Despite all the changes to the dating industry over the past few years, one thing has remained the same – running an online dating business is tough.
In fact it is getting tougher – the shift to mobile has brought hoards of new users to online dating, with apps like Tinder introducing singles to the world of quick, on-the-go & free dating, but it has split the market.
The desktop and subscription-based incumbents have had to deal with this fresh mobile competition & new user expectations, while also trying to convince singles that it’s worth paying for online dating.
On the other side, although the handful of recent mobile dating triumphs like Tinder & Happn have inspired a host of startups looking to replicate their success, both groups must still tackle the problem of building a sustainable business with a user base that has become accustomed to getting online dating for free, while still dealing with age-old problems like built-in churn and user acquisition.
And for the startups looking to enter the game & shake up the industry, one of the biggest problems is the substantial financial down payment needed to first build the kind of sleek, user-friendly app that singles now expect, and then to maintain the business until it starts to bring in revenue.
One company that decided to run this gauntlet was a dating service built by a programmer in Manchester that had a classic niche proposition – to match singles who liked people with beards, to people who had beards.
Despite being created by 29-year-old John Kershaw as “somewhat of a joke”, Bristlr became one of 2015’s surprise successes, seeing growth around the world after being featured in The Washington Post, BBC, The Guardian, Cosmopolitan, CNBC, Newsweek and The Telegraph.
As Kershaw told GDI when we spoke to him earlier this year, when building the product, he did so in a way that meant the platform it was created on was “as flexible as possible” should the team want to release another app, because he “always assumed that Bristlr would have a shelf life”.
And although this particular prediction turned out to be untrue, the startup soon realised that building the dating product in this way opened new, unexpected doors.
The Manchester-based team discovered that in addition to allowing them to release more of their own products, it was now a platform that could also be used to let others build their own dating services.
After this realisation, which came towards the end of 2015, the team of six turned their attention away from Bristlr and focused on this new product – M14 Industries.
M14 is essentially a fully customisable white label dating platform for apps that provides partners with the full technology and base to build a distinctive, scalable & pre-populated mobile dating product.
It does this by charging a setup cost – that starts at around £800 – as well as a low monthly fee with add-ons, and splitting the revenue share with its partners.
By doing this, M14 aims to break down one of the biggest barriers of entry into the dating space – the large setup cost required to build a great product – therefore making the space more accessible to people with good ideas, but financial constraints, by enabling them to focus on building a competitive brand without having to be weighed down by the costly demands of tech & infrastructure.
But the really exciting thing about the platform is its ability to build mobile dating apps that aren’t simply carbon copies off the production line, instead working as a WordPress-style platform that uses web hooks & APIs to let partners use their own tech to create apps that are customisable by design, UI & features.
And the platform has peaked the interest of investors – M14 recently raised a six figure investment round joined by two former ex-Match.com MDs – including Simply Business CEO Jason Stockwood – Friends Reunited founder Steve Pankhurst & head of TechNorth, Herb Kim.
Earlier this year – after M14 launched its first partner mobile app, Koob – GDI exclusively spoke to M14 founder & CEO John Kershaw to learn more about this new project.
You can read an edited transcript of our conversation below:
So I’m interested in how & when the M14 angle came about when you were building Bristlr?
Well when we started with Bristlr, we didn’t know whether or not the platform angle would be sensible. We built Bristlr so that we could maybe turn it into a platform, but it wasn’t necessarily always the plan. But in a way, Bristlr acted as a test for the platform model. So towards the tail end of last year, we brought M14 out of the shadows and started talking very quietly to other people, saying: “Hey, we’ve got this thing – essentially a white label dating platform that does apps”, and although we’ve done no outward PR, we started getting inundated with people who were interested. And it was only last year when we realised how big of a problem this is and how we’re basically solving it.
So when you were building Bristlr, did you know you could use this tech to build a white label app platform?
Originally it was that we always knew we wanted to launch Bristlr, but because we’d hooked Bristlr onto this trend, we kind’ve always assumed that Bristlr would have a shelf life – and it turns out we were completely wrong about that, and I’m totally OK with being wrong about that – but that was kind of the assumption, probably because I’m a cynic. So then we assumed we were going to launch our own dating apps, for people who love coffee, or people who love tattoos or fitness, and we were always going to go down the niche line – just because it’s so much better if you go down the niche route. Mostly because everyone has a better experience, especially if you’re dealing in mobile, so you have to keep the process streamlined, because if everyone is self-filtering themselves, then you solve a lot of those problems that you have on apps like Tinder, where you match with people you don’t have anything in common with, apart from proximity.
So when we were building Bristlr, the plan was always to be able to use our tech to power multiple sites, and I think unless you do that from the very beginning, it becomes impossible to do it. So we had enough foresight that we were onto something, but it was only in the past six months that we realised that launching our own apps is fine, but bringing other partners on board is a much bigger opportunity.
What exactly makes M14 so unique as a platform, and in what way is it similar, and different, from other white label dating platforms?
The “secret sauce” of white label dating apps is if you take an app like Bristlr and you copy and paste it, and change it so that it looks like a different app, then no one cares, and no one uses it. So when we talk about white labelling, it’s slightly more complicated because everything you see as an end use, we can customise that, and we’re building the platform with that level of customisation.
So in a way, it’s more like WordPress – you can have any theme that looks like anything, you can have custom plugins, but WordPress does all of the heavy lifting. So we do all the email notifications, the security, the scalability, customer support all that stuff – that is 90% of your tech budget – we just do all of it. Meaning that as a partner, you worry about the branding, you worry about the marketing and you worry about any custom features. For example, we’ve got someone who wants to do these completely ridiculous & awesome things using image recognition tech, and because we can do these custom third party integrations, we can just bridge straight across to their tech using an API and just bolt that straight in.
So because we’re doing our customisations on more of a fundamental level, it gives us much more flexibility so that the app that you end up with is the app with all the custom features and custom UI you want, not just some off the shelf thing that looks like everyone else’s.
And another thing is that because we’re not copying and pasting, and basically replicating, everyone sits on the same platform. So when iOS 9 came out, there were a load of security aspects that needed updating, and we had an update out within two hours. And that would be the same whether we have one partner or 100 partners.
What other customisable add-ons and benefits can clients get from the M14 platform?
Interestingly, what you can do with our platform, that I don’t think anyone else can do, is that we have an in-house data scientist, Katie Baker, who does amazing research, but she does this through generating scripts using a language called R, and because we can use a consistent platform, we can take a script that runs a conversion optimisation script that, say, breaks down users by demographic and platform usage. After it’s been made in-house, we can then run that script for every single client, so suddenly you can get all these outlandish reports that can tell you, I dunno: “People who are in Spain and online at 3am are 12% more likely to do this”, or whatever it is.
And you get all of that for free through our platform, because if you build something for one client, everyone can then use it, unless they’ve asked for it to be exclusive, or a paid extra.
So we’ve got plugins, but we’re also essentially building almost an app store for your apps, which we’re calling add-ons, otherwise it gets confusing, so for example if you are Scamalytics – that’s actually a bad example, because Scamalytics comes built into the entire platform – but if it didn’t, you could basically have that as a bolt-on extra. So if you want to pay an extra £30 a month, then you can get these kind of extras, and we just click a button and then suddenly your app is protected or integrated with the add-on.
So would this open up the potential for non-dating third parties to implement add-ons for use in dating apps?
Exactly, so for example, maybe you’ve got an API that links into discounts at pubs – if you are someone who manages discounts at pubs, you can work with us, get your add-on put there and then we can send push notifications out to people that could say: “Hey, you’re out in Manchester on Friday, this bar has got this discount”. And what it means is that anyone can make plugins, and then sell it to anyone who is using M14.
This mobile app focus is something the biggest white label players have struggled with – what’s your view on the difference between mobile and desktop white label platforms, and how the two intersect?
It’s going to be genuinely so hard for them to adapt, because it’s a totally different model. We’ve come into this, and seeing what they’ve done – and they’ve done amazing work to get people comfortable with dating products – but their model is basically you click a button & you spin up another website. There’s already 50,000 of these websites out there, one more doesn’t make a difference, and their infrastructure basically copy and pastes, doesn’t worry about maintenance, and you just use SEO, pay-per-click, these handy funnels that everyone’s spent a decade polishing and you’re away.
That does not translate on any level into apps. Apple say that you can’t clone an app and release it again, and users are wise to that – you have to build something good and you can’t acquire paid users for free new apps. It’s because you can’t take a part of that old world and try to adapt it to mobile, it just doesn’t work.
Desktop websites are going to be around for ages – and you could use M14 to build a desktop site – but if you really want to capitalise on mobile and secure your future, you have to build a really nice app. You can’t cut corners, and that’s kind’ve the gap that we see with M14 – this is obviously the way the industry is going, and it blows my mind that no one built M14 two years ago.
Why do you think it wasn’t built?
There was no motivation. If you are running one of these massive networks of websites, apps are this completely alien thing and it would take millions to turn these oil tankers of companies around onto mobile, and mobile moves so fast, and is such different technology, that it just doesn’t work anymore. And they’ve got these huge legacy problems of just how do you do that.
So you could take M14 and if you popped us in one of these large white label providers, we could do it fairly quickly, but it’s because we’re coming at the problem from a completely different angle. But also, these large affiliate networks, they just generate millions of millions of pounds, kicking out millions over here, millions over there, so why would you want to spend millions of pounds adapting your tech to work on mobile – the motivation just isn’t there.
Because we don’t have that legacy, we’re able to just come in and say: “You’ve done amazing work in the last decade or two, but we’re now coming at this from the millennial angle and apps and rebuilding it. And the only position you could build a modern white label dating platform from, is if you’ve already built your own mobile dating app. Because otherwise you just don’t have the knowledge in that space, and it just falls on its face.
And most people who’ve made their own dating apps fail, because it’s really hard, and secondly didn’t build it in the first place to be white label. I mean everyone talks about how startups are hard work, and they are, but they’re also a lot to do with luck – we saw the opportunity and were in a position where we could take advantage of it and move into that space.
Do you think the largest white label players will see you as a big threat?
I like to think of them as frenemies! But no, we’re different businesses. So on the surface, we look like obvious competition to them, but when you actually drill down into it, it’s like well, not really, what are we going to do? We’re going to take their app-focused business away from them? We’ll probably end up working with a bunch of their partners, just with regards to numbers & if we end up working with enough people in the dating industry.
It’s more that it’s interesting the positions that we’re taking, and I think there’s room for it all, and I should be a ruthless businessman and say we’ll buy them in three years time, but realistically, I think we’ll learn a lot and it’s all about collaboration if the industry is going to survive and not just get completely decimated in the next three or four years.
Do you plan to use M14 to have databases that cross over between the various partner apps?
Well that’s another area where the white label setup just doesn’t really work with regards to mobile. If you’re on Bristlr, and you start a conversation with someone, you’re gonna talk about beards. Now if we’re sharing a database with people who love coffee, it’s just not gonna work.
We currently have completely separate databases, but we will have the feature for merging databases, but it’ll have to be opt-in on the partner level, so if you’re running Vegan Dating and you’re chatting to the guy from Red Meat Lovers, you’re obviously not going to share that database.
But if on you’re Vegan Lovers, and chatting to someone on We Love Cake, for example, then it would make sense to do it, but you’ve gotta think about it from the end user’s perspective. So you could have a pop-up message saying: “Just so you know, this person is using Vegan Dating”. So you make people aware of it so you’re not surprising anyone with anything, because that’s a completely alien concept in apps – that you can be talking to someone who is using a different app.
And our platform makes that perfectly possible, but our part is making it so users actually embrace and enjoy that, and there’s plenty of ways around it. But we’re not doing it from the beginning, because it’s really hard, and because we’ve yet to have a partner request that feature.
So with monetisation on the platform – what sort of strategies does M14 offer with regards to payments?
It’s fully customisable. So right now, built into M14 is a subscription model, so a freemium subscription model – so you say: “I want people to be able to see who likes them, and I want to charge £9.99 a month for that.” And you can say what’s premium and what’s not, you can choose how much you’re accepting, you can choose international payment options, or you can leave it all as default.
In the future, we want to add those micropayments – so let’s “super like” this person and pay 60p for that, and the nice thing is that we can then share our data of what works and what doesn’t with all of our partners. Because if we discover that “super liking” generates people £3,000 a month, it’s in everyone’s best interest that everyone knows that.
And also by the same token, if a big dating app releases a feature you like, you can add it and build it for your partners?
Yeah exactly.
With regards to revenue share, how does this work?
It’s different between partners, and what we’ve discovered that’s fascinating is that people who’ve come from the white label background are really happy with just a percentage revenue share, but people who come from more of an entrepreneurial thing absolutely hate that, they’re just like: “no one will invest in our company if we’re giving 30% of our revenue away”, so they’re looking for more of a tiered thing where it’s like x thousand for up to 100,000 MAUs kind’ve thing – so we’re still being flexible with that.
The early access program started at around £799 for a setup cost, then a 70/30 split, so we take 30%, and as far as we can find, that’s the best industry standard that’s publicly available, so we just went with that.
Then we also charge a low monthly fee of a few hundred pounds, with add-ons, that allows us to do customer support, allows us to keep the servers warm – it’s a bare minimum & we expect all our partners to well exceed how much it costs. But we really want to make everything completely transparent in exactly where our motivations are.
Because most of our money with partners, and we’re very transparent about this, most of our money from partners comes down the line, with like five years of revenue share, so it’s actually in our best interests to give our partners the best chance we possibly can to help them be a success. Because if they launch and fail, it sucks for everyone. Including us.
Do you have any other benefits for partners?
Well we want our parters to be able to bounce ideas off each other, so we’re going to have a chatroom for all partners – so they can reach us really quickly, and we can reach them, and they can also talk to each other. So partner 1 might’ve just discovered by making this little change, or by tweaking this thing, it really helped, and then all the other partners benefit, and benefit off the back of that.
And I’m just really keen to drive home this transparency, consistency and trust with our partners – it’s how we build our team internally, it makes me happy, and I’d love to see it used wider in the industry.
Are you looking at focusing on any other areas outside of dating?
The thing with M14 is we’re focusing on dating for now, because it’s where we’ve got the most experience, but there are so many new social avenues that people are going down. So we’re starting with dating, but in maybe a year’s time, we’ll probably branch out and do more social. Like if you made an app that connects anyone in any way, M14 is going to be the most obvious and simple choice.
The eventual aim is to store anyone, store any thing, their favourite kind of book, where they like to travel, all that social graph data, and match them in any way with anyone else. We’ve got a roadmap that lets us do that, that is ludicrous and frankly terrifying. And we think we’ll have that in the next six months.
Find out more about M14 Industries here.