BC Business
Few folks know more about online dating than Mark Brooks. Perhaps not from personal experience—he’s married—but rather when it comes to the business side. Brooks has been tracking the online dating industry for over a decade, and these days runs New York-based Courtland Brooks, a consultancy focused on this niche sector. He’s advised many dating sites in the past, including Vancouver’s own PlentyOfFish (POF).
POF remains one of the world’s most popular dating websites, but as users flock to mobile en masse, the ground beneath the industry’s biggest players is shifting fast. I spoke with Mark about where online dating is headed, and the challenges and opportunities that lay in wait for POF and its CEO, Markus Frind.
These days, people set up dates on their phones, not computers. Are you surprised how quickly that shift happened? The writing’s been on the wall for quite some while, but I still get the impression that the shift toward mobile has really caught people off-guard, caught Internet dating executives just a little bit off-guard. It’s really been very, very quick, but long overdue.
The problem with mobile, though, in terms of making money, is that it’s not conducive to advertising, which accounts for a lot of POF’s revenue. How does POF keep its revenue stream in shape as desktop traffic dwindles? They incrementally change their paywall. At what stage do they charge for use? You have to pick what you charge for. Look at Craigslist. Most people think of Craigslist as entirely free, and it is except for people who want to advertise jobs, and they make a lot of money from that. That’s the same sort of principle that PlentyOfFish tries to observe. They do take money, they have memberships and they’ve experimented with a few things over the years. And they have to now experiment again to find a paywall that makes sense for their metrics. Markus knows this is a game of scale, so he’s investing in the future. He has to, and he has to beat some behemoths. He has to beat Match.com—and that’s no small task.
PlentyOfFish is a small company—80 people. IAC, which owns Match.com, OkCupid and Tinder, is 4,000. Can Markus compete? I worked with Markus for some years and the angle that we took was that it was David and Goliath. Markus was David, working out of his apartment, and Goliath was Match.com. But there was another David, Sam Yagan. He ran a site that, in terms of revenue and traffic, was far, far smaller than PlentyOfFish. But the David to Markus is now the Goliath (Yagan sold OkCupid to IAC in 2011 and became Match.com’s new CEO). I don’t think we would have quite predicted that.
This is a game of war chests and right now Match.com has a far larger war chest and far larger resources, so I’m a little worried for PlentyOfFish. I’ve great admiration for Markus and he does fight the good fight, but he’s not going to have the war chest that Sam has. He needs to show that he can get better results than Match.com. I’d say that’s the most important thing for him at this stage, and that’s a word-of-mouth thing. People seem to be voting quite well, because he’s continuing to get usage.
That’s a good story—this rivalry between Markus and Sam. I believe those two are two peas in a pod. They’re both very analytical. I actually witnessed the first time they met. It was like two lions circling each other at an Internet dating conference. They’re both, well, they are both a little quirky. They managed to strike up a conversation and I just kind of felt like I was… that they’re both… I think they’re both avid competitors.