Have you ever gone on a date that you wish had never happened in the first place? “I’ve gone on so many dates that were a complete waste of time,” says Sydnie Ho, a teacher who recently began using dating apps again. “People tend to overstate or just straight up lie about their looks, accomplishments, jobs, hobbies and even relationship status. It’s really hard to find someone who’s authentic and caters to your needs.”
In a world full of potential partners and dating apps, how does one set the record straight?
Meet M8, the dating app that puts trust at the core of its business model. The concept, for consumers, is simple. M8 is based on real-life friend endorsements and introductions that provide a human element to the dating platform, allowing those who are matched to have better insight into potential compatibility and common ground.
“If you think about it, this is the way the world works. It’s all about who you know, trust, recommend and introduce,” says Stephen Liu, CEO and founder of M8. “We do it for business, but why not love?”
How do dating apps make money? The global online dating industry is worth $1.383 billion today, with 42.2 percent of users aged between 25-34 in 2017, and numbers are set to grow to an estimated 331.3 million users by 2022. Dating app users in the U.S. alone are estimated to rise from 25.7 million in 2018 to 36.1 million in 2022. While most dating apps start as a free service for consumers, these apps are starting to experiment with various revenue streams with more users, features and advertising opportunities.
Let’s take a look at the original swiping app that revolutionized online dating: Tinder. This app alone produces 1.2 billion profile views a day and creates 15 million matches. The dating app is on track to double its revenue from last year and is expected to exceed $800 million in 2018. With ads only making up 5 percent of its revenue stream, Tinder has found success by enticing more than 3.8 million people to subscribe to Tinder Premium or Tinder Gold, and had a growth rate of 81 percent in the past quarter.
“It’s all about who you know, trust, recommend and introduce. We do it for business, but why not love?”
Other dating apps have also begun incorporating a subscription model. “M8 is currently on a freemium subscription model,” says Liu. “You’re free to play matchmaker, and you can also receive matches from matchmakers, but for matches generated by M8, there will be a monthly subscription fee.” In addition to the monthly subscription fee, M8 is also launching a concierge membership that allows matches to get creative on their dates. Also, by incorporating two user trackers—a dater and a matchmaker—M8 invites more users to engage on their platform and is able to find more avenues for monetization.
Even Facebook is entering the world of online dating: CEO Mark Zuckerberg stated in May that for the 200 million Facebook users who have set their relationship status as single, they will have an additional dating profile feature on the platform in the near future. Aptly named Facebook Dating, the world’s largest social network plans to foster more meaningful relationships and encounters through their platform.
“Creating M8 is probably one of the most difficult things I’ve ever had to do,” says Liu. “There are a lot of things that have to come together to make a successful app, and it needs a variety of people with vastly different skillsets.” Liu started the dating app with his wife, Linda. The two began dating after an introduction made by a mutual friend and eventually got married. “My buddy Teddy arranged our meeting, but what was more important was that Teddy vouched for me,” recalls Liu. “Apparently between appletinis two and three, Teddy asked Linda what she thought of me, and she responded that I wasn’t really her type! But thanks to his recommendation, Linda and I are now married and have a 3-year-old son named Kingston.”
While the online dating scene is currently red-hot with business opportunities, competition is fierce and the market is highly saturated. In order to have a dating app that stands out, the idea and concept must be different from other apps. Take Bumble, for example—it’s a dating app that empowers women to start the conversation in heterosexual matches and make the first move. The app is just under 4 years old, but given its feminist values, the company announced just last month that it launched Bumble Fund, a fund focused on investing in female-founded and female-led businesses. The app also has various branches beyond dating, such as Bumble Bizz, which allows users to connect for a business agenda, and Bumble BFF, for those simply wanting to make a new friend.
“Understanding for whom and for what exactly your dating app is designed for will determine the success of your app,” says Trevor LeVieux, principal iOS engineer and lead app developer for TE2. “Get your specs down, and that’ll be the blueprint to help guide and refine your app-building process.”
"Teddy asked Linda what she thought of me, and she responded that I wasn’t really her type! But thanks to his recommendation, Linda and I are now married and have a 3-year-old son named Kingston."
For M8, while they had a strong vision for the purpose and demographic for their app, there was a steep learning curve. “Being a bootstrapped startup, we did not have all the required skillsets in the house,” says Liu. “When we ultimately decided on a two-user architecture, one geared for the daters and the other towards matchmakers, we had to put in a lot of work behind product strategy, design thinking and engineering architecture.” Building an app is not easy work, as developers must understand everything from the differences between iOS and Android setups, to choosing the best API implementation strategy. “Combining expertise is really important to build a successful app,” says LeVieux. “I’m a developer, but depending on what kind of app I’m building, I would need a solid team that consists of everyone from a user interface designer, to a music composer.” While the dual-user system may not look like much, creating a unique wireframe design for the concept and rolling out various prototypes took much longer than Liu had anticipated.
“If you don’t code yourself, I would first convince a technical co-founder to develop the first version of the app on equity,” says Liu. “Also, unless someone is willing to write a large lump sum check upfront, it’s virtually impossible to avoid outsourced contractors. Choose these people very carefully, and don’t go after the cheapest one, since you’ll likely end up paying much more in the long run.”
Despite the fact that online dating today is a relatively mature market with a wide level of social acceptance, business opportunities continue to exist. Online dating has adapted to the needs of a variety of people seeking various committal (or non-committal) encounters. Big hitters in the online dating industry such as Match Group, Bumble, The League, Zoosk and eHarmony are further diversifying their service features, interactivity options and connectivity. It seems the trend is for dating apps both old and new to keep churning out dating formulas, algorithms and rules that will generate the best results.
LeVieux, who recently met his girlfriend on Bumble, agrees. “As long as people continue to have limited free time, dating apps, meetups and online dating are going to stay relevant in how we meet other people,” he says.
As for M8, Liu is a strong believer in his app’s vision, purpose and formula. “The thing is, a vast majority of couples today still prefer to meet through people they know,” he says. “So, by combining the best of modern online dating and old-fashioned matchmaking, your shot at love is sure to be higher.”