Problem: As described by Lucy Mort, “If dating apps built their own social graphs it would make wading through the masses and knowing who to talk to so much easier. Social overlap is a pretty decent proxy for romantic compatibility. And it's currently missing from ALL dating apps.”
Solution: Taking Lucy’s idea at face value, this business would simply connect people to one another based on how many mutual friends they have. In the replies to her Tweet, Lucy described more about how it would work:
Get access to each users’ phone contacts. Figure out which contacts different users have in common. Display the mutual friend count on profiles, and possibly even display the names of the mutual friends. Could even expand to 3rd degree connections
…
I feel like collecting this data would be easy. Button on profiles ‘See if you have mutual friends’, to check you have to give access to your phone contacts. I would be so so willing
While her idea sounds great, many other replies argued that implementing her feature as described would eliminate the whole purpose of dating apps.
(as argued by Sebastien Meslage) Dating apps have all the datas needed to help people to find the right person. However, their ultimate goal is not for you to find the right person but to come back on their apps, after a dating and perhaps paying for a premium account.
In an “addiction economy,” the value of these platforms is to get people to come back and spend hours of their lives swiping, chatting, and creating profiles and secondary effects. Better yet, if they pay to come back then you’ve developed a “winning product.” You can read more about this theory in Nir Eyal’s “Hooked: How to Build Habit-Forming Products.”
(as argued by Michael Goldstrom) There’s a reason they don’t offer that: it would make them more effective. Like many internet models they thrive on you spending as much time as possible on there to demonstrate “engagement”. Because the need is strong, people will swipe, even if ineffective, all day.
Goldstrom builds off this in describing how the business model of engagement is actually ruining the end-goal of long-term connection that many people seek when they download a dating app.
Thus, to truly make Lucy’s idea viable, the business would build off of both the product innovation (using a social graph) and create a financial innovation (e.g. only requiring people to pay once they’ve made a match, asking people to pay to connect more mutual friends to their account, etc.)
The economics of love are definetly a Unicorn market. For instance, Match Group (the world's leading provider of dating products), operates a portfolio of over 45 brands, including Match, OkCupid, Tinder, Meetic, Twoo, OurTime and FriendScout24, each designed to increase our users' likelihood of finding a romantic connection. They reported about this (among other details) in their SEC S1 filing. As of September 14, 2020 the Match Group was valued at over $28 billion with $2 billion in revenue. Without a doubt, the “economy of love” is one with huge payoffs for investors. See below for Morningstar’s report:
Monetization: Financial innovation on the platform.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)