CMB via social media.
OkCupid offers a number of boosts for you to outshine the others, on a paid basis, of course. Some developers use a traditional way to generate income by means of gifting. They let their users buy and send digital roses, chocolates, and even book a cab or a table in a restaurant. For instance, PlentyOfFish let their “upgraded” users buy three gifts each day.
It is not a secret, that Japanese people are fond of different emojis, stickers, and smileys. Social communication application Line, which is extremely popular in Japan, took an opportunity to sell packs of 20-40 emojis for $1.99 and generated $75 million in the very first year of its launch.
It can be considered a flipside coin: one would say that it is dull to buy VIP or premium packs in dating applications and that it is more convenient to visit cafes and restaurants searching for a couple. This person will be partially right, but visiting a restaurant every weekend will not cost you $10 per month, it will turn much more expensive in the end.
As you can see, every unique approach is a very interesting solution for a business model, and it generates income. Due to the fact, that dating app industry grows and develops, it turns clear, that there are loads of variants and schemes of extension.
And last, but not least, the conclusion.
While industries and markets will have winners and losers, it will be interesting to watch the market evolving over the next year or two. Will the leaders stay at the forefront, or maybe an outstandingly new and high-quality application will appear and tear the graphs forever?