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Love On The Run: The Next Revolution In Online Dating

This article is more than 10 years old.

For obvious reasons, the weeks leading up to February 14 mark the busiest time of the year for online dating services. The proprietors of the most popular websites and apps expect this year’s crop of last-second Valentine’s Day love-seekers to be a record one -- and next year’s promises to be even bigger.

Maybe a lot bigger, in the view of Sam Yagan, CEO of Match. As he sees it, 20 years after the website his company is named for birthed the online dating industry as we know it, the business of using technology to turn singles into couples is on the cusp of its next big inflection point. In the next few years, propelled by the twin currents of mobile computing and social media, the industry will reach new levels of popularity, profitability and utility.

A division of Barry Diller’s IAC/InterActive Corp., Match represents nearly one-third of what is a $2.1 billion market that grew a healthy 7.1% last year, according to the research firm IBISWorld. Besides Match.com and its 1.7 million subscribers, its businesses include OK Cupid, acquired in 2011 for $50 million; Meetic, the No. 1 dating site in Europe; People Media, a collection of niche sites like BlackPeopleMeet and SinglesMeet; and, of course, Tinder, in which it owns a controlling stake. “They’re the biggest player in the market, and they tend to be in the forefront of the trends,” says IBISWorld senior analyst Jeremy Edwards of Match.

Yagan, 40, came to IAC as a co-founder of OK Cupid. Brimming with geeky energy, he has a nervous habit of taking off his wedding ring and spinning it while he talks. (Perhaps it’s his way of getting in the mindset of his consumers; somewhat famously, all four OK Cupid founders met their wives offline.) As much math project as matchmaking service, OK Cupid prides itself on its ability to coax meaning out of big data sets. Lately, Yagan has been mulling the patterns in his industry’s metanarrative.

The 20-year history of online dating, he says, can be read as three epochs. The first few years were about search. Primitive as it seems now, the ability to find other singles online, and to filter them by age, location, eye color, sexual proclivity, etc., was a revelation -- even if the only people making use of it were “the crazy geeks who knew what the internet was,” in Yagan’s words. Then, in 2000, a new service called eHarmony purported to take the trial-and-error out of search by using a proprietary computer program that suggested the most compatible matches. Thus began the age of the algorithm. (This is where OK Cupid entered the picture.)

That brings us to the present. Now, the pool has deepened such that around half of all single people use online dating services at some point, and the algorithms that power them have gotten about as smart as they’re going to get for the time being. What users want isn’t more or better matches on the screen, says Yagan. What they  want is an easier and faster way meet them IRL -- in real life. “The big thing now is offline,” he says. “This device,” he adds, dropping his wedding ring and picking up his phone,” “is the thing that marries online dating and offline dating.”

It was, of course, inevitable that the activities involved in online dating would migrate from desktop and laptop computers to mobile devices. In 2013, the amount of time American spent on mobile devices, excluding phone calls, for the first time exceeded the time spent on PCs, according to eMarketer. If people are already using their phones as credit cards, gaming consoles and movie theaters, it stands to reason they’d become matchmakers, too.

Just how much the industry has already migrated to mobile depends on whose metrics you’re looking at. The device security firm Iovation says 39% of online dating now happens through mobile apps. The analytics provider Flurry was saying as far back as 2011 that mobile dating app usage exceeded desktop. But a study conducted in late 2013 by the Pew Research Center’s Internet and American Life Project found that only 7% of app users, and 3% of American adults overall, had used a dating app.

Whichever data set you favor, all the trend lines point in the same direction. But it isn’t just about porting web experience over to mobile. For online daters, mobile offers a fundamentally different experience, one that in several ways offers a superior answer to problems the industry has been struggling with since its inception. One of those problems is the stigma that continues to cling to the practice despite its arrival in the mainstream. In Pew’s survey, 59% of respondents said they considered it a good way to meet people, while 21% said it’s only for the desperate. Those numbers have shifted considerably since 2005, when Pew last asked the questions, but they still show a sizable minority that sees internet dating as a last resort for sad sacks.

If people think online dating is for losers, it’s partly because the experience of it makes them feel like losers. Spending hours and hours at a computer when you should be out having fun will do that. “It makes you feel pathetic and desperate to sit there and fill out this survey that takes longer than doing your taxes, just to meet someone,” says Kate, a 31-year-old San Francisco resident who works for a large social media company. Kate met her current boyfriend through Tinder. She signed up at the urging of a coworker during a shared bus ride home and within five minutes was swiping yes or no on potential matches while he looked over her shoulder, offering input.

Kate's experience is telling. Freed from the anchor of the PC, e-dating has become a social activity. For the first time, people can actually watch each other do it -- and there’s nothing like seeing a friend do something to make it feel normal. Spend enough time at a bar on either coast and you’re likely to see a group of 20- or 30-somethings huddled around someone on her phone, urging her to swipe this or that way. These impromptu Tinder parties are the app’s best marketing weapon. Indeed, Tinder CEO Sean Rad says one of the most frequent requests he hears from users is a setting that will allow them to Tinder on behalf of friends.

The trends of the past year have done more to lift the stigma than anything in the previous 19, says Aaron Schildkrout, co-founder and CEO of HowAboutWe. “Online dating had a moment in 2013,” he says. “It started to get talked about a whole other way, and a lot of that was about people looking at phones together. The process of thinking about who you want to date became a public question.”

But shame hasn’t been the only thing limiting the appeal of online dating. There are also the frustrations inherent in the process, which demands massive investment for relatively little return. For men, it typically means sending dozens of messages in order to get a single reply.  (One enterprising OK Cupid user, a math grad student named Chris McKinley, went so far as to write software to optimize his chances of matching with every eligible woman in Los Angeles.)  For women, it means sifting through all those messages and then spending days chatting with the most promising suitors before committing to a date, in order to make sure they’re not freezer-full-of-heads types.

HowAboutWe, which is structured around activity suggestions rather than profile matching, was launched as a remedy to that problem. It’s the same conundrum Match’s Yagan identifies as being the central question facing the industry: how can online matchmaking drive more real-world dating?

Tinder represents the most extreme answer yet. Its key insight is that, under certain circumstances, people are willing to jump into interactions with much less information about each other than earlier dating platforms provided. Tinder creates those circumstances in two ways: with social authentication (through Facebook), and with what it calls the double opt-in. Social authentication provides the peace of mind of knowing that someone is a real person, often one whose circle of Facebook friends intersects with yours, while still maintaining a modicum of privacy. (Only first names show on profiles.) The double opt-in, meanwhile, ensures that the only interactions that take place are between people who have both expressed interest in each other.

These conditions make Tinder a better analog for real-world dating than other alternatives, says Rad. Say you see a cute girl at a party. You may not know where she went to college or what she thinks about cilantro, but you know that she came with one of your friends, who can tell you if she’s single, and that she returned your smile. That’s usually enough. “We like to think that Tinder’s like real life, just a little better,” says Rad.

Not everyone buys this. Hadley Harris is a founding general partner at Eniac Ventures, whose portfolio companies include the social dating site Hinge. When he looks at Tinder, he sees something with the adoption curve not of a dating service, which tend to grow in fairly linear fashion, but of a mobile game like Draw Something or Angry Birds. “I think Tinder’s not really a dating app,” he says. “People use it for entertainment.”

“Is there an entertainment component to Tinder?” counters Yagan. “Yes. Is there an entertainment component to all online dating? Yes. Is there an entertainment component to all dating? Yes. But the idea that it’s not an ultimately productive dating app is a false statement.”

While Tinder is the new new thing of the moment, it can also be seen as the product of a longer-term trend in the dating industry away from ideal hypothetical matches toward rough-and-ready real-world meetups. It’s a user-driven trend: For years, the most frequent complaint Yagan has heard from customers of IAC’s dating property is that the process is too time-intensive. It’s very much the problem HowAboutWe set out to solve upon its launch in 2010. At the time, says Schildkrout, “most of online dating involved an endless series of pokes, winks, endless chatting, without ever actually meeting up,” he says. The solution: “a dating site completely structured around people suggesting actual things to do.”

In the tech world, it's dogma that if you’re going to fail, fail fast. And the vast majority of relationships begun online do, of course, fail. One way to look at this is that the vaunted algorithms were never particularly good at doing what they claimed to do in the first place. That was the conclusion of five researchers who authored a 2012 paper in the journal “Psychological Science in the Public Interest.” “Regarding matching,” they wrote, “no compelling evidence evidence supports matching sites’ claims that mathematical algorithms work --- that they foster romantic outcomes that are superior to those fostered by other means of pairing partners.”

Yagan would be first to acknowledge that his beloved algorithms are imperfect. Algorithms depend in large part on the stated preferences of users, and users tend to be bad at “weighting” preferences correctly -- that is, at distinguishing what they think they’ll care about in a partner from what they actually care about. A classic example of this is political orientation: People tend to place far too much weight on finding a partner with the same views, a factor that tends to have relatively little effect on relationship outcomes.

But that’s exactly what has Yagan so excited at the moment. “With algorithms, there’s iterative improvement and then there are step changes,” he says. “The step changes come when there’s new data.” Real data like, say, Facebook authentication that ties your pseudonymous online dating profile to your real-world identity. (Both Facebook and Hatch use Facebook authentication.) Or location data from GPS-enabled phones, which, for the first time, lets dating services know with a reasonable degree of certainty whether a date even took place.

“I would say the algorithms are as good as they can be with the current data sets, but mobile and social are going to bring new data sets, and you’ll start to see step-change functions in algorithm quality,” promises Yagan.

A better product, then -- and a more profitable one. Advertisers will pay more to reach users whose profile they can tie to a real person, and mobile payment ecosystems like iTunes and Google Play make it easier to charge users directly. At OK Cupid, direct user payments surpassed advertising last year as the biggest source of revenue. Tinder is still in the early stages of thinking about monetization, but when it does go there, it’s likely to emulate OK Cupid’s model of free access plus paid premium features, says Rad.

“The core offering of a dating site is so powerful,” says Yagan. “We are what stands between you and this person you really want to meet. It’s one of the most effective paywalls there is.”