How I started A Dating Empire

Back in 2001 after my birthday someone in the office introduced me to online dating sites.  I went back to my desk and checked out udate.com and kiss.com and lavalife/web personals.    I was bored and I wanted to chat with people.  I was really annoyed when I found out you had to pay for everything, I ended up telling the girl who introduced me to the sites that I could do better and make them for free, so I went and registered Plentyoffish.com.    All I ever ended up doing was creating an index page and forgot about it.

Fast forward to 2003,  I had been jumping jobs every couple of months from one sinking ship to another.   I had just joined a new company with 30 employees on Dec 1^st of 2002, by the time Feb rolled around 15 people had already been laid off and I started to worry.  I started thinking about finishing my site and learning asp.net at the same time and I wondered why people didn’t come rushing to join.   I quickly started building my site and actually made it somewhat functional although most pages where in asp, others in asp.net.  Somehow I ran across this site
http://www.cre8asiteforums.com
,  once there I was introduced to the concept of SEO, boy did that open my eyes.  I started exchanging links with everyone and anyone and finally got a bit of traffic.  Then I sat back and waited for the famous google dance, the once a month update.   At the start of March google updated and I got pagerank,  but still not much traffic and I made my first post here asking for help.

At the start of March I had ~40 members my site was running off my home machine,  people where complaining I didn’t allow image uploading  so by mid march I had added image uploading.  You can see how absolutely horrible the site looked here.    By the end of March my site went viral and started growing 2 to 5% a day and it was off to the races from there.  I was still developing on the live site/home machine and I always prayed nothing would crash.

Then at the end of June Adsense came out up until then I had no real way of monetizing my site.  I had a single affiliate program but it didn’t even make $40/month.  I went and  added Adsense pretty quick,  I made a whole $5.63 cents my first month, but that was more then enough for me to realize that I wouldn't go broke running the site and I could make a business out of this with enough traffic.  In my evenings I started working really hard on my site learning asp.net trying to convert my hastily put together asp pages to asp.net and trying to add more pages/functionality.  I was doing the Beta thing before it was cool.   I was updating/building the live site every couple of minutes,  if the site crashed I didn’t really care, only took a few seconds to fix it.

I once again complained in my thread about my sites lack of SEO results it was September of 2003,  I had 10k signups now and only a ~100 visitors a day from google and other 2,000 unique visitors a day from who knows where.    By the time October rolled around my site was rolling,  I quit my job at the start of the month and FINALLY went and bought a little server and moved my site to a hosting provider at the end of October.  Still can’t believe I ran my site off my home computer for the first 8 months. 

My short description leaves a lot out,  but basically I spent every waking minute when I wasn't at my day job reading, studying, and learning.  I picked out "enemies" and did everything I could to defeat them which ment being bigger then them.   I refused to accept defeat of any kind, and I constantly forced myself to test new things.  I never tried to perfect anything it didn't matter if things didn't work 100% as long as it was good enough I would move onto the next thing.  In 2003 the dating market was growing 80% a year unlike the -10% in 2006 so growth was a LOT easier.  When 2004 rolled around and word of mouth REALLY kicked in and as they say the rest is history.

I look back now at how ill prepared I was,  I didn't know anything about SEO, Advertising, community and  I didn't even know what Venture Capital was.  Just goes to show you anyone can do anything. 

Competitive Intelligence and Counter Intelligence.

It seems far to many people are fixed on comscore stats.   Distributed via filesharing networks,  and adware those who accidently install it or don't read the fine print are the not regular net users. It seems though distribution has changed a lot in the last 2 years…

Alexa users are basically tech people,  to get a reach rank of 700 or so in alexa you need a grand total of 200 toolbar users a day.

1 comscore user on your site represents  300 or so uniques on their system. 
So the first question is  how can I inflate my rank to the extreme?

Send users to these comscore distribution points (Just a sample) 
http://www.relevantknowledge.com
 
http://www.opinionsquare.com/Home.aspx
,  
http://www.marketscore.com
    Note that most spyware companies flag  all incarnations of comscore as spyware.  Some major banks even block any user with comscore installed from accessing their sites.

How do you get a super inflated alexa rank like digg, digitalpoint etc?  Just send the users to the alexa toolbar download page.

I am the first major site owner to ever use Counter Intelligence, and in competitive markets I believe it is a MUST.  To stop alexa simply don't allow any user with "alexa" in the useragent visit your site or signup.    You can block most other tracking systems but i'll let you figure out how to do that

In highly competitive markets, sites like comscore can sell all your conversion ratios, your dailly transaction/signup figures etc.  Because they track everything  they know everything about you.   If you are a new competitor entering the market you are severly handicapped as everything you do is basically free R&D for major sites.

Which traffic measuring system is the most accurate and hardest to fake?   

That would be hitwise.com,  every night they get logs sent to them from ISPs that track over 20 million internet users.  Ie your ISP gives them their dially traffic log of all users.   The only way to mess with their rankings is to buy up a ton of traffic on ISP's that feed them data.

If counter intelligence or competitive intelligence isn't on your mind, you can bet its on your competitors.

Newspapers 2.0 $75 billion online business model.

Short Answer:  Adsense for Realestate.

The following MSNBC article says there are  6,760,000 homes sold in the last year for an average price of $223,000.  The average commission on a sale of a home is 5% or $11,500 per home.  6,760,000  homes *  11,150 commission = $75 billion in commission

The affiliate marketer in me says that realtor.com should create adsense like product for realestate.  If someone clicks on an ad and as a result places a call, or emails an agent all that can be tracked and recorded.   If a sale takes place as a result of the click the referring website should get a cut of this commission.  

Newspapers are the companies best positioned to take a huge chunk of this market,  other companies like zillow.com  would be worth billions overnight.   Given that I have hundreds of thousands of unique visitors a day It does not seem outlandish that a site like mine could sell 2-5 homes a day  which would by far out monitize what adsense pays, and my site has nothing to do with homes. 

So come on Google, Yahoo, Realtor.com etc   Who ever builds this first send me an email I want to be in the beta.

Rocketboom is not making $85,000/week.

I call bull**** on the rocketboom comment made by Robert Scoble, I have yet to see a single video on rocketboom with an ad on it. I know they went and auctioned off their first ad a while ago.   Robert claims Rocketboom has 300k pageviews/day  and makes $85,000 a week, which translates to $41.00/CPM

I think robert meant this was more of a one time thing ?    The site currently has no ads that I can see.   Someone correct me if i'm wrong.

***UPDATE***

Rocketboom says 85K/week is rate card for huge companies wanting to advertise.. Rocketboom blog.

Viral Marketing, Why Sites Get Huge.

Ever wonder how Myspace, friendster, facebook, Plentyoffish.com etc got so big?  It all comes down to viral marketing.   If you randomly ask 10 at some point in the day if they would use your product and 6 of them or more say yes then it will be highly viral.    Myspace took off because 6+/10 would say yes when you visit a high school.   Facebook was the same thing except in university.  Digg.com would get a yes answer if you asked people working in tech companies.  In summary you need a high concentration of people who need your product or service.   This is how large mainstream sites are born.

To many people in the “web 2.0” world are running around wondering why none of the products there ever go mainstream.   I think the answer is simple.    Techcrunch is the launching platform for new web 2.0 companies and is amplified by digg.com which reaches a few hundred thousand tech people.  Those 2 companies combined have created a “virtual world” that reaches 50%+ of tech people.  You can reach 50% of your target market in 24 hours, is there any other community on this planet where you can reach that many people that quickly?  Now if you launch a product like a news reader, or something that 6/10 people of that community will like, it will spread like fire.  The problem is that outside of this virtual world there is no point during the day where more then 6/10 people care, hence no viral adoption in the mainstream.

Now it seems some people want to push new age marketing crap like Pinko Marketing to get viral.   Companies like Riya got big  because they got featured on techcrunch a few times,  got on digg a few times and created some fake buyout rumors.    This allowed them to effectively reach hundreds of thousands of tech people, who were very interested in this Photos.  These users had flooded to fickr before and now they poured into Riya.   The whole concept of being part of the community etc etc is all bs.  Like in the offline world people will use your product because its cool and it will go viral, no amount of spamming community sites is going to help you.    As for listening to your community and implementing everything they ask for is a sure way of running your company into the ground.   99% of people who use your site are going to use only the most basic features or functions and they don’t want more stuff.  If you start adding features and functions to keep the extreme 1% happy  sure you will make them extremely happy but you will piss off a good 30% of your users because your product has now moved to far away from what the mainstream wants and as a result your word of mouth will die.    

 

So what is the different between marketing in 1999 and today?   In 1999 you spammed everyone,  in 2006 you spam communities with a high concentration of people that are interested in your product or service and you buy adwords for queries relating to your product or service.   If you are a A-list blogger  you can constantly blog about companies you own/work for and provide endless link bait for reporters trolling  techmeme.com, techcrunch and digg.com Myspace Killer……  If I had to come up with something I would say clone myspace and only allows High School bands on it.   That would so much more viral then what, made myspace big.

Microsoft Asp.net 2.0 Performance.

I came across this article today about digg.com's server setup. Digg.com is doing 200 million pageviews a month and has 3 webservers and 8 database servers. 

Dating for the most part has been a brutal industry in terms of hardware required. AmericanSingles Quarter filing shows just how bad it is.  34 person development staff, and another 30 person team to maintain hardware and software infrastructure. In total americansingles.com has 202 full time employees, in another filing it states they have around 200 servers. This results in over 1 million a month in tech/software expenses according to the SEC filing, not bad for a site that has less then 200 million pageviews/month,  note that lavalife, match.com and anothers have similar numbers.

I didn't know any of this when i created my site. When I created my site I started it in Asp.net 1.0  because I needed to learn it if i ever wanted to work at a decent job.  Asp.net 1.0 worked fine until I got around 12,000 concurrent connections. 

At this point there were a lot of concurrency issues,  the site would slooow down and just keep getting slower as more people came on. After switching to asp.net  2.0 all those problems went away.  Now when there are over 32,000 concurrent connections at peak the site does not slow down.   There are however still problems.   I find that once you pass 100 Pageviews/second threads timers start to not get called for no reason.

I've attached some stats that show plentyoffish at average usage.   The site(plentyoffish.com and Forums.plentyoffish.com) serves ~500 million pageviews a month and does so using 1 DB server and 1 Web Server which is a far cry from the industry standard of 300+ servers for a site of this size.   The system peaks out at 32,000 concurrent users and 440+ pageviews/second sustained.   Pretty much all my performance problems come down to the fact I do radius based searches on nearly every pageview and match people based on their preferences and the preferences of the users being searched on.  These screen shots show average usage of the site, about 50% from peak.  I am using dynamic GZIP compression,  every outgoing page is compressed on the FLY using the built in IIS 6.0 compression, its one of those features you turn on by messing around with the metabase.   This reduces my outbound traffic by about 60mb/sec.   I also have 1 mail server and 1 Image server.

I find that asp.net gets looked down on sometimes,  But for me it more then holds its own and there are no real show stopper issues.  I am sure that Robert Scoble will love this post, as it gives real world performance stats, or maybe not now that he has left Microsoft.  For me I'm just happy that asp.net works and It doesn't give me problems so i can focus on important things like increasing traffic.

How to make a lot of money online via adsense.

There are many ways to make money online,  the trick is to pick an area where you can grow virally.  In markets like online dating it is completely packed and no new players have any real chance of competing.  True.com has spent well over $70 million the past 2 years and gone no where,  the main problem is 30% of your user base leaves the site every month and you need huge word of mouth to sustain membership.  Without viral you have to spend $6.00+ per free signup and there is no way to make that kind of money back via adsense.

There are still a lot of makets you can enter where you could generate 20 million a year plus from adsense.   The only problem is that you have to be 1st.  If you are late to the game you need to buy your way in, and that rarely works.

1.  A free monster.com clone,  maybe with a ebay like reputation system.

2.  A social networking/ stock/money portal with a built in digg.com clone to highlight user generated "research reports" or "articles".

3.  (adsense for search) Sites that distribute toolbars,  google is making over  $30+ a toolbar user per year.  The major battle these days are all about toolbar distributions as they are such huge gold mines.  You can create a massive online empire like websearch.com did via funwebproducts.com (its their secret "toolbar install")   13% of my US traffic has their toolbar installed.   (Askjeeves.com bought them)   The lesson here is give away products for free and make hundreds of millions via toolbars.

4. A travel site that lists the top 10 destinations in each city with a breif description about each.  The site would be built on a digg.com like structure and focus on finding great vacation spots/ destinations.     Sort of a trip advisor site taken to the next level.

These are just ideas I came up with in a few minutes,  there is so much money out there to be made,  but so few people are really going for it.   I think its time people stop hyping web 2.0 crap and start promoting real ideas that have real business models.

Small Companies & Google Adsense is the future

I was poking around alexa today
http://www.alexa.com/site/ds/top_sites?cc=CA&ts_mode=country&lang=none
 and saw that Plentyoffish is now a top 30 site In Canada ahead of all other dating sites.  
http://ranking.websearch.com/SiteInfo.aspx?url=plentyoffish.com
  (Ask.com's  toolbar network)  puts me in the top  43 most viewed sites on the web.    In the bigger picture  Plentyoffish.com  is neck in neck with yahoo personals and still a ways behind match.com.   It amazes me to think that my 1 person company is able to compete at a level where all the competitors have 600+ servers, and 300+ full time staff.  I feel like I am ahead of my time,  and when I look around at the companies out there today I have a hard time seeing them existing in a few years.  I believe that in a few years 2 or 3 person companies will replace companies that have 40 or 50 employees.

 I sometimes wonder if i'm crazy for not going paid, and passing up 100's of millions a year in revenue.  But i created this site to change the world, and make money at the same time.   I may not make  $20 million a month like the other sites my size  but google pays me good money    My effective CPM (under $1.00) may be very very low,  but when you have a site this huge  it really ads up.  (My girlfriend is holding up the cheque, its for 2 months as googles EFT bounced.)

Any Idiot Can Make millions off Google.

PPC,  which stands for Pay Per Click is making a lot of people very very rich.   The surprising thing is that very few of the top earners have much in the way of a computer background.   I have taught a lot of people how do PPC and the ones that have the most success are the ones with the most patience and drive.

Here is how it works, when you do a search on google the right hand side contains paid listings.  If you search for the term "online dating" all the ads you see on the right hand side are from people bidding on the term online dating.

How do these people make money?   Well there are many affiliate networks out there that will pay you to promote products and services.  My favorite networks  are ones that pay per action, ie someone just has to give their email address or phone number.  This lead pays out $5.10 for anyone that fills out the form.   This singles Cell phone offer  is a offshoot of a ring tone offer,  you get paid $12.00 for every person that enters their cell phone number.

 Here is a sample of a google Ad which you place by signing up here www.google.com/adwords,  you pick a list of search terms you want this ad to display for and the max price you want to bid.  You then direct traffic to a link  provided by an affiliate network. 

Googe Ad 

Sample Affiliate Network listings of offers you can promote

Sample Pay Per Lead Affiliate networks.   Azoogle and Primaryads

The max  you can make by yourself doing  PPC ads  is around $100,000/month  this is the point  where you replace ads as fast as you can create them.    There are many hot offers like ring tones  that only work for 6 months or so before they are replaced.  Also competition may drive up prices and its no longer profitable for you to bid on those terms.

If you have your own website  affiliate networks are great.   If don't have many users (under 30,000 uniques/day) and they are all focused on your subject area a good rule of thumb is you can make $2.00 off affiliate ads  for every dollar you make off adsense.

Looking for inspiration?  Many of the sites that show up in the non paid listings in google for travel, credit card and drug  are making over $10,000 a day 

For even bigger inspiration  check out ebay. 
http://affiliates.ebay.com/affiliate-community/news/
 

eBay Affiliate Earns over $1.4 Million in One Month!
eBay's largest affiliate earned over $1,400,000 in February '04 commissions, $1,300,000 in January '04, and $1,000,000 in December '03! eBay has made several of our affiliates millionaires, but never before in a single month! eBay's top 25 affiliates average over $100,000 each month – well over $1.2 Million in annual earnings
 eBay's top 100 affiliates earn almost $25,000 each month – that's nearly $300,000 each year

Are Designers Clued In?

Ever since Scoble posted this post a debate has been raging about anti marketing design. It looks like the debate can be broken down into 2 sides, Designers are calling this BS.  My experience is that what users say they want and need has very little to do with what they really want.  There is no place this is more then true on Plentyoffish.com,  the information people enter in their profiles telling others what they are looking for does not correspond to what they actually use the site to search for.  

Why anti-marketing design will win or not win over pretty designs.

1. When it comes to sites dishing up commodity products the users ONLY want to use or consume the product.  Users don't want to be distracted by useless graphics, colors, features etc.   When you buy spoons from a place like walmart, you just pick them out of a big box of spoons. They don't come with a mountain of packaging, they don't come with manuals, and most of all they don't come plastered with pretty graphics and a "beautiful layout".   Search is a commodity, social networks are a commodity, and beautiful does not work for online commodities.

2.  If you want to sell status and power then you need to have a beautiful site.  Companies sell things like cars by playing off peoples insecurities, having an "ugly" site would make it very hard to sell luxury items.

3.  Anti-marketing design screams authenticity,  the content is far more important then the design and as a result sites designed like this bring in way more money then "pretty sites" when selling low end items.  There is no better example of this then the 1 page site that is really a 75 page sales letter.

I think the biggest problem today is that many designers are designing for their ego and not with the end users in mind.   I can understand that no one wants to make "lame bland" looking sites and as that would make their job extremely boring.   But at the end of the day who cares about how beautiful your site is if it doesn't make any money and no one uses it.