Playing matchmaker online can be a lucrative business. Hundreds of dating sites are raking in a total of a $1 billion dollars each year, with popular sites, like Match.com, eHarmony, Yahoo Personals and Plenty of Fish, taking the lion's share. But there's always room for newcomers who design a different offering for today's generation.
One such newcomer is Thread, whose co-founder and CEO Brian Phillips would describe his rationale for starting the online dating site that leverages Facebook like this: "Not everyone is on dating site... But the best people are all on Facebook." See my first interview with Brian, in which he explains how Thread works as an online dating site on top of Facebook.
In this second part of our two-segment interview, Brian and I discuss how Thread plans to make money and get to profitability. Brian estimates that it'll take the company 18 months to reach cash-flow positive with the $1.2 million recently raised from Sequoia Capital, Founders Fund, First Round Capital, and high-profile angels, such as Ron Conway and Reid Hoffman.
Most dating sites charge members over $50 monthly, and offer psychological reports, or analysis on chemistry vs. compatibility, etc. to make members feel as though they're getting more than just access to people - they're learning more about who they should be matched with.
On Thread, there's none of that matchmaking magic, at least not yet. Thread plans to let Facebook friends do the matchmaking. The premium products Thread is thinking about include:
- Paying to see who viewed your profile (something LinkedIn charges for)
- Paying for A/B testing to see which photo received the most clicks
- Paying for a glass of virtual wine to a new interest
- A cheaper subscription service
- Paying for endorsement badges (i.e., if I endorsed Brian as my top 5 eligible bachelors, he can have a badge on his profile reflecting that)
How do you think Thread should make money?














" the billion-dollar online dating business "
Online Dating Sites can be classified as:
Online Dating 1.0: First Generation "Browsing/Searching Options, Powerful Searching Engine"
Online Dating 1.5: Hybrid; "Unidirectional Recommendation Engine", sites like HotorNot.
Online Dating 2.0: Second Generation "Matching based on Self-Reported Data / Bidirectional Recommendation Engine" e.g. PerfectMatch, uses an ipsative instrument based on MBTI test.
Online Dating 3.0: Third Generation "Compatibility Matching Algorithms" e.g. eHarmony, uses a normative version of the Big5 to assess personality and Dyadic Adjustment Scale to calculate compatibility. The U.S. questionnaire is different from the UK site, Australian site, Canadian site, etc.
There is a plethora of Dating Applications at Facebook, mostly for casual daters, for fun, for flirting, for entertainment purposes, for instant gratification and not for serious daters looking for a long term relationship with commitment.
Serious daters do not tolerate friends / parents / neighbours / relatives / fans or other social networking users to be involved in a private matter as building a personal relationship with future in mind because they are "interested third parties ingredients" in a process that only concerns 2 persons. (See former Online Dating site ENGAGE, complete fiasco)
Social networking and online dating for serious daters are like water and oil, they will never mix.
Online dating is NOT LOCAL [for serious daters]. Online dating is always "intermediate" for serious daters: "your city and all the cities near your city up to 250 miles"
Top_5_sites_by_revenue in the U.S. (Match&Chemistry / eHarmony / Yahoo!Personals / True / PerfectMatch) have a revenue of USD816.1 million.
Top_5_sites_by_revenue offer some kind of a proprietary compatibility matching method but they reach "as low as" 3 or 4 persons high compatible per 1,000 persons, that means a whole precision less than anyone could achieve by searching on one's own!
Anyway, the entire Online Dating Industry [for serious daters] is a big hoax.
Online Dating Sites should had killed Offline Dating Proposals (chains, professional matchmakers, etc) since some years ago, but offline proposals are still alive and with good health.
Moreover, no actual online dating site offering a compatibility matching method has a peer reviewed Scientifc Paper by Academics (public scrutiny of findings) from different Universities showing its matching algorithm can match prospective partners who will have more stable and satisfying relationships than couples matched by chance, astrological destiny, personal preferences, searching on one's own, or other technique as the control group.
WorldWide, there are over 5,000 (five thousand) online dating sites, but:
No one is using the 16PF5 normative personality test, available in different languages to assess personality of their members, or a propietary test with exactly the same traits of the 16PF5
No one is using a quantized pattern comparison method (part of pattern recognition by cross-correlation) to calculate similarity between prospective mates.
Kindest Regards.
Fernando Ardenghi.
Buenos Aires.
Argentina.
ardenghifer@gmail.com