Some investors are put off because of the links to the adult industry but for those with the ability to see the clear separation between the two sectors, there’s a potential goldmine hiding in plain sight. We’ve been operating and investing in the dating sector for years and here are my top tips for those who want to strike it rich in dating.
Don’t just look at dating websites
While it’s tempting to try to find the next Match.com or Tinder, there’s potentially more value for investors researching and discovering technology companies that service the dating sector.
In my view, the sector is the Madagascar of the business world. Its ecosystem and environment is different to pretty much any other industry, which fosters a great deal of innovation. Because dating technology companies develop completely independently from other areas, they have the opportunity to have a fresh perspective on problem solving and R&D.
Affiliate marketing, audience targeting, programmatic advertising and machine learning are all trends that have incubated and developed in a unique way inside the dating industry, making investment in these companies a great way to incorporate new thinking and solutions into mainstream organisations.
Make sure you know who you’re getting into bed with before investing in the dating sector
While knowing exactly who you’re getting into business with is sound advice for any sector, it should certainly not be forgotten in the dating industry. As the sector is growing so quickly, many business owners have their hands in a lot of different pies.
If you’ve gotten this far you’ll no doubt have accepted there is a link between dating and adult but that does not mean that every business is. If you have concerns about taking a company into your portfolio that has a different way of operating or audience, scrupulous background checks need to be a priority. For right or wrong, your other businesses’ audiences may be put off by a connection to more risqué companies so you need to make sure you know exactly what you’re getting before you dive in.
Operating a dating company is different than mainstream businesses
As I mentioned above, dating is a very independent market – keep that in mind if you’re thinking of investing in the dating sector. It isn’t just with audiences, staff or competitors but extends to suppliers and regulations.
Many banks are hesitant to be linked with the sector so managing and processing finances is a completely different ballgame. This in itself has led to some brilliant innovations, which mainstream sectors could really learn a lot from, but it has to be a consideration for any investor that hasn’t been involved in dating before.
Operations, marketing and finances all work in a unique way so you need to get your head around this before you make an investment. Having a good consultant or partner that knows the space could help the transition significantly so do your homework, meet some people in the sector and listen to good advice.
In short, the dating industry is hiding some of the most innovative and disruptive technology companies around. These firms operate differently and there is a link to more risqué markets, but if you unearth a gem and manage to integrate it into your portfolio, you can gain a huge step on your competitors.
Jenny Gonzalez is chief revenue officer at Agile Wings.
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