French leader of the online dating market Meetic is about to buy the match.com activities in Europe. This is a very important news as it is very rare that an European company is able to beat a US based company. Most of the time it is the opposite that happen, with US companies buying successful European start up, like Ebay buying Skype, or Yahoo buying Kelkoo.
Match.com entered in the European market couple of years ago whereas Meetic was already leading in the market. They have never been able to find the keys to become competitive.
Here are some lessons we should think about in this headline.
- Local adaptation matters: Match.com has never been able to adapt to the different European market. Meetic however has been able to adapt its site to the different cultures of dating, and to spread all over Europe.
- Barrier of Entry = community size : I believe that the reason why Match.com has never been able to grow in Europe is because at this time Meetic.com already had a large community of users. Social network's interest is based on the size of the community it has. That is the reason why Facebook is getting so big: The more users, the higher the interest. Also, the bigger the community of your competitor is the harder to get in the market. Indeed, it will be difficult to come back if the gap is too wide.
- European's style of start up financing : US companies tend to be more impacted by the current crisis than European's ones. US firms might have a greater access to fund raising than in Europe, but Meetic set up a secured business model right from the start which helps it to keep on earning money despite the bad economical conditions.
- 1.0 business model is safer: Meetic's revenues are based mainly on subscription, which is less and less common nowadays. Most of the 2.0 companies bet on their ability to generate revenues by advertising than by making their users pay. Meetic.com is the opposite and right from the start, secure the business model in this way.