By asian-dating, people usually mean people who's families originate in the Indian subcontinent (Pakistan, India, Bangladesh), but living/born abroad.
People think they see a gap in the market. In India, 'dating' is culturally a bit of a taboo. There is a long history of arranged marriage, which continues to this day in many families. Things like kissing in public are generally frowned upon. So it makes perfect sense for young Indians who don't like all this stuff to go online to create the love life they want. I have no first-hand information about Pakistan or Bangladesh, but I guess it's similar. Also of course some people want to date/marry within the same religion and/or culture, so that's another big motivation.
However, it has been tried many times before. There are 23 million results for “asian dating” on Google. Obviously this is for a range of different sites and content, but many many asian dating sites exist.
It seems that there must be a lack of significant market penetration amongst these sites because businessmen/businesswomen don't seem to be aware of them, and therefore think they've come up with a great fresh new idea. I just had a look at the biggest one in the UK. In our city there are 17 women on it and 34 men, and that's without me making any attempt to filter it.
(Yes, my Internet history will now show people that I've been looking at some interesting things)
I don't know exactly why these sites are not successful. I might guess that cultural taboos are fading, or that asian people don't want to segregate themselves through their own websites, or that the market is too small, or that minorities already have small and strong communities with as much connection as a website could build. (Personally I hope people don't want to segregate themselves, I'd rather we were all just people, but that's my personal opinion only.)
The big point though is that this all illustrates that people trying to start new .com businesses aren't following the most basic business advice. I was actually aware of the asian-dating website issue myself before anyone came to us about it, and I have no particular reason to know about it more than anyone else. A quick Google would show that there is a lot of competition. We had one prospect come through to us, and we politely explained the competition to them, gave some advice, and asked what their USP was: the project was put on “indefinite hold” (i.e. immediately cancelled).
We also have people coming through all the time wanting to make worldwide .com travel businesses, and a similar point applies: where is the USP? There is no way an upstart is going to be able to compete with travel players who have 15 years of experience and market penetration, an established infrastructure, and economies of scale.
So the conclusion is that there are two very basic pieces of advice that you need to follow early in the planning process for a .com business:
- ensure that the gap in the market is real
- ensure that you have a USP (unique selling point, also known as 'differentiation')
- A Youtube for <insert market>: If the primary action on your site is viewing videos, you are going to likely have bandwidth costs far in excess of what you can make back through a low-cost subscription or advertising. Youtube has economy of scale and would have gone broke if Google had not bought them. Of course, video sites can work, but just not with most of the .com business models we hear about.
- Online marketplace with credit card transactions between users: Credit card processing is risky, complex, and expensive. It's bad enough just implementing for a basic checkout system: if you're trying to make a merchant community using it then you'll easily be in the six-figure development cost region.
- A Facebook for <insert market>: Facebook is an incredibly complex website running a lot of fancy technology, with a user interface that will on it's own cost countless millions of dollars. On a superficial level it looks to be just a bunch of features, many of which ocPortal has out-of-the-box (as do “Facebook Clone scripts”), but the reality is very different. It's fine to make a niche social network (as long as people have a compelling reason to be there), but please don't think you're going to be on par with Facebook on features.
Entrepreneurs also often have a habit of being a bit overly-optimistic about how things will scale. For example, it's great to provide a high level of service to users, but if you're making a website where money is made by skimming very small value transactions (like eBay, Google, or Amazon) then you'll never be able to afford to provide regular one-on-one help to all your users (and of course, these companies don't, and people look on that poorly but there's no way it could happen). It's very important to think these things through. What if Google did not start up with “Do no evil”, but rather “Be one phone call away from customers at any time” - it would have built unsustainable expectations that could never have been tossed out, leading to quick business implosion.
So in summary, think things through when starting a .com business, don't just jump in straight away on what seems like a good idea.
This was article 3 of 8 in my "Entrepreneur reality check" series of blog posts.
If you think it's good advice, please share this link with others. If you think I'm wrong or have something to say, please discuss below.