The Happiness Business
Booth start-ups explore better ways to date digitally
Full-Time student Sarah Press knew there had to be a better way to leverage the social habits of her tech-savvy peers and improve the experience of online dating. "I thought there should be a way to meet up with someone new at the click of a button," recalled the founder of Chicago-based Project Fixup.
Press is among the growing number of Booth alumni and students who are pursuing careers as entrepreneurs. She also is a member of a smaller subset enamored of the crowded but still promising field of online dating who are applying their business acumen and creativity in the hopes of forging profitable niches.
At the busy intersection of technology and commerce, online dating is a $2 billion market. An estimated 11 percent of American adults have tried their luck at finding love online, according to a new study by the Pew Research Center. Digital natives between the ages of 25 and 34 are the largest segment, with 22 percent looking online for a relationship.
As the industry evolves, specialty sites have popped up, targeting just about every ethnic and religious group, as well as people with particular lifestyle preferences such as vegetarians, animal lovers, and geeks.
Four Booth start-ups are seeking their sweet spots in the mix. Catch22Dating courts singles who attended top-tier colleges. Paktor woos the underdeveloped East Asia market. OK Cupid Labs functions as the research and development arm of the popular dating site, OK Cupid. And Project Fixup offers a new spin by focusing on the activities that bring date seekers together. The start-up placed third in the 2013 Edward L. Kaplan, '71, New Venture Challenge, winning $15,000 to help expand the venture. The NVC, started in 1996, is a business launch competition hosted by Booth's Polsky Center for Entrepreneurship and Innovation.
While many Booth start-ups are B2B ventures, the founders of these four see promise in the consumer marketplace and hope the eternal quest for romance will yield start-up hits.
Internet matchmaking is a good business strategy, according to adjunct professor of entrepreneurship and NVC judge Mark Tebbe. "Students and alumni exploring entrepreneurship often begin by identifying markets that are poorly served or underserved," explained Tebbe, a Polsky Center entrepreneur-in-residence. "Thanks to the relatively low barrier to entry, the online dating market allows new ventures to address lackluster customer experiences with innovative solutions and approaches."
Catch22Dating, founded in 2011 by Ruchi Talati, '11, and Jennifer Parkes, '11, hopes to cut through the clutter by serving an elite market - alumni of top-tier colleges and universities. Its simple premise: educated, successful singles want to date smart people who are going places.
In order to join, members must have attended either one of the top 50 academically ranked national undergraduate universities or one of the top 25 academically ranked graduate programs in their field of study. Applications to the site are reviewed and degrees verified through sources such as transcripts and the National Student Clearinghouse.
Catch22 allows members to hide their profiles from coworkers, graduate program peers, or others. The idea, the pair explained, is to make the process as personal as offline dating but more efficient. "Online dating can be highly effective, especially for niche sites like ours," Talati said. Parkes and Talati have invested their own capital in the business.
For access to this highly screened cadre of mates, members sign up for a three, six, or 12-month membership that ranges from $11.99 to $15.99 per month.
Fee-based membership reinforces Catch22's sense of community by ensuring members are invested in their online dating experience. Charging for the service also enables the site to run background checks on all applicants - a level of security that is unheard of among free dating sites.
"Catch22's strategy of connecting like-minded individuals in a safe environment addresses a real need for our busy members," Parkes said.
A BETTER PEANUT BUTTER
As a recent graduate, Joseph Phua, '13, saw entrepreneurship as a chance to fix a problem. Newly single, Phua had turned to online dating in his final term at Booth. But as he prepared to return to his native Singapore, Phua couldn't find Asian-based dating platforms. He would be back to social square one.
With classmate Chris D'Cruz, '13, Phua decided to take online dating to Southeast Asia. According to Phua, the industry has been slow to take off there due to cultural mores - an engrained reserve and fear of rejection. The pair in June introduced Singapore-based Paktor, which translates to "go on a date" in Chinese Hokkien dialects.
The free app allows users to give each member profile - composed of a user photo, age, and location - a quick thumbs up or down. The app dulls the sting of rejection by alerting the user only when there is a mutual thumbs up. Paktor, which currently is financed by a mixture of personal and family capital, has facilitated approximately 100 million profile ratings and counts 500,000 matches.
The look and feel of the app are designed to appeal to a pan-Asian aesthetic. "We like a sleek design with functional frills," Phua explained. But perfecting the platform is only half the equation. Educating Asian consumers about online dating has been a challenge.
"We couldn't market the app by saying 'Buy our peanut butter because it's a better peanut butter,'" said Doug Nagy, '13, who heads marketing for Paktor in Thailand. "People just didn't have experience with online dating." Nagy has focused on Thai college campuses, hiring local reps to identify campus "tastemakers" and convince them to try the app.
Although the app is free, Phua and D'Cruz are experimenting with revenue models. For example, the founders are in talks with restaurants and club owners who would pay a fee for the opportunity to offer discounts on the site.
A recently updated version of the app features digital "stickers," or emoticons, for purchase that users can add to their profile to convey personality. For example, a movie buff could buy an icon of a reel of film to add to his profile in hopes of attracting fellow cinema enthusiasts.
Paktor is live in Hong Kong, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Bangalore, India, and Tokyo are next.
Brian Luerssen, '11, cofounder and general manager of San Francisco-based OK Cupid Labs, is trying to translate lessons from the dating world to businesses outside online matchmaking.
The Labs functions as an R&D shop for OK Cupid, with access to the online-dating giant's impressive array of user data and analytics.
"We add value by going after interesting business ideas, whether they fit within the traditional online-dating framework or not," said Luerssen, who got to know OK Cupid founder and Match.com CEO Sam Yagan when the two developed Chicago tech incubator Excelerate Labs (now TechStars Chicago).
In a departure from the focus on singles that is basic to most online dating sites, the Labs this fall unveiled Delightful.com, a dating concierge service. Delightful caters to matched pairs, planning dates for busy couples and taking care of all the related logistics. Activities include concert tickets, picnics in the park, and the standard dinner and a movie.
Whatever people are searching for, "they now are more likely to look online for a solution," Luerssen said.
Full-Time student Sarah Press considers her site, Project Fixup, more like "offline dating" because subscribers don't actually interact online. The idea, according to Press, is to avoid the upfront hassles of long questionnaires and be matched quickly for a date. Members register online and add a few preferences and windows of availability. "We get people doing what they actually want to do, which is to meet up with another human being to do something fun in their city," Press said.
Each fixup costs $15 per person, and there is no membership fee. Fixup themes have included drinking craft beers at a dive bar, volunteering with an animal rescue nonprofit, or renting bikes in downtown Chicago. Project Fixup has organized more than 320 dates and counts 2,500 registered users. The site is currently only available in Chicago, but Press plans to expand to Boston, San Francisco, and Washington, DC, this year.
Thanks to a strong start and the promise of scalability, Project Fixup earned a spot in the summer 2013 class of TechStars Chicago.
"I like the Project Fixup business model," said Yagan, TechStars mentor and advisory board member for the Polsky Center. "Because it's not another search-based dating app, the site doesn't need a gigantic critical mass before it can start being useful."
Press says her success so far validates the demand for connecting people in better ways. "I'm passionate about using technology to bring people together," said Press, "and I like being in the happiness business."
Photo of tablet by Vincent Vernet; photo of Paktor app courtesy of Paktor