The online dating market is a $1 billion annual business. One company - Thread - is trying to go after that market by leveraging the connections on Facebook by creating a dating filter on top of the massive social network. The value proposition? Why not meet friends of friends rather than some random person considered psychologically compatible?
We take a look at Thread in this week's Vator Box, with Aydin Senkut, an early-Google employee-turned angel investor, who is becoming known as one of the more prolific seed-to-early-stage investors in Silicon Valley, having invested in 40 companies since 2006, such as Mint, which was recently sold to Intuit for $170 million, Aardvark, Disqus, Dogster, BrightRoll and Rapleaf.
Full disclosure: Aydin tried to get into the funding round of Thread, but was too late! So, as you can imagine, his comments were very positive.
Here are some of our collective observations of Thread and the pitch given by co-founder and CEO Brian Phillip.
- It's almost shocking that no one has tried to do this before. This idea is completely obvious, it's fabulous.
- There's been some innovation around online dating from sites like Woome (speed dating) or Ignighter (group dating), but there has been no innovation across online dating sites from eHarmony to Match.com, it's refreshing to see some innovation around this space.
- Despite the great idea, it's hard to know how things will unfold, and whether Thread will be lucky enough to stumble into a great business model, which is what some would say about Google. Google was fortunate enough to embrace Overture's pay-per-lead auction model early on in its life cycle. But prior to finding that model, it was searching. Another example of companies that both appeared promising early on and leveraged social networks, but appear to be heading into two different exit scenarios is iLike and Zynga. Online social gaming site Zynga appears to be positioned for an IPO, whereas music recommendation site iLike, which leveraged MySpace, was sold to the social network for $20 million.
- The worldwide market for virtual goods is $5 billion. Tapping into this pool is worth trying.
- Thread plans on offering a discounted subscription to Match and eHarmony. But will people pay to meet people they're already connected to? At least on other matching sites, the net is cast very wide.
- There are many comical residual qualities about this service, particularly of dating history gets weaved into the Facebook news feeds and walls. You can imagine one very unhappy dater saying on someone's wall, "This guy chews with his mouth open and never pays the check."
- There can be many payment options. For instance, if a person has looked at someone's profile 52 times in one day, they could pay Thread to hide those actions.
- Would Aydin invest in Thread? He already tried and wasn't able to get in. Thread is a fbFund company and has raised $1.2 million from Sequoia Capital, Founders Fund, First Round Capital, and high-profile angels, such as Ron Conway and Reid Hoffman.