(2/2) Online Dating's 2024 Paradox: Underrated Value in Romance, High Potential in Friendship – Paving the Way for Innovative Model & Rapid Growth

Part 2: “Beyond Virtual Profile: Innovations for Safer and Genuine Real-World Encounters"

Disclaimer: This series of articles is designed to offer valuable insights and practical tips for investors and industry leaders navigating the dynamic world of online dating, a sector that has become mainstream and is prominently featured on public stock exchange markets. While extensive in its coverage, this exploration is by no means exhaustive; there's much more to discuss and delve into, so I invite those interested in deeper insights to connect with me for further discussions.

Please note that Agoras and Fortuite are not dating apps.

Preamble to Part 2.

In our initial exploration [Part 1/2 ], we delved into the intricacies and challenges of online dating, particularly its historical connection with adult entertainment—a legacy stigma that still influences perceptions in the financial sector. We highlighted the rampant financial scams and the dire need for authenticity and safety in online dating to foster lasting, meaningful relationships.

At Agoras and Fortuite, we've committed to transcending the limits of traditional entertainment platforms and dating services. Our mission is to create real-life, benevolent environments where individuals feel secure and valued for their true selves. By fostering a sense of belonging and emphasizing deep, meaningful connections, we aim to transform online interactions into enriching real-world experiences. Our approach is not just about making matches but about creating a conducive atmosphere for spontaneous, natural socialization.

In this continuation, we explore innovative approaches and potential solutions for the dating industry to grow and overcome some of the issues that are inherent to its original business model.

We begin by examining the rise of socialization and friendship-focused platforms, which offer refreshing alternatives to swipe-centric culture. Then, we'll delve into new business models that synergize online and offline experiences. By employing advanced matchmaking and AI technologies, such as those we're developing, we can enhance user experiences through cooperative rather than purely competitive business strategies. Lastly, we'll look at the untapped economic potential and market opportunities that lie in affiliate marketing and referral revenue models. These can link socialization platforms, including dating services, paving the way for sustainable growth and creating new avenues for revenue generation.

Let's embark on a journey to transform online dating into a portal for authentic, real-world connections, merging the digital and physical realms to cultivate a more secure and meaningful space for friendship, love, and connection. Join me as we build a mutually beneficial global ecosystem that redefines socialization.

1. Socialization and Friendship-Centric Platforms: A New Challenge to Online Dating?

In today's digital era, the pursuit of connection—a fundamental human need highlighted in Maslow's hierarchy of belonging and love—is increasingly manifesting in a dual sense of hope and desperation, or fun and last recourse.

This section delves into how people are resorting to online platforms, often as a final attempt to fulfill their longing for friendship and love. Answering this demand in a more innovative and comprehensive way may lead to unlocking the trillion-dollar potential of the socialization market.

Traditional dating apps, while widely used, often represent a less-than-ideal solution, marked by frustration, a sense of pathos, and the considerable time investment they demand.

Contrarily, socialization platforms, especially those facilitating activities and interactions beyond mere matchmaking, are emerging as a more desirable and pride-worthy avenue. Here, we explore these contrasting approaches to digital interaction, shedding light on the challenges of traditional dating apps and the promising opportunities presented by evolving social platforms.

A. Romance to friendship: opportunities and risks in the transition

In recent years, dating apps like Tinder have expanded their scope, offering options like "finding friends only," "platonic relationships," or even the ambiguous "still figuring out."

This expansion reflects a logical growing user demand for non-romantic connections when seeing the massive drop in the number of close friendships people have (as shown in the following graph from this [link to the full data ]).

However, such features in a dating app often led to challenges, such as misalignment of intentions. For instance, some users, especially women, find that conversations unexpectedly veer towards explicit topics, leading to disillusionment and discomfort.

Bumble Inc. 's approach with its ‘Bumble For Friends’ (BFF) feature, initially launched during its Nasdaq listing, aimed to create a clearer boundary between dating and friendship-seeking functionalities. Recognizing the need for greater clarity, Bumble during Summer 2023 transitioned BFF into a separate, dedicated app (Link on TechCrunch ). This move is commendable for its intent to supply a distinct space for friendship. However, the retention of the same brand and the swipe interface might not be entirely sufficient. While separating the apps is a step towards clarity, the continued use of a swipe system, which is synonymous with dating apps, could perpetuate the same challenges of misalignment in intentions.

The key risks for users on such platforms include:

1. Wasting lot of time in conversations where there is a mismatch of goals and interests, and
2. The potential danger of in-person meetings with individuals who falsely claim they are seeking platonic relationships.

For the platforms, these risks could lead to a loss of trust and customer renewal.

As noted in the first part of this article, high churn rates are a significant challenge for dating apps, and misalignment in user intentions only worsens this issue.

Furthermore, there is a notable disparity in how dating apps are used across different regions. In Asia, for instance, a significant percentage of users in countries like China and India claim they use dating apps primarily for friendship (respectively 80% and 90%), demonstrating a clear regional difference in user expectations and needs (15% to 20% in occidental regions). This highlights the vast market potential for platforms focused solely on friendship.

These difficulties put leading platforms in the dating app market at risk of losing ground to newcomers. Bumble, for example, has captured a significant market share, particularly among female users, which is crucial given the gender disparity in match demands and acceptances. This shift suggests a growing opportunity for platforms that can more effectively align with user intentions, whether for dating or friendship.

As we consider these developments, it also becomes clear that traditional social platforms are becoming a competition to the dating as increasingly being used for matchmaking, leading to a blend of professional or personal networking and relationship-seeking. This trend calls for a careful examination of the evolving landscape of online socialization and the opportunities it presents for both users and platforms.

B. Blurred Lines: When mainstream social platforms unintentionally foster romance

In an intriguing shift, mainstream social platforms have become the new frontier for romantic pursuits, inadvertently competing with traditional dating apps. Platforms like Meetup , Nextdoor , Friender , LinkedIn , the giant Facebook , and many more, originally designed for fostering community and friendship, are increasingly witnessing users leveraging them to find romantic partners.

This trend reflects a broader search for more organic and less transactional means to form intimate connections.

This phenomenon raises questions about the underlying motivations. Is it a:

1. Sign of desperation,
2. A response to the unsatisfying experiences on dating apps, or
3. Simply a cost-effective strategy?

Users disillusioned with the superficiality and transactional nature of dating apps might find solace in these platforms, which offer a semblance of normalcy and authenticity in building connections.

Yet, it is far from the magic of fortuitous encounters...

Facebook's foray into the dating arena, with the launch of its free dating feature in 2019, exemplifies how even the largest social platforms are recognizing the potential of facilitating romantic connections. Not yet embraced by a large public, this development poses a significant challenge to traditional dating apps, as it offers users a familiar environment combined with the vast user base of Facebook. This integration blurs the lines further between social networking and dating, offering a convenient and potentially more accessible platform for romantic pursuits.

But using mainstream social platforms, even like LinkedIn, for dating introduces several risks, including fraud (as I showed in the first part of this article [Part 1/2 ]—in the billion-dollar range just in the USA) and privacy concerns. Talking about LinkedIn which is a platform for professional networking, it is a great demonstration of my say as it is increasingly witnessing cases where users receive connection requests or messages that are romantically inclined or outright scams (LinkedIn-Scams ). These instances highlight the challenges of keeping professional or personal boundaries on platforms not initially designed for dating.

In response to these challenges, dating apps that prioritize authenticity and effective moderation could gain a competitive edge.

Users seeking meaningful connections might prefer platforms that offer clarity and security, valuing their time and emotional investment.

This could lead to a market shift favoring dating services that can provide a safer and more genuine experience.

These trends highlight the critical importance of customer retention and long-term business viability in the dating service industry, particularly as users navigate the evolving landscape of online socialization and dating on mainstream socialization platforms that have far more reasons to keep customers on them for an extended period of time.

C. The Customer Retention Paradox: balancing success in dating and friendship platforms

In the intricate world of online dating and socialization platforms, the challenge of customer retention stands as a paradoxical cornerstone. This unique situation arises where successful matchmaking in dating apps often results in user churn, contrasting with friendship platforms where sustained engagement is the key to success. Therefore, the temptation for dating businesses to merge with or buy mainstream socialization platforms as a way to keep their customers engaged is very high. But for emerging platforms, this presents a conundrum, especially in a market featuring formidable players like Facebook , which extended into the dating sector in 2019. Facebook's entry, while not yet a dominant force in dating, signifies a holistic approach to social platforms, encompassing both romantic and platonic relationships.

The industry's shift, especially in the wake of the COVID-19 pandemic, has been significant. Dr. Caroline West highlights a post-COVID change in dating attitudes, noting an increased openness to different forms of dating. Platforms now face an opportunity to diversify and innovate in response to these evolving social norms.

However, the consolidation seen in the dating industry, akin to multi-brand strategies in the luxury and fashion sectors, brings its own set of challenges. Major players like Bumble Inc. , under Whitney Wolfe Herd 's leadership, strategically acquire apps like 'Official ’ (an app for couples to strengthen their bounds) to cover the entire relationship journey, as detailed in her Fast Company interview. They also risk homogenizing user experiences and stifling innovation. This consolidation trend echoes in the fashion and luxury industries, as previously said, where large conglomerates like LVMH manage a portfolio of distinct brands yet strive to maintain their unique identities. The key is to balance market dominance with the preservation of creativity and cutting-edge solutions.

In this context, startups in the socialization space, while smaller in scale, offer the potential for fresh, innovative approaches.

They represent attractive acquisition targets for larger companies aiming to diversify their offerings and expand their market presence in the socialization market. To extend our investigation a bit broader, the acquisition of Meetup by WeWork for $150 million under Abhishek J. supervision in 2020, a move to integrate socialization into a broader lifestyle concept, perfectly exemplifies this trend and strategy.

Hereafter, you can find a diagram illustrating market consolidation, showcasing how entities like Match Group have aggressively evolved over time, generating many successful exit strategies, like Meetic and its well-known founder Marc Simoncini , who is active in the equivalent of Shark Tank ABC in France, "Qui veut être mon associé ." This last exemple illustrate how investing in dating or in socialization platforms may be an interesting choice in a business angels’ portfolio.

As always there is a risk to catch the wrong fish - You can always ask for more information...

Consolidation in the dating industry has accelerated in the last five years, with a newcomer: the behemoth Facebook, which has the potential to change the game.

Yet, there's an inherent risk in this consolidation: the loss of individuality and the essence of what makes each platform unique and engaging. In such a scenario, the challenge for these platforms is to maintain their distinctiveness and appeal. This consideration is particularly crucial in the realm of customer retention, where clarity, authenticity, and user experience are paramount.

The potential for further market consolidation raises a question about the future landscape of online socialization and dating.

Giants like Meta , with their immense resources and extensive user bases, could potentially outcompete or acquire smaller or even the major dating platforms, reshaping the market dynamics.

The valuable personal data in this sector makes these platforms particularly appealing acquisition targets.

In this competitive environment, the role of startups and smaller platforms becomes even more critical. They bring creativity and innovation, often lacking in larger, more established companies. For investors and industry observers, it's essential to consider these entities not just as acquisition targets but as potential sources of groundbreaking ideas and approaches. Initiatives like the APAD (Alliance Pour l'Amour Durable) from Stanislas de Quercize 's organization which recognizes and awards innovative businesses in the couple social life's business, are testament to the vibrancy and potential of this sector. I strongly suggest you find similar sources in many countries, as we can see similar emergences in many regions, as is always the case when a trend is strong. In an upcoming article, I will give you more information on the different new mainstream socialization platforms that offer their users the opportunity to meet in person.

To conclude on this point, navigating this paradox of customer retention requires a nuanced approach. It's not just about strategic acquisitions or market consolidation; it's also about fostering an environment where innovation, authenticity, and user satisfaction are prioritized.

As the industry moves forward, the potential for innovative partnerships and collaborations might offer a way to balance these competing demands, ensuring long-term success and user engagement.

Now, let’s delve into the potential of strategic commercial partnerships and collaborations in the dating and friendship platform industry, exploring how these alliances can address the challenges of customer retention while fostering a diverse and innovative online socialization environment.

2. Competition vs. Coopetition: Seizing Opportunities through Innovative Collaborations in Socialization Platforms

Here, we will delve into how dating apps and socialization platforms can either compete or cooperate ('coopetition') to better serve user needs. The aim is to investigate how these platforms can collaboratively address the challenges identified in the first part of this article, particularly in enhancing user experience and meeting diverse user expectations.

We will explore potential new business models that could emerge from this coopetition, especially those that leverage technological advancements like AI and the latest ID verification processes to improve match accuracy and build customer trust.

The section will cover how these models can transform the conversion of online connections into meaningful in-person interactions, emphasizing the importance of authenticity and security in these processes for the clients and building passive long-term revenues for the dating platforms.

This exploration will not only highlight the economic challenges but also showcase the creative solutions that can arise when industries overlap and collaborate, marking a new era in the evolution of online socialization and dating platforms.

2. Competition vs. Coopetition: Seizing Opportunities through Innovative Collaborations in Socialization Platforms

In this section, we delve into the dynamics between competition and coopetition among dating apps and socialization platforms. Our aim is to investigate collaborative strategies to enhance user experiences and meet diverse expectations. We'll explore emerging business models, especially those harnessing AI technology to improve match accuracy and trust. This discussion will focus on transforming online connections into meaningful in-person interactions, prioritizing authenticity and security, and building passive long-term revenues for dating platforms. We'll also highlight the creative solutions that emerge when industries collaborate, marking a new era in the evolution of online socialization and dating platforms.

A. Strategic Synergy and Referral Programs: Creating a Win-Win Partnership between Dating and Socializing Platforms

Integrating dating and socializing platforms into a compatible digital ecosystem offers mutual benefits and growth. This symbiotic relationship leverages each platform's strengths to enhance services, customer satisfaction, and profitability.

• Enhanced User Experience and Diversified Services:For Dating Platforms: Collaboration with socializing platforms allows dating services to offer a more comprehensive user experience. Post-match, users can seamlessly transition to platforms focusing on social activities and events, enhancing user retention. For Socializing Platforms: These platforms access an engaged user base. Users finding relationships on dating platforms often seek social activities, which socializing platforms can provide, thereby attracting users ready for engagement.
• Revenue Sharing and Cost-Effective Customer Acquisition:For Dating Platforms: Referring users to socializing platforms opens new revenue streams through lifetime affiliate referral programs, significantly increasing Customer Lifetime Value (CLV) and, for public companies, their market cap. For Socializing Platforms: Access to the extensive customer base of dating platforms drastically reduces Customer Acquisition Costs (CAC), minimizing the need for expensive marketing campaigns.
• Balancing Competition with Collaboration:For Dating Platforms: There is apprehension about introducing users to potentially competing platforms. However, this partnership ensures that socializing platforms complement, rather than compete, with dating services. For Socializing Platforms: Benefiting from the dating platforms' customer base, these platforms must focus on creating events and gatherings centered around friendship and shared interests, clearly differentiating from the dating aspect.

B. Building Trust and Security: Collaborative ID Verification Between Dating and Socializing Platforms

The partnership for robust ID verification between dating and socializing platforms strategically enhances user safety and trust, addressing verification challenges in the dating industry and enriching user experiences.

• Reinforcing Trust and Security in User Interactions:For Dating Platforms: Collaborating with specialized ID verification platforms enhances user trust and safety, reducing fraud and catfishing. This increases the platform's attractiveness and reliability, potentially boosting user spend and reducing chargebacks, thus lowering overall payment processing costs. For Socializing Platforms: These platforms gain recognition as providers of valuable safety-enhancing services, attracting users who value security and authenticity. The platforms must prioritize confidentiality and security to meet and exceed future international regulations, particularly stringent European standards.
• Creating a 'VIP Verification Badge': A Mark of Credibility and Safety:For Both Platforms: Introducing a superior 'VIP Verification Badge' marks a significant step in user verification. This badge signifies thorough verification, enhancing user trust on both platforms, and offering a game-changing approach to user selection and time investment.

C. Enhancing Matchmaking with AI: A New Era of Compatibility Assessment in Dating Platforms

The integration of advanced AI for compatibility assessment marks a significant shift in enhancing user experiences on dating platforms. This approach introduces new revenue models and refines match accuracy.

• AI-Driven Compatibility Diagrams for Deeper Insights:For Dating Platforms: Utilizing third-party AI for compatibility diagrams offers in-depth insights into potential matches without the burden of data storage or processing. This innovative approach, distinct from traditional analysis, improves user satisfaction and engagement. Enhanced Value of Verified Profiles: For Users: ID-verified profiles gain additional value through AI-driven compatibility assessments, assuring users of both authenticity and potential match alignment. For Both Users and Platforms: This AI-driven approach encourages deeper platform engagement, leading to increased user satisfaction, loyalty, and retention.
• New Revenue Model: Selling Compatibility Tokens:For Dating Platforms: 'Compatibility tokens' represent a novel revenue model, allowing users to access detailed compatibility assessments, thereby incentivizing engagement and spending on the platform.

D. Transforming Online Matches into Real-World Experiences Through Event Coordination

Facilitating in-person dates via events organized by socialization platforms enhances the transition from online connections to real-world interactions, introducing new strategies for revenue generation and user engagement.

• Curated Events for Quality and Safety:For Dating Platforms: Collaboration with event-specialized socialization platforms ensures high-quality, safe events, offering a comfortable and enjoyable environment tailored to user preferences. This approach contrasts with the unpredictability of user-generated events (UGE) models.
• Revenue Generation through Payment Processing:For Dating Platforms: Leveraging the platform's payment processing for event reservations creates an efficient revenue stream, simplifies transactions, and opens up new financial opportunities. This model can also encourage financial engagement from non-paying members.
• Addressing Distance Deception and Promoting Authentic Encounters:For Users: Organizing local events through socialization platforms mitigates distance deception and fosters authentic, realistic connections.
• Flexible Socializing Options: A 'No Loss' Experience:For Users: Events offer the flexibility to shift focus from dating to socializing, enhancing the overall experience and reducing social anxiety.
• Building Community and Long-Term Engagement:For Both Platforms: These events cultivate a sense of community, encouraging sustained engagement and fostering stronger bonds among users.

Integrating in-person event coordination into online dating bridges the digital-real-world interaction gap, enhancing connection authenticity and opening new avenues for user engagement and revenue. This approach aligns with modern dating needs, offering a holistic and fulfilling journey in the search for meaningful connections.

Untapped Potential in Dating Industry Partnerships

The potential for partnerships between dating platforms and socialization services is vast, with benefits including significant EBITDA increases for dating companies. I invite decision-makers and investors to discuss these benefits in detail, emphasizing the unexploited economic potential in the dating industry.

Conclusion to Part 2 and the Series

As we wrap up this insightful journey with "Part 2: Beyond Virtual Profile: Innovations for Safer and Genuine Real-World Encounters," we reach not just the end of this article but the culmination of a series that has explored the depths and potentials of online dating and socialization platforms. Throughout this series, we've navigated through the challenges and opportunities, looking at innovative solutions that promise a brighter, more connected future.

As the digital landscape continues to evolve, so too does the economic environment, presenting both challenges and opportunities for startups and established companies alike. In my next series, I will delve into an equally pressing and timely topic: how startups, especially those freshly funded, can safeguard themselves against potential economic downturns, akin to the 1929 crisis, where monetary value fluctuated unpredictably. Such scenarios, unfortunately, seem not too distant in our current times.

But fear not, as there are positive outcomes and solutions to be explored. I'll be sharing insights and strategies from my innovative private banking partners in Geneva, Switzerland, who specialize in securing liquidities and ensuring their accessibility, even in turbulent times. This upcoming discussion is not just about weathering storms but thriving through them, leveraging financial acumen and foresight.

So, stay tuned for these valuable insights and more. I invite you to follow me for updates and discussions on this crucial topic. Your engagement and feedback are what drive these conversations forward. Together, we'll explore how we can protect and propel our ventures in any economic climate.

Let's continue this journey of learning and growth. For more information, insights, and discussions, don't hesitate to connect. Your thoughts and perspectives are invaluable as we navigate these dynamic and transformative times.

Looking forward to our continued exploration in the world of technology, business, and innovation.

Stay informed, stay connected.

Until next time.