It’s an old story, at least for the digital age: young man graduates from college, uses his computer engineering degree to start a pay site in his basement, pay site grows exponentially and young man finds himself with a viable adult business and more money than he knows what to do with.
The anecdote has surely been told many times, but the Montreal-born Michael Maher didn’t just launch the typical T&A pay site from his basement back in 1996, he launched something almost completely unheard of.
And it’s here where the sameness of the story takes an interesting turn.
That’s because Maher had the foresight to begin one of the first adult dating sites, IwantU.com, which has grown steadily since its debut and is now poised to fully take off.
“When I started nine years ago people were telling me I was crazy,” says Maher, “and no one would date online; [they were] saying it was impossible because you couldn’t see the person or talk with them.”
Of course, that’s all changed with webcams, voice interaction and instant messaging enabling people to turn the web into their own personal singles bar. Now, particularly with the success of mainstream sites like Friendster and MySpace, no one thinks Maher is so crazy after all.
“Adult dating is becoming a hot subject,” says Maher. “The reason is because I think the Internet community has matured and they need something different — they need interaction. They’re looking for friends, an online community, and that’s why dating sites are booming.”
Booming not only in popularity, but also at the cash register. Adult dating sites currently have some of the highest conversion rates in the industry, most likely because of the tangible, er … product.
Even though IwantU has been online for nine years and has enjoyed success, the company is really just starting to make its big push. Although they’ve grown to 50 employees and three offices – Montreal, Costa Rica, and Seattle – until recently, IwantU didn’t even have a marketing department, which made it tough to get their name out.
“Before, we basically just had one person doing marketing and Michael did some and I did some, but that wasn’t a whole department unto itself,” says Keith Bussey, director of operations. “Now, we have an affiliate coordinator and a marketing director, three SEO people and some people who just build partner sites.”
As the story goes, the founding of IwantU was by techies having no real background in either the adult or marketing industry. Of the original four employees were a computer engineer (Maher) and an e-commerce developer (Bussey), along with customer-support and human resource directors. As a result, the site probably isn’t as big as it could be. Now there’s a nine-person marketing team, along with a program that has recently undergone a major upgrade by adding new features. Currently, according to Alexa rankings, IwantU is the fourth-ranked adult dating site, behind Adult Friend Finder, Eroticy and SexSearch.
“We consider Adult Friend Finder to be our number one competitor,” says Bussey. “The other programs we don’t worry about that much because we feel that with enough marketing, by the end of the year we can be number two to Adult Friend Finder. Then we can start attacking them.”
He added, “We’ve learned that with all their members and all their marketing, our inside paid conversion is still better than theirs. In many ways we can beat them – conversion wise, retention wise – but they just have so much traffic that they make it up with volume.”
To make up ground, IwantU launched Version 7.0 of their site in late February. The new version includes better navigation and new functionality, but more importantly, their infrastructure was greatly enhanced.
“The new site was built in a way to allow adding any feature that we can think of in a very, very easy way,” noted Bussey. “Adding niche sites takes no time. Adding multilingual sites will take no time at all. We’re built to be able to expand very easily. Infrastructure for this site was completely redone from scratch. We built everything from our hardware to servers to database to code — everything was redone.”
In addition to the new version, IwantU.com also launched a cobranding partner program, which effectively allows any site to have a personalized adult dating site. In early March, before the cobranding venture had been officially announced, Bussey had already set up 17 partners with their own adult dating sites, including Men.com, Singlescom.com, and WildSexAds.com.
The beauty of IwantU’s partner program, which is especially visible at Men.com, is because it’s completely customizable down to the URL. Partners have ftp access to the html, css and images and can customize them as they see fit. The Men.com dating site, for example, is almost completely indistinguishable from the rest of their site. On top of the added feature they’re able to offer, partner sites get to collect 70 percent of the revenue, get free hosting, and even free domains if they need them.
“I think this is going to be the biggest factor in terms of differentiating ourselves,” says Bussey. “The cobranding, private-label solution we have is the easiest solution available and offers the most flexibility.”
Recent additions don’t stop there. With 90 percent of their user base calling the United States home, the next step for the company is globalization. At press time, IwantU was translating their site into Spanish and French and working on adding direct debit payment options for European customers. Following that will be a foray into the Asian market.
“The industry is becoming saturated, so we must look for alternatives and must look for different markets,” says Maher. “The Chinese market, for example, is a market that is booming and that market has to be tapped to remain competitive.”
Furthering the push into Europe will be an SMS-based service utilizing GPS tracking, where users, like those overseas, with more-advanced mobile phone technology can search for IwantU members that are, say, a five-minute walk from their present location.
Throw in some new pay-per-email and pay-per-click sign-up options and, well, it’s obvious these guys have been busy. But resting on their laurels doesn’t appear to be in the picture just yet.
“I think I have 400 items on my to-do list right now for this year,” quipped Bussey. “We’ll definitely be busy.”
While it has taken IwantU nine years to get ready for their run at the big boys of the industry, along the way the company has remained competitive largely because of two factors.
The first being location, or relocation as it were.
Nearly two years ago, Maher picked up his operation and moved it from Montreal to San Pedro, Costa Rica, to reduce his overhead.
“In order to remain competitive and pay our affiliates what we’ve always been paying them, we decided to cut expenses and relocate most of the operations to keep growing without spending 60 percent of revenue on R&D and payroll,” says Maher. “It has been a great move and I really believe this is the trend of the future. Any company that doesn’t have the desire to move will have to think of an alternative solution because the market is becoming extremely competitive.”
Maher goes on, “We’re no longer competing with the guy next door. We’re competing with people in Asia, people in Europe. The Internet is huge. It’s another continent on it’s own.”
Unlike other companies that have outsourced jobs by hiring cheaper labor overseas, Maher and his top people all made the move together, only leaving their servers behind in Montreal. The decision to move with his company was easy for Maher, who considers himself a hands-on owner.
Says Maher: “The only way to really grab your product, to really control your product is to be there and to be on top of it and always work on it and enhance it. The only way to do that was to be here physically with our programmers and our people.”
He continued, “It was a big move and a big risk, but everything went smoothly and now we’re able to offer affiliates up to 75 percent of our revenues. Why? Because we were able to drop our expenses.”
The second factor in their success seems to be their honesty and the member loyalty that has resulted.
There are varying degrees of honesty in the online adult realm, but for IwantU honesty is as simple as not misleading their members in the fashion that similar programs do.
“IwantU believes in treating our members fairly, and that’s probably one of the biggest reasons why we are still in business,” says Bussey, “and I see a lot of sites that try to trick members with fake messages, fake IMs, fake webcam girls and fake profiles.”
Adds Bussey, “That is short-term thinking. It may boost stats and attract some affiliates, but it won’t last. We have had members with us for many years, who are very loyal to our site. Our retention is among the highest I know of, because everything about our site is real.”
These have become some of the biggest reasons for IwantU’s viability in what is becoming a very competitive market — a market Maher says is still growing.
“Adult dating competition is still in its infancy,” he says. “A lot needs to be done.”
To that point Maher says, “Pay sites used to be only one way: I receive information, I cancel, and I leave. On a dating site the retention is much higher because there’s interaction going on. I call it ‘the sixth sense of dating’ because it’s a different way of doing business. You have to understand your members. We’ve been here for nine years now and it’s a different kind of bargain. That’s why we’re lucky not to have as many competitors as compared to Adult pay sites, who have thousands.”
And still, the biggest challenges for the company haven’t been a lack of understanding; they’ve been more nuts and bolts.
“The biggest challenge is really a technical challenge: to allow 4 million members to chat and interact at the speed of light,” says Maher.
That challenge has been met though, with html and Flash chat and webcam options. The new challenge is acquiring the traffic to take on the their larger competitors. The enormous size of some of them, one of which has more than 17 million members compared to IwantU’s 4 million, is the ultimate target for the company.
“We’ve started to develop some feeder sites, get listed on some search engines and that type of thing,” says Bussey. “Our traffic has been pretty steadily rising. Now that we have the new site and our marketing efforts, we should be able to attain quite a lot of traffic.”
In addition to translating into several languages, like AFF has done, IwantU is taking on several new niches, designing gay, lesbian, and BBW variations of their site, among others. Each will still incorporate their initial three-pronged concept of clubs geared towards dating, adult and alternative.
“Our next challenge is going to be to market our Website the way we should have done and we’ll go to the next level,” says Maher.
“Now that we have what we feel is a great converting site, we can just start pushing it everywhere. It’s harder if you’re pushing it everywhere and then have to change your site or build a decent site,” adds Bussey. “It’s easier to catch up marketing-wise because a lot of it is just a question of money, which we have. If you’re marketing a product that’s terrible, you’re not going to last too long.”
With nine years of experience under their belts, Maher is now ready for the final push, working to make the theory he had back in 1996 a reality.
“People now are trusting the Internet for matchmaking purposes,” says Maher. “I don’t believe our kids are going to meet and get married the same way we got married and we met. Their lifestyle is going to be completely different. No one has the time to date anymore. People are working, always taken by their duties. The average person works 50 hours a week, drives home and is tired. No one wants to go out or has the energy to go out. Some people work on Saturdays and Sundays as well, so where’s the time for a relationship? I think the solution is online.”
