Platforms love friction – why online dating is a red ocean

TL;DR Platforms owe their very existence to friction – BookMyShow charges a fat fee because booking movie tickets directly is impossible. Platforms like MakeMyTrip or Tripadvisor are unlikely to get disrupted by a BETTER booking engine but see margin erosion due to a tech company or jugaad workflow reducing friction between the customer and the service provider. Their nemesis is mostly likely Razorpay just like Tinder’s potential nemesis is ClubHouse, Fortnite or ANY popular platform with a chat function – such as Reddit with its super niche interest groups

Travel Portals vs Payment processors

Payment technology is what MakeMyTrip should mortally fear – the Razorpay ONE click payment webpage is SO easy that you no longer need MMT for mid to premium hotels – you find the best hotel on TripAdvisor, check their price via Ixigo, call them via Google Maps. This saved me a cool 25%+ off on a recent booking. Can MMT do anything? Precious little till they copy OYO’s strategy of buying capacity & branding hotels & changing Google Maps contacts to the OYO helpline. Of course, OYO prices are so reasonable we would not negotiate further with an OYO but I wouldn’t be surprised in bharat 🙂 (I’ve done it once in 100+ OYO visits!)

Razorpay can erode BookMyShow / Insider profitability

I am happy watching movies in 3 theaters within a 3km radius – I feel no need to go to the snazziest gold class experience. Now if these theatres have a QR code printed on their tickets or their website has a link to a razorpay seat selection and payment page, why would I pay the BMS premium?

BMS makes sense for discovering a wide variety of events in a city or area – but often if you patronize limited venues regularly (the erstwhile Canvas Laugh Club in Cyberhub Gurgaon for those who work there) – many would be happy bookmarking a Razorpay event page!

Online dating will face disruption from everyone else

The Match group is doomed to constant M&A to prevent value erosion – the moment a platform esp in India grows big, you get an influx of unsavory characters that the upper middle class educated woman of sensibility seeks to migrate out – whether to Bumble, or now Hinge (owned by Match!)

But here’s the thing – you can meet interesting people in any setting that pre-qualifies for interest and allows people to observe long range behavior, perspectives, depth of character before connecting. So gamers can meet gamers in Fortnite, VCs / techies meet in ClubHouse, fitness folks connect on Facebook groups.

Clubhouse is the new Tinder – a friend met her current boyfriend in a special interest room. In fact, right now since it has not opened up to the riffraff – the early adopters are often hard working techies, the demographic both of them belong to. Circa 2019, I had identified the explosion of chat features as the core reason why online dating is a red ocean business. Tinder is the exact opposite of candy crush – the longer you have to keep using the app, the more you get tired of it. The average person wants someone nice enough to go out with – swiping right seems easy but the effort to screen out psychos, align on shared interests, build a deep connection – drains a lot of mental energy.

Of course, the Match group follows the time-tested “studio” approach (hat tip to Pratyush Choudhury) – they own OKCupid, Match, Tinder, Hinge – no matter what be the dating app a user wishes to use, they will benefit. Zynga followed this approach with its -ville games , the most famous of which was Farmville.

With community & conversation being central to many startups – all of them will erode the profitability of the online dating business.