He had 100% equity and kept every cent.
Matchmaking is as old as time, and before swiping left and right was ever a thing, some people would get set up instead.
Setting your friend up with a nice guy or gal turned into a whole new facet of the internet in 1995, when Gary Kremen created Match.com, and eHarmony popped up a few years later. These sites and their judgment hinged on algorithms — it was a huge success.
AOL and MSN started partnering with these dating sites, and several white-label copycats followed through and got pushed by Yahoo. Maybe the programmer's success we’re talking about today started with a copycat site, but it sure worked for him.
The Dating Site
Our protagonist launched the service in 2003 using his home computer as the server. He got to 10,000 members before upgrading to an actual server — that’s some heavy bootstrapping, but it gets better.
Even at 1.5 Billion hits a month, he was able to keep the overhead down with eight servers and zero employees. He only hired the first one after that same milestone.
I vividly remember his story because, as a young teen interested in business and technology, he was one example of how it was entirely possible to start from scratch. It was a case study in possibility. All it took to become an entrepreneur was a lot of work, careful consideration, time, and luck.
He was filed away in my mental bank of examples up until 2015 rolled around with news that he sold his company to Match Group for $575 million. It wouldn’t have been news in a sea of acquisitions if it wasn’t for the fact that he still owned 100% of the equity and got to keep the entire sum.
That was impressive; that was worth digging into. It was a miracle that I hadn’t looked into it yet — until now. What were the lessons to be learned? Was it all just the right place at the right time?
How POF Started
The story started in 2001 when Frind saw an opportunity. A coworker had shown him what online dating was, and of course, back then, it was in its infant stage.
He quickly realized that all options were premium and could easily create a site that could do the same thing but for free. So he registered plentyoffish.com — although it wasn’t until 2003 that he started building.
You see, ASP.NET had only just come out, and Frind was only learning. He wasn’t starting with zero knowledge; he had a degree from BCIT, but new is usually challenging — and it took time.
There weren’t many options to monetize a site back then. Frind writes that he wasn’t even able to make $40 a month with his one affiliate.
Even Google Adsense, the go-to beginner’s revenue stream, was only launched in March of that year.
But by 2006, he was the top Adsense publisher in terms of page views, and he freely offered his lessons learned — many of which we hear mentioned today because they work.
- Know where your traffic is coming from and create channels for these groups — he uses countries as an example where you can show relevant content to relevant people to maximize CPM.
- Don’t rely on SEO — you want to make your product great enough that people who visit want to come again. Repeat customers are a game-changer.
- Have your users create the content — the most successful sites get better with more users, and this is why people tell their friends; it’s the network effect. The network strengthens as more people join.
- Don’t enter markets with a lot of competition — his method was turning the premium into free; that was his new market. He did his research through forums.
And these are quite timeless. Even Seth Godin advocates for the network effect and not relying on SEO in This Is Marketing.
Google wants you to be found when someone is search for you. — Seth Godin
And Frind quickly found out that he needed people to want to find him.
POF’s Three Growth Pillars
Frind needed users to want and advocate for the product, and these factors would come together to make that happen.
They aren’t anything special, but in unison, they reduced friction for adoption and allowed POF to gain momentum with every little improvement.
People wanting to find him meant growth, and given the only significant competitors (Match.com and eHarmony) were freemium at best, growth meant he had to make it free.
After making it free, Frind relied on and obsessed over analytics. He’s mentioned on several occasions that he would look at how users behaved rather than what they asked for and only made changes according to the data.
It was early on that Frind opted not to pay for advertising. More prominent companies were growing by using ads, but POF inadvertently used word-of-mouth when the only way you found out about it was through forums, blogs, and stories.
But there are a lot of question marks here too.
The Devil’s Advocate
By 2008 POF had amassed 15 million users. Was it blind luck? Perfect timing? Consistency and hard work? It isn’t apparent, but we can’t deny the several elephants in the room.
- The internet was young and expanding.
- Online dating was a mere seven years old.
- The free-with-ads model had only just started gaining steam.
- The competition was lackluster.
- POF was on the cusp of all the marketing revolutions before anyone jumped on them; YouTube content, Facebook ads, Google ads.
It’s very easy to say that Frind got lucky — because he did. There’s no denying that any massive level of success has some level of luck involved.
But Frind had no idea he was on the cusp of anything, and although the competition wasn’t grand, it was there with sites that had a significant lead.
He could have easily used that as an excuse not to try, but he went for it anyway.
So luck was a factor, yes, but good fortune without the work doesn’t equal success.
What Lessons Can We Take for 2020?
We can’t force ourselves to be in the right place at the right time. And we can’t replicate success. But we can sure as hell learn from it.
Frind didn’t have a lot of competition and rightly advocates for going into industries with little competition, something Peter Theil is an advocate for as well.
In the 2020 technology landscape, there’s a lot of competition and a lot of resources. You could spin up a site better-looking, more efficient, and more scalable than POF was for the first ten years of its existence.
Find small markets, cater to their needs, and once you have a large share of the market, focus on expanding the market itself.
Launch products while they suck
The wrong advice is, “your first product doesn’t need to be perfect.” It shouldn’t even be close to perfect.
In Frind’s words, “dead simple,” and that means lacking features.
The early adopters don’t seem to care and their feedback, mostly through behavior on the site (rather than verbal), is what should guide development.
Scaling is a customer service issue.
Technology, especially in 2020, isn’t the problem. Demand could come in the millions and require very little investment — it’s customer service that will end up making you hire employees.
Though an asterisk here would be that many businesses are people dependant in the very early stages, like content-based businesses.
A keen eye for analytics does wonders.
We mentioned the network effect before, i.e., A product that gets better with more users. But to ensure the users are staying, close attention to analytics seems to be a winning strategy.
The majority of people just don’t know what analytics is and how to measure things — Frind on growth.
If your focus is growth and you see a dip, asking “Why?” and delving deeper may yield previously unknown factors.
Don’t be discouraged by others’ success.
There was a lot of luck involved with POF, and attributing this success story to engineering and perfect planning is not only wrong but misleading.
Brush up on survivorship bias. Success is luck and hard work; we can only control the latter.
POF’s success showed me that a combination of planning, opportunity, and obsessing over detail could be a one-person show.
In 2020, there are more resources than ever to achieve the same feat using learnings from this man’s experience. A $575 million exit doesn’t have to be your definition of success — it isn’t mine.
But building something self-sufficient, scalable, and flexible that can bring in a fraction of what POF did, that’s a win in itself.
Best of luck,