An Analysis of the Online Dating Industry and how Startups Can Compete

Martin Wendel & Emil Maltesen Frandsen

Student thesis: Master thesis


Many new dating sites are started each year but few become a success. This paper provides an analysis, evaluation and recommendations for startups seeking to enter and compete the online dating industry. Methods of analysis include an industry analysis of the general online dating industry, further investigation of 35 of the major dating sites as well as five in-depth case studies. The cases studied were Match, PlentyofFish, Ashley Madison, Tinder and the Dating Ring. A ranking of the most popular dating sites is found in the appendix. We found that each dating site had individual and unique concepts as well as a particular market focus. This led us to identify that each site could be placed in a quadrant within a framework we developed. The X-axis is the market focus: (X1) Mainstream or (X2) Niche and the Y-axis is the concept differentiation (Y1) Generic or (Y2) Unique. While individual dating sites had different strategies for creating their user base as well as maintaining it, certain properties would match each other in relation to the sites in their quadrant. Reputation was found to be extremely important and word of mouth, both positive and negative, helped each of the cases studied grow. The biggest differentiator in their strategy was the time in which they launched. The paper discovered several similarities of successful startups. Most notably the most recent launched had a new strategy to deal with creating and maintaining their users. They also focused on unique concepts as well as a niche market focus. Finally, their choice of revenue model was for most part heavily in favor of freemium with the exception of the few sites who chose a full subscription model by manipulating the network intensity and appealing to a wealthy segment. In the last part of the paper we make recommendations for startups that increase the chance of success: (1) Keep an eye out for market vulnerabilities and take advantage of them, (2) consider designing the concept to decrease the network intensity so the size of the user base is less problematic, (3) by focusing on a niche, a startup can create a submarket and deliver higher value to that specific target group, (4) innovate on the core concept of dating to differentiate from existing sites and gain high word of mouth engagement, (5) screen or verify new members and prevent spamming, (6) focus on nurturing trust and credibility by following the eight drivers of trust and (7) attract customers by offering free initial access and introduce freemium inspired revenue models after reaching critical mass. By following the seven recommendations, startups increase their chances to successfully enter and compete in the online dating industry.

EducationsMSc in Business Administration and Information Systems, (Graduate Programme) Final Thesis
Publication date2015
Number of pages142