Sunday 02 February 2014 10:40 pm

Getting to the heart of online dating

Annabel Palmer talks matchmaking with Lovestruck founders Brett Harding and Laurence Holloway

ONLINE dating has come a long way since kiss.com and match.com – widely believed to be the first major dating websites – were registered in 1994 and 1995 respectively. Today, it is one of the most popular ways to meet a new partner, with over 1,400 sites in the UK alone. With Boxing day the industry’s busiest day of the year for online activity, and Valentine’s Day fast-approaching, the founders of Lovestruck – a premium hyper-local dating site – have had a busy few weeks.

The business was founded in 2006 by Brett Harding and Laurence Holloway as a London-based site with a location-based unique selling proposition (USP). Originally named London Lunch Date, it matched City professionals with others who worked nearby. “I was trying online dating and often found myself trapped on a three-hour dinner with someone I knew I’d never see again. It was a waste of my time and money,” says Harding.

At the same time, he was consulting in Canary Wharf on behalf of the Forward Group, the advertising agency where he was working as an account director. It struck him that, with 100,000 professionals in a tight-knit geographic location, the area had huge networking opportunity. So he founded an online lunch-dating site (because “work was the perfect exit clause”) targeting that demographic. He then approached Holloway, a colleague at Forward, to code the site.

RED HERRINGS
Back then, the notion of online dating was “stigmatised”; today it is commonplace. With the growth of the industry, however, came fierce competition. But the hyper-locality and lunch date concept set London Lunch Date apart, enabling it to penetrate the market and achieve profitability just a year after inception. Its “rudimentary marketing campaign” consisted of the founders, with a team of leafleters, bombarding tube stations in Zones 1 and 2. “Critical mass is different for each product, but for a dating site it’s that point where the conversion rate from registerer to subscriber has taken a significant uplift – it’s the point where you convince someone that there are enough people on the site for it to be worth paying for,” Harding says.

In the end, however, the lunch date idea was a red herring. The pair were constantly analysing the industry, and quickly realised they were alienating a big sub-section of the market for whom lunch dating wasn’t an option. “Most people wanted to meet after work.”

So the business model was overhauled in 2007, renamed Lovestruck, and pivoted to become a more generic dating offering, albeit still with the hyper-local USP. “Most of our base were living or working in Zones 1 to 4. It’s much easier to build a critical mass in a small area when you have a finite amount of money. If we had been given the budget to expand across the UK, Lovestruck wouldn’t exist today.”

FUNDING BREAKTHROUGH
Initially bootstrapped with a six-figure sum of Harding’s own personal wealth, by 2008 it was clear the founders had taken that investment as far as they could. So the pair spent a year on the investment circuit, presenting to a number of angel investors. It wasn’t, however, until Seedcamp 2009 that they achieved breakthrough, piquing the interest of eight tech angels and one early-growth venture capitalist – including TrustedReviews.com founder Hugh Chappell and former Dennis Publishing chief executive Alistair Ramsay – to garner £285,000 in funding. Lovestruck will seek further investment this year.

The £285,000 enabled Harding and Holloway to quit their jobs, with over 90 per cent of the budget spent on marketing. They introduced Tube ads, and in 2010 launched a mobile phone app. “We had spent three years learning exactly what forms of marketing did and didn’t work. It gave us first-mover advantage in the mobile space. And because we were hyper-local, mobile massively worked to our benefit.”

TOUGHING IT OUT
The company was rolled out across the UK last month, and saw revenues of £2.3m in 2013. It now operates in Hong Kong and Singapore, with 500,000 subscribers across all three territories. It appears Lovestruck has secured its place in the heart of an ultra-competitive market, although the pair admit that competing with larger and resource-rich companies can make it tough to have their voice heard.

But an arguably greater threat will surely come from the rise of apps like Tinder – matchmaking apps that are also hyper-localised – which as of September 2013 was being downloaded 10,000 to 20,000 times a day. The pair are dismissive of this disruptive new entrant, however. “It’s a frivolous service – I’m sure that at least a quarter of people on Tinder just want to see if they’re hot or not,” says Holloway. The pair believe that, while uptake has been significant, the likelihood of meeting someone is 10 to 20 per cent of that on Match or Lovestruck. “When you put in a paywall [£35 a month, in Lovestruck’s case], the propensity to want to meet someone dramatically increases.”

LOCAL AMBITIONS
Despite Lovestruck’s growing international presence, the founders’ ambitions for 2014 remain UK-focused. This year, they hope their offering will become one of the top three names in Britain (it is currently fourth), and eventually, they hope, number one. So after six years in the game, what advice would they give to budding entrepreneurs? “If you’re moving the ball forward every day, then no matter how small that move is, you’ll be on the path to success. You have to be resilient and just keep going,” says Holloway. “Don’t be worried about sharing your idea,” says Harding. “It’s very unlikely it’ll be a new one. The more you share it, the more honed it becomes. Building your own company is more about the execution than the idea – that’s what separates the winners from the losers.”

As for their own romantic destinies? Holloway met his soon-to-be wife a matter of weeks before Lovestruck launched. Harding’s best friend found his wife through the site. And Harding? “I have used it myself, yes. It’s worked.”

http://www.lovestruck.com/uk/

CV BRETT HARDING
Company name: Lovestruck.com

Founded: 2006

Revenue: £2.3m (2013)

Job title: Co-founder and managing director

Age: 41

Lives: Shoreditch and Leicestershire

Studied: Business studies at Nottingham Trent

Drinking: Negronis

Reading: Twitter

Heroes: Steve Jobs, My mum

Most likely to say: Don’t put a beard and glasses on it