Online Dating Was Hailed as a Simple Path to Love. So, What Went Wrong?

Dating apps and sites are a profitable venture for some. Annette Shaff/Shutterstock.com

Dating apps and sites were supposed to usher in a quick and easy way to find a match. Whether looking for a lifelong mate or a quick fling, many understood that swiping left and right could help save us from the banalities and dangers of the traditional dating circuit.

But what has happened to this promised dating utopia? It turns out that it has become a fractured market in which everyone seem to belong to a different service and users spend more time surfing for matches than they would trolling the local bar scene.

“It’s a very slow, laborious process that no one has time for,” says Avi Kahan, co-founder of new dating app InviteUp.

Yet love is a profitable business, for some. It is predicted that dating sites in the U.S. will generate $1.17 billion in revenue this year. Dating apps are expected to rake in $628.8 million this year, up from $572 million in 2014, according to an IBISWorld report. There are more than 500 apps available, with a critical mass of users on Apple’s iTunes store.

“Online dating sites have a low level of capital investment and typically only require purchasing a domain name, web hosting, a computer and related equipment,” says the report. “Labor requirements are low, as well, since the majority of online dating sites can be managed with only one employee.

“The number of entrants to the industry has increased throughout the past five years despite consolidation from the industry’s largest players. This has led to a high level of competition within the industry.”

But, let’s be clear: just because there is a plethora (some may say glut) of apps on the market, does not mean we are getting what we want.

“What would happen is I would spend all this time and I would think I would have a connection with someone, but then you meet in person and whatever ‘it’ is, wasn’t there,” Kahan says of his past dating experiences. He is currently in a relationship.

That elusive “it” is causing some apps to take a more personalized approach to dating than just the quick click or swipe, and with good cause. New data suggests that the proliferation of dating apps may be to blame for a steep rise in sexually transmitted diseases. A survey conducted by the Rhode Island State Department of Health revealed that from 2013 to 2014, cases of syphilis rose by 79 percent, gonorrhea by 30 percent and HIV by almost 33 percent.

Dr. Rosemary Gillespie, chief executive at the UK-based Terrence Higgins Trust, says dating apps should play a larger role in warning users of the dangers associated with unsafe sex.
“Dating apps have given people more opportunities to meet potential partners than ever before,” she says.

While plenty of dating apps allow you to scour the city for a date, some entrepreneurs realize that many users want to look even bit closer to home. Privately funded InviteUp aids Los Angeles users in arranging dates in their own part of town, helping them avoid arduous treks in L.A.’s notorious traffic, where a crosstown commute for a potential relationship is a likely dealbreaker.

“You can assess for yourself how far away you want to look,” says Kahan.

That includes which neighborhoods you want to look in, as well: Bel Air, Holmby Hills, Pacific Palisades or Venice Beach, if you’re into the tattooed surfer type.

The app is built around users offering up experiences, rather than lengthy back-and-forths online. “What we’re trying to do is to [allow people to] not spend so much time on your cell phone,” says Kahn. “What we’re trying to do is save you some time in the online world.”

The world of Internet dating has become so crowded and complex that some people are willing revert back to the olden days of the flesh-and-blood matchmaker. But this isn’t about your mom setting you up with her church friend’s son. On the contrary, today’s intermediary has evolved to keep up with the times. Take Talia Goldstein, founder and CEO of Three Day Rule (TDR), for instance. Goldstein is using technology to narrow down the dating pool, but leaving it up to matchmakers to do the dirty work for their clients.

The business was founded in Los Angeles but also has matchmakers in the San Francisco Bay Area, New York City, Chicago, Boston and Washington, D.C. You may have seen the company featured on the ABC television show Shark Tank, which sees entrepreneurs pitch their business ideas to industry executives. It wasn’t selected to be funded but that didn’t stop Goldstein from pursuing the idea.

The online dating market has become fractured. Eugenio Marongiu/Shutterstock.com

The online dating market has become fractured. Eugenio Marongiu/Shutterstock.com

TDR is a female-led and -driven company, a rarity in the online dating businesses, Goldstein says. The company’s matchmakers solicit and vet clients and their potential dates. Many of them have forsaken high-profile corporate careers at Fortune 500 companies and hold degrees from some of the nation’s most prestigious schools.

“I noticed my clients often have a ‘type,’” Goldstein adds.

And flowing from the idea that people looking for love have a certain “type” in mind, she decided to incorporate an algorithm into her mobile recruiting platform, which helps to analyze photographs in search of a particular look. “Attractive means something different to everyone,” she says, “but if I saw pictures of their exes, they’d look the same. It was all in the face structure.”

Goldstein’s algorithm takes images of her client’s exes (not in a stalky way, relax) to help her matchmakers pinpoint similar detailed facial characteristics that a person looking for love may not notice or realize they prefer, but which a computer definitely does. Combined with other important partnership qualities—career, family and religion among them—it makes for a unique way to match people up.

Still, investors don’t have a lot faith that dating apps will generate enough revenue. When the goal of users is to find a partner and then quit the app, it becomes hard to sustain long-term users.

“There’s a large swath of angels/funds who categorically refuse to invest in the dating category in the same way that many refuse to invest in games, hardware, gambling,” Andrew Chen, a startup adviser and former venture capitalist in the San Francisco Bay Area, is quoted as saying in the Wall Street Journal. “It’s an uphill battle for dating apps to attract interest.”

To that end, Kahan is not planning to monetize with subscriptions but, instead, by selling of information to advertisers. Your information, specifically. His service tracks where users are going on dates and what activity they’re engaging in—a valuable bit of information missing from some of the bigger names in the online dating industry.

“They don’t know where you’re going and what you’re doing,” says Kahan.

That seems a little bit creepy, doesn’t it? But think about it: Haven’t you already given your dating site the most personal details about yourself? Is there anyone who knows you more intimately than your .com dating site? And if so, is there any chance that person is A) single and B) still at all possibly interested in you?

The point is that you’ve already given so much of your privacy to dating companies, telling them all about your interests, hobbies, turn-ons, etc. What’s a few more details, the argument goes. And what if those new details are able to increase your chances of finding the “right” person.

But who’s posting? Is it the men? Is it the women? Maybe it depends on where you’re going for the date.

“We’re still too early in our marketing efforts to fully answer the question,” Kahan says, but thus far, it appears “that men and women actually post equally.”

The app is also trying to address one of the common complaints date site-users encounter: urgency. Suppose you don’t want to wait for the weekend, you’ve got the itch now (OK, bad choice of words given the STD information from earlier). You’re in a hurry, let’s say. You want to go out tonight. Kahan’s app, much like the popular Tinder, allows users to find out what’s happening now.

“If I want a date tonight, there isn’t really great app out there for me to use that I can get a date quickly,” he says.

Now if this just sounds like an easy way for attractive people to score a free dinner, you’re right. But as Kahan points out, “they always could, right?”

Touché.

But while the app shows some promise, it has a hurdle to clear. It is, of course, the same hurdle than all dating sites and apps come across—you’ve got to have enough people.

“I think the problem is getting to the local critical mass that makes the app viable.”

Because if you don’t refresh the dating pool with new bodies, er, people, now and then, it starts to get rather stale.