5 reasons online dating niche are a business dead end

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For many budding entrepreneurs, the point where the Internet overlaps with dating seems like a match made in heaven.

Surely any online activity which can demand a global audience of what is fast-approaching 100 million potential users is an area that can be tapped into? But there are many reasons why anyone considering looking into the business possibilities associated with online dating sites such as quickflirt or tinder should exercise caution. Here are five of the most obvious.

The competition is phenomenal

The problem with considering dating sites as an area for investment is the sheer scale of the phenomenon. While there are thousands of these web platforms, operating in countries right across the globe, this results in market fragmentation. How complicated would your business model have to be to take into account the myriad possibilities and variations in theme and customer engagement? What criteria would you use to define sites with the most potential? How would you manage your relationship with the sites you have decided to seek opportunities with?

The bottom line with outlining the strength of a prospective business venture is to do the Google maths. If you pop ‘dating sites’ into that search bar you will see thousands of hits. This equates to the degree of competition you will be facing.

Lack of a definable market

In an area like online dating, it is difficult to get a handle on what would constitute intellectual property. You would need to ask yourself how advisable it would be to dabble in business areas where you have no way of establishing a patent for what you are about to undertake. What defense would you have if a rival was to come along and simply copy whatever steps you had taken?

There is a lot of dishonesty in this area

A major aspect you have to consider it this. Internet dating is hugely popular, and much of what drives this ever-expanding social network is the allure of relationships and sex. This may seem like a potent area for a viable business, but it’s also irresistible to scammers. Many people who go online to seek partners are in a vulnerable place and are easily pounced upon by unscrupulous users.

The difficulty with quantifying a value

The key to a successful business investment is the ability to define clearly measurable values. How are returns measured against cost? Again, against such a multi-faceted, layered and fragmented business model, or more accurately, a tangled web of business models, how does an entrepreneur get a handle on ways of tapping into the processes?

Issues with sustainability

From a business point-of-view, the ideal customers are those who stay in the same place, locked in by the excessive cost of switching. But matchmaking websites can represent a fairly ephemeral rather than constant activity.

While people can certainly connect online, in the majority of instances users are merely using the web resource as a gateway into the more traditional form of dating. In short, they meet online, get to know each other, arrange face-to-face dates, then move on.

The very success of a website in uniting singles means they are actually losing customers on a daily basis. When singletons starts dating in the offline world, they cease paying the fees their website would have been charging them to use the various communication tools.

For many serious investors, dating sites are shiny and exciting and capable of enticing new customers on a regular basis. But in that respect, they fall into the same category as online gambling: hardly an area to inspire any degree of optimism for entrepreneurs.