Love, Logic, and the Future Part Two: Venture Driven Growth at the Intersection of Love and Innovation

Last week's article focused on dating and AI, highlighting the Bumble fumble and emphasizing the need for strategically using AI-driven innovation to improve the consumer experience. While I have moved on, it seems the streets of our internet are still salty and taking it out on the top dating apps. Now before we don our best black gowns as well as our oversized sunglasses and join the funeral procession. Let's take a look at the data, because some of us trust Wikipedia as a credible source while the others trust online quizzes to accurately determine our personality traits based on our favorite ice cream flavor.?

Dating apps remain popular regardless of gender identity? with Bumble and Match group, which owns Tinder? and Hinge, taking the lead. In the US alone nearly 30% of adults use them to find partners, friends and everything in between. In fact the market seems very saturated to the untrained eye with over 8000 dating? apps worldwide, all competing for you to give them a chance. The online dating market is also growing with projections indicating that the global online dating market is poised to reach a revenue of $3.12 Billion by 2024, with an anticipated annual growth rate (CAGR) of 2.62%, leading to an estimated market volume of $3.46 Billion by 2028 and $3.56 Billion by 2029. Further by 2028, the Online Dating market is expected to have 452.5 Million users globally, with a projected user penetration rate of 5.7%, up from 5.1% in 2024. The average revenue per user (ARPU) is predicted to be $7.90. For the top player revenues; Tinder in 2023 saw $1.9 Billion in revenue, an increase of 7% from the previous year, closely followed by Bumble with $1.05 Billion, an increase of 16% from the previous year.?

Why then are the pitchforks out? It is not just random internet slander with dating apps catching stray bullets, leading to drops in quarterly revenues. There may be something deeper stirring the pot. There have been challenges with the dating experience- from bots to scams and creeps to unsolicited peeps. Some of which can be solved with technology and the rest of the issues pointing to us… Wait… Pointing to you, I bowed out of the dating game. While women may now be the loudest voice, the dissatisfaction with dating apps has been constant, mixed and on the rise.? A quick read of the shareholder’s report tells me that the companies know this, but seem to struggle with finding the solution.?

The challenge, without going too deep into my primary and secondary sources, is a deep sense of loneliness caused by difficulties in establishing quality relationships. When people are lonely, whether psychological, social or existential, their risk of anxiety, heart disease, dementia, stroke, ?and depression increases. This impacts mental health and quality of life, affecting longevity in a manner comparable to smoking 15 cigarettes a day. So things are pretty high stakes and quality often varies from person to person.?

While variety and niche connectivity seems to be the solution, some studies suggest that the quantity of dating applications and connectivity solutions are exacerbating the very problem they are meant to solve. We could all choose to virtually picket against all dating applications, and accuse them of gamifying the process or burdening us with the paradox of choice but instead we can view this as the market signaling a gap, which in itself presents an opportunity and challenge.?

Here then lies the point of inflection. Where does one go when they are the biggest players? First a congratulatory remark to Match Group and Bumble, who in reality are the main targets of this article. You have emerged as the biggest and the best. All of us have dressed our best and swiped right on you.? You will likely continue to grow in the near future and in the case of Bumble, overcome the latest messaging hurdle. What next?? The market has shown a willingness to pay for the loneliness problem. We pay for and subscribe to a variety of connectivity solutions from dating apps, to events, to the largest social media networks. While acquisitions are certainly one path, they are expensive and not nearly as diversified as the different ways in which we all experience loneliness.?

I see this as an opportunity for the larger players to strategically diversify from the niche spaces; just as Google did with Alphabet and further with their corporate venture arms. In fact this is not even an innovative remark. This is a well known and worn down path followed by players like Samsung, General Electric, Walmart, British Petroleum, as well as Johnson and Johnson.??

The creation of a corporate venture arm allowed these modern day giants to develop a strategic path of innovation culminating in a build, buy, partner or invest directive. Further the development of corporate venture arms is the modern day equivalent of not putting all of one’s eggs into one basket. In fact, it allows large companies to put some eggs into their competitor’s basket, their neighbor’s basket and even occasionally hatch new baskets altogether, diversifying their portfolio of innovation and securing a foothold in emerging markets and disruptive technologies.? A corporate venture arm targeting loneliness would not only offer a path for market expansion, its core message would be transformational for the corporations that choose to participate.?

Why Loneliness ventures? This name by the way is not trademarked yet in case anyone wants to hop to it. When we think of Tinder, Bumble or any other dating app, we, or more accurately 84% of us are looking for real connections, to solve some part of our loneliness. The most vulnerable parts of our loneliness, while presumably the other 16% want to see the world burn. ? Hence the love-hate relationship with dating apps, the continued increase in revenue, the increased market growth rate and more exhaustingly the unending number of players in this space, all competing for the consumer, and competing for the top seat currently held by Match Group and Bumble.?

I do not claim to be a prophet, and if the biblical treatment of prophets was anything to go by, it is not a title that anyone should claim too easily. I only look at the data, see past trends and apply them across multiple industries. Consider the automotive industry, where companies like BMW and General Motors have established corporate venture arms like BMW i Ventures and GM Ventures, respectively. These arms have enabled them to invest in disruptive technologies such as electric vehicles, autonomous driving, and mobility services, staying ahead of the curve in a rapidly changing industry. Similarly, in the retail sector, Walmart has launched Walmart Global Tech and Store No. 8 to drive innovation in e-commerce, supply chain management, and retail operations. These examples demonstrate that developing corporate venture arms is not only prudent but essential for large leading companies to remain competitive and foster innovation in today's dynamic business environment.? While loneliness may seem to be a strange space for corporate venture, and even stranger space to attempt to solve for. The myriad of solutions and opportunities in this space will always persist long after we innovated past the need for cars, the use of oil and any other products that are in common use. Loneliness will exist as long as there are humans and their solutions will vary in number catering to the many personalities, tastes and preferences we hold.? The only question for Bumble and Match Group is- Will you remain one of our options for us to swipe right or left on, or will you rise higher to strategically own the catalog of solutions? Will you remain part of our options or arm yourself with the tools necessary to redefine the industry???