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Free course “N21: startup guide for product discovery with the dating software: how to launch a profitable dating business”

Sep 4, 2023
18 minutes to read

The information will help you with the Dating Pro platform:

  1. Navigate the path from idea to investments.
  2. Save you a lot of time by avoiding common mistakes.
  3. Launch dating site and apps. MVP.
  4. Achieving Market fit. For a startup, it’s important:
    1. that its sales channels scale and grow along with the project.
    2. that the ARPU (Average Revenue Per User) always remains higher than the CPA (Cost Per Acquisition), and customers, on average, generate more profit than loss. Only in this case will the project have a positive unit economics.

🙋We will be happy to answer any questions about the information in the course. Contact us


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Welcome to our Definitive Guide To Dating Business. You are probably familiar with the Pareto Principle, a rule that in brief states: 80% of actions yield 20% of results, while the remaining 20% of actions produce 80% of results. The Pareto Principle is widely confirmed by the activities of startup teams: when searching for an innovative business model, they often focus on inefficient actions.

In some cases, the misallocation of efforts leads to the complete closure of a business.

For example, CB Insights compiled a list of the main reasons why startups do not survive. These reasons include factors such as a lack of market demand or an underdeveloped business model—issues that could have been avoided by directing attention to the right areas (in our examples—conducting marketing research or calculating unit economics).

“Traction Map” tool. The benefits that participants in the team, investors, analysts, and experts can derive from the traction map include:

  • In a global sense, the traction roadmap contributes to advancing a startup from an idea to business scaling. Scaling is a process through which you can invest an amount of money upfront to ultimately gain even more money. Essentially, it’s the ultimate goal of any startup.
  • The traction map evaluates the startup’s tasks in terms of profit and development. It helps the team identify which steps need to be taken right now and which do not bring strategic value to the startup.
  • A list of customer segments and channels. This provides an understanding of the project’s current stage of development and what needs to be done right now.
  • Counter-guidance to action. Due to the principle of “don’t go to the right of red,” a startup easily dismisses actions that would be unnecessary at this stage/step. For example, until there is a statistically significant flow of sales, there is no need to focus on unit economics.
  • Focus of attention. Diversifying across more than 2–3 segments or channels is a losing proposition. The team always knows what it is working on right now.
  • Action tracking. The startup reports weekly on how many steps it has taken in specific segments and channels. If there is no progress anywhere, it’s a signal that something is wrong within the team.
  • Priority setting. A fully filled row means that the startup is already generating profit and can sustain itself. Therefore, it’s better to refine one channel than to make incremental progress in each one.

Why a startup needs a traction map. A traction map is not just a planning tool but also:

  • A startup diagnostic model.
  • A series of actions from idea to business scaling.
  • A visual demonstration of the development path to investors and specialists.
  • Help in planning early-stage investment (seed, Series A round).
  • A step-by-step business development guide.
  • A method for reporting on hypotheses and sales channels.
  • Links routine startup actions to its strategic goals. The table can be updated weekly or in the case of significant changes.
  • Launching new products, finding promotion channels

It’s worth noting that the traction map model was created for projects in the field of internet technology and IT and takes into account metrics typical for them. Nevertheless, a similar principle can be applied in other industries by replacing the metrics with local indicators of profit and loss from each customer. The undeniable advantage of the traction map is that it views the startup not from a technical perspective but from the viability of its business model.

The concept first appeared in one of the venture capital funds and then spread to many VC firms and startup studios. It is based on the Lean Canvas template, transformed into a horizontal format.

For clarity, we will use a shortened version of the traction map, divided into two halves:

 

  1. On the left – Validation. Enumeration of customer segments for the startup product. On the right – Grow. Identified sales channels.
  2. You cannot “jump” through a cell or insert data randomly. When a row reaches the boundary between the two parts of the traction map, the second stage begins for the corresponding customer segment – testing sales channels. This means that each row continues in the second part of the table (“Testing Sales Channels”).
  3. Although you can fill in multiple rows simultaneously (and at different speeds), it is recommended to focus on just two or three segments or channels. Taking on more will scatter your attention too much—burnout is likely to catch up with you, and you may abandon the startup. If you fill in only one row at a time, progress on the traction map will be too slow to show effective results.
  4. To facilitate reading the table, color-coding is used: steps you are focused on are marked in green. Uncolored white cells are completed steps, but you are not currently focused on them. Red ones are steps the startup is currently on.
  5. Inside a row, you cannot step to the right of a red cell. If the current step is not completed, moving on to the next one is premature. Instead, you should focus on the red cells—they indicate tasks that need immediate attention.

If you are not satisfied with the value provided, return to the value proposition step and start the chain of steps from left to right again.

We have combined:

  1. <!>The sequence of team steps on the map that cannot be skipped.
  2. Checklists for each step for Dating Pro.

For readability, we have presented it in a vertical format:

Stage 1. Product Fit #Validation #Customer Discovery #Customer Development

The founder’s task is to understand how to make consumers buy the offered product.

Competitor Analysis

Result: Identify who you are “disrupting” (maximum 2) in a large market

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Customer Segment

Result: Describe the customer segment

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Situation / User Story /

Result: Describe the situation in which a representative of the segment finds themselves.

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Value Proposition.

Result: The team formulates hypotheses about the problems consumers face and what product can solve them.

Problem

Result: Describe the hypothesis of the problem you are solving

Solution

Result: Describe the hypothesis of the solution to this problem

The Benefit to Customers

Result: Describe the hypothesis of the benefit to customers in numbers

How Much Money is in the Segment

Result: Consumer expenditure category. Analyze the segment in the market. Economic modeling. The team identifies customer acquisition costs, market size, and production costs. The most important metrics at this stage are ARPU (average revenue per user) and CPA (cost per acquisition), with ARPU needing to be higher than CPA.

Complexity

Result: Rate the segment on a scale of 1 to 10 for comparison with other segments.

Believe in Success

Result: On a scale of 1 to 10, how much do you believe in this product?

Problem Confirmed

Result: Has the segment been confirmed? Is this the segment you described? Has the problem been confirmed? You need to conduct a series of detailed interviews with consumers to find out what their pain points are and why. This way, the team will identify target audience segments that most frequently encounter a specific problem.

Minimum Viable Product is Ready

Result: Create an MVP (Minimum Viable Product). Confirm or refute the hypothesis while spending a minimum of resources. The sooner the team shows potential buyers their product, the more data they will collect about user behavior and feedback. Note: Up to this point, the startup team has not spent a penny. Spending is possible here, but only a small amount.

Explore courses and articles about MVP in Stage 3. Earning income > Sales tool and product exists.

Solution Confirmed #Validate / #Iterate (or Pivot)

Result: The solution has been confirmed. The startup collects feedback on the MVP to understand whether users are ready to buy such a product. If the MVP is not in demand, it means the product needs improvement.

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First Sale

Result: The financial benefit has been confirmed. Manual sales of $N (where N, for example, is $10,000) have been made, and the sales channel has been recorded. This is a marker of successfully completing the first stage of the traction roadmap. To ensure that this is not a coincidence, you can try selling the MVP to a few more focus group participants. It is useful to provide a few free copies of the product to users who refused to buy. This way, the startup team will continue to gather feedback, which can be used to plan further development of the functionality. At this stage, it is important to create a comprehensive consumer and market profile. The startup must delve into the hypothesis and determine which problems are invented and which are real. The better the Customer Development is worked out, the more confident the team will be at each subsequent step.

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Stage 2. It’s possible to attract investors.

At this stage, you can attract seed investments from business angels and early-stage funds through pitches.

Result:

  • Pre-Seed: At this stage, founders use their personal savings or contributions from friends and family to develop their business idea and create a prototype or proof of concept.
  • Seed Round: Seed funding is typically the first formal round of financing. It is used to fund initial operations, product development, and market research. Investors at this stage may include angel investors, venture capitalists, or early-stage startup accelerators.

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Stage 3. Earning income #Market fit #Channel Testing.  #GROWTH #Scale Up

 

1 Sales channels

The concept of a “sales channel” encompasses two important factors:

  1. Customer acquisition channel (e.g., affiliate traffic, contextual advertising, targeting, cold calls, and more).
  2. Sales tools (landing pages, social media posts, persuasive phone call scripts, and more).

Therefore, through the sales channel, we direct consumers from various traffic sources to specific sales materials to complete conversions and exchange their money for our product.

Result: The sales channel you are testing is described. If you change any component in the current channel without an A/B test, it is already a new sales channel.

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2 Users engaged

Result: Attracted users from the channel. During channel testing, it’s essential to prove that there are consumers in a specific channel willing to pay for the product.

3 Sales tool and product exists

Result: Each channel requires its own dating site or apps (MVP) tailored to its specifics. If the MVP is duplicated for multiple channels, different tools will be needed for its promotion.

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4 First sale in channel

Result: Made the first sale in the channel. At this stage, dead-end channels are eliminated. Trying to sell the MVP, the team quickly discovers which channels it doesn’t work on. Sometimes it’s necessary to change the traffic source, promotion tool, or even the MVP itself. Sales channels that brought the startup its first revenue continue on the traction map.

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If the result doesn’t align, you can reassemble the Product fit by studying the Free N21: Startup Guide for Product Discovery with the Dating Pro Platform: How to Launch a Profitable Dating Business

5 Sales flow

Result: Achieved sales in the channel, e.g., $10K. Statistically significant sales flow. The team’s task is to gather data and assess the channel’s purchasing capability. For this purpose, sales are put on stream to collect a sufficient volume of data.

6 The economy has converged

The team establishes quality growth metrics and creates metrics that assess the quality of the sales channel. The more profit a channel brings, the higher its scaling potential.

Result: Revenue exceeds all your expenses in this sales channel by approximately 3 times. The intermediate stages mentioned will help with this. Repeat sales have occurred.

Acquisition

Retention

  1. Activation

  2. Engagement

  3. Monetization

7 Economy converges on scale.

Convergence at scale. The startup increases traffic volume for the selected channel. If profit grows proportionally to traffic, and the channel demonstrates sufficient capacity, most resources can be shifted to this channel, and scaling can begin.

Result:

  1. The sales team is onboarded. The marketing team is onboarded. The product has an ABCDX segmentation ready.
  2. Unit economics have been proven to converge. Economics x3 of cost converges.

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Stage 3.1. It’s possible to attract investors.

At this stage, you can attract seed investments from business angels and early-stage funds through pitches.

Stage 4. Standardization of the Streams, Run, and Change Teams #Formation #Mission #Vision #Strategy

Responsibilities are allocated within the product across all directions.

…

Roles, structure, KPIs, and OKRs are defined for the product. Legal entity is established, and team shares are defined.

…

The North Star Metric is determined, reflecting the value of our product for the customer.

…

Hypothesis-driven work has been launched, making the team self-reliant.

…

Break-even point has been achieved.

…

Investments have been recouped.

…

Sufficient leads, sales, and shipments have been generated to meet the goal.

…

Stage 5. Exit

Result: you sold your stake in the project. The average duration is 4-10 years.

We created this guide to gvie you the exact information you’ll need to prepare your online dating site and apps for launch. To get more of our Online dating industry insights, follow us on:

The world of online dating is rich and exciting. According to Wikipedia and Statista.

700 million people are using online dating websites and apps. The worldwide online dating market alone is estimated at USD 4 billion. Online dating market will grow steadily till 2024

I hope that this manual will prove useful and help you  to launch a profitable website of your dreams. I also invite you to visit our blog where we publish online dating trends, ideas of niche dating, contests and dating site and dating site owners cases, marketing tips and much more. The Dating Pro platform includes a wide range of modules and additional services that will help your dating site become popular and profitable.

If you have any questions or feddback regarding this manual or the services that we provide, feel free to contact us by email or our livechat. We are always here to help!

We wish you good luck on your way to success!

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