The online dating industry is booming and last year 2011 we saw a proliferation of new online dating sites coming into the market including many free dating sites. This year (2012) there appears to be a lull in the sector of new online dating websites coming into the market. I mainly put this down to the ‘fever’ that takes hold when venture capital firms and pundits drum up interest in this area, so much so that would-be entrepreneurs arrive in droves. Part of the reason for the big hike in 2011 was essentially due to the bigger online dating companies such as match.com posting their strongest growth ever along with a few mergers and acquisitions.

It is a sad state of affairs that many new entrepreneurs that are drawn into this market do so with little knowledge of this market. They create new free dating sites that target niche markets such as group dating, geek gadgets dating and even pet dating but unfortunately a majority of them all fall on the wayside. One has to think outside the box rather than follow the current way of thinking. For example, the biggest player in the paid subscription model match.com has remained unchanged since its inception over a decade ago. Similarly the biggest player in the free dating sites model, plentyoffish also remains true to its original form many years ago.

The danger of doing something new and radical has its risks but also has its rewards. One of the biggest component of the business model that many entrepreneurs fail to appreciate is the critical mass that is required in terms of a user base in order to have sustained growth. For some lucky start-ups, the free dating sites are backed by venture capitalists and even then it will take a very focused and concerted effort to hit critical mass. Like many start-ups we have seen in the early days of the internet boon, money can be spent rapidly on a start-up and income is usually based on speculative and often wild forecasts.

Fortunately, the business of online dating has settled into a less speculative model and more of a realistic model but there is still plenty of room to innovate and come up with the next killer application.

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