· In this week's Industry Focus: Wild Card, Nick Sciple talks with Dan McMurtrie and Alex Draime of Tyro Partners about the bull case paper they recently wrote on online dating. It’s about dating. Tyro Capital Management, led by portfolio manager and social media star Dan McMurtrie and co-founder Alex Draime, tackled the rise of online dating and its effects on the AdJoin Millions of Americans Finding Love Online With Our Top 5 Sites For Relationships! See Why Singles Love These Dating Sites. Find Something Serious Or Casual. Start Today! AdFind Love With the Help Of Top 5 Dating Sites. Make a Year to Remember! Online Dating Has Already Changed The Lives of Millions of People. Join TodayServices: Dating Sites Comparison · Dating Sites Features · New Reviews · Online Dating AdCompare Top 10 Online Dating Sites - Try the Best Dating Sites Today!Zoosk - Best Dating Site - $/month · Match - Best for romance - $/month ... read more
Yet at the same time, surveys show a spike in the portion of people reporting that they met in bars or restaurants. Thanks to apps like Tinder, transaction costs have become effectively zero in the contemporary romance market, the authors explained. Apps are free, and furthermore, the social costs of trying and rejecting potential mates plummet when one has no community ties.
com for Hedge Funds or Low-Rent Telemarketing Service? Rejecting men with an iPhone swipe removes the physical risk of doing so in person — that a man will become angry and harm a woman for daring to turn down his advance. Some may quibble with this view as it applies to developed countries, but the online dating phenomenon is intersecting with culture in a major way in emerging markets, particularly in Muslim countries.
But the authors cautioned against requesting their counsel on matters of the heart and loins. This content is from: Portfolio. And so people are not getting married younger, and so marriages from 18 to 25 are collapsing, but by the time you get to 30, 35 marriages are going up, and the divorce rate of overall marriages is declining. Dan McMurtrie: They have more trading experience, so they probably are better able to price things.
They are better aware of their opportunity costs. I think people are having conversations about personal finance, about what your actual lifestyle is. Dan McMurtrie: Cohabitation is up with younger people. So people move in with their boyfriend and girlfriend, but the conversion from cohabitation to marriage is down. Do I like this person relative to all my other options? Can we actually live together? Dan McMurtrie: Yeah. Nobody understands.
Tinder is a one variable, yes, no. And I think this is a model we can sort of scale and use to continue to build a network. You have one good photo and the other ones are really bad and grainy but usually the man has not actually filled out the whole profile. So filling out the profile correctly, but I think that the other two things are, on sites like OkCupid and others like that where you have a lot of information on the user, a lot of this is just kind of obvious. Are you doing stuff?
Dan McMurtrie: I think the other thing people forget is a lot of these are designed to make you click. Dan McMurtrie: So I think a lot of it, and then the biggest hack I think is time of day because of that cue dynamic. Dan McMurtrie: … Yeah. Well, I mean, I was on there for a long time, but they used to show you when people were online. And so I think when you send your message is very important.
So a lot of times guys tend to, is there a polite way to say this? Guys tend to send messages-. A wink, wink, nod, nod and that is not good because they all come in. Largely is after work. So you want messages going out in the three to PM range so that they are there when somebody gets off work and is checking something.
Dan McMurtrie: So like Hinge for example, has individual widgets that are like topics and pictures and things and you can comment and respond to an individual one. On OkCupid, you can write them a six page love letter if you want, and you also have to think about those audiences that are-. Dan McMurtrie: … Do not. Never do that unless you can write one of the funniest.
And then I also think like things like eharmony, and others like that, that are explicitly, like eharmony, you have to pay and apply. eharmony just screens for, are you desperate? Are you really seriously looking for a relationship right now? There would be like 25 women and 30, men and it would get really weird, and man, I would love to start that just to read the conversations.
That would be weird. The other thing is a lot of times guys look at their widgets added. Dan McMurtrie: The other thing to realize, I got Tinder versus the others is the average time a person on Tinder spends looking at another Tinder thing. I think is two seconds. So first photo is very important. All of the others, like Hinge is structured for you to be able to show off cool stuff.
It takes a second for profiles to load all the other things. Dan McMurtrie: So Hinge gives you an opportunity to show off. Dan McMurtrie: But one of the things it does is men can pay to extend a match. But now like are you really interested? Dan McMurtrie: … No, you pay the subscription, which is actually kind of genius because Tinder and some of these other platforms, the users that pay have the worst success rates.
So they pay thinking that more-. You can also listen to the podcast on your favorite podcast platforms here:. Apple Podcasts. Pocket Casts. Google Podcasts. For all the latest news and podcasts, join our free newsletter here.
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Learn More. In this week's Industry Focus: Wild Card , Nick Sciple talks with Dan McMurtrie and Alex Draime of Tyro Partners about the bull case paper they recently wrote on online dating. Some topics discussed:. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video. Nick Sciple: It's Wildcard Wednesday , and I'm your host, Nick Sciple.
For today's episode, we'll be diving into online dating with our guests Dan McMurtrie and Alex Draime of Tyro Partners, who recently authored a paper on their thesis for the online dating market. We cover everything from how online dating is affecting how people meet, how people jump between different online dating apps, and how much runway Match Group has left for monetization.
I hope you'll enjoy our conversation. Alex Draime and Dan McMurtrie are co-founders at Tryo Partners, a New York City-based hedge fund focused on secular trends driving technology, healthcare, industrial, and consumer markets. They focus on deep dive research. They recently published a paper on their online dating market thesis. It's gotten a lot of attention in the industry.
Alex and Dan, so excited to have you on Industry Focus. Dan McMurtrie: Thanks, guys! Really excited to be here. I'm a big fan of the show. Sciple: Yeah, thanks so much.
First off the bat, what got y'all interested in researching this space and doing this deep dive online dating? McMurtrie: Well, we're 28 and As we lay out in the paper, in that age cohort, there's not a lot of options other than online dating.
I think in real life, it's been a constant phenomenon. We've come of age in the period where that's become dominant. We've seen it go from a niche to a dominant thing. That's been really interesting to watch. And as we looked at how it was affecting other parts of the market and other companies, and how they were intersecting, we realized, this is actually a really important thing, not just a one-off.
It's been viewed as a widget and not a primary driver. We think it is a primary driver, not a widget. Sciple: Yeah, absolutely. I'd say from my own experience, and I'm 27 years old. When Tinder first hit in college, it came out of nowhere. Now it's this phenomenon that's continued over the past decade. You make some observations in the paper about how the rise of online dating has affected gender dynamics between men and women.
Can you dive into that observation and how that's driving interactions between people? McMurtrie: Sure. Everything about online dating is about cohort matching. When you make a broad statement about everyone, it tends to be wrong. And one of the reasons why we published the paper was, we saw a lot of people in the press writing opinions that made a lot of sense in a specific cohort, particularly in a New York, San Francisco, talk to your school alumni context, but it was not accurate to the broad population.
What generally happens is, we think about this as creating liquidity and transparency in the market. And usually, when there is transparency, consumer behavior starts to change. Because it's dating, I think people don't like thinking about this as a rational process, because it's very psychologically jarring.
But what we're seeing is a few big things. One, the primary driver is, everyone now has access to multiple orders of magnitude larger pool of potential dates. That's the first thing you need to understand. You're going from your dating pool -- the people you know at work, the people you know at the bar, things like that, church, whatever, depending where you live -- to where you have access to literally millions of people and everyone within 50 miles. And that means both genders, whatever gender you want to be, you have the ability to be a lot more selective because the opportunity cost is dropping massively, because when you're looking for a first date, you can choose among unlimited options instead of five people you know, maybe two or three people that you think you're interested in, in real life.
That's really changing a lot of dynamics. And then, once you're on a date, you go on your first few dates, and you date knowing that in two minutes, you can have a potential date or a date, if not less than that. So, again, opportunity costs and sunk cost biases and things like that are changing. And so, people are not staying in relationships as long, because if something isn't really hooking you, or if there's a problem, you can just bail, and you've got another option.
So that's causing a lot more turnover. Because that is the case, opportunity cost is down, selection's way up, younger marriages are collapsing. People are not getting married very young, because why would you at 18 to 25, when you've got everything in front of you, and you can go on a date with whoever you want? And that's been a big change over the last 60 years, is people going from marrying their first sweetheart to marrying in their 20th relationship or something like that. So, that's also leading to a lot of, basically, market participants now have more information when they do decide to get married and form a long-term commitment of some kind.
And it's 5, 10, 20 times as much information as last generation. And that's actually, we think, why you're seeing divorce rates decline, which is really interesting. And then, adding on to that, the other dynamic is that, on average, for men and women, it's a very different dynamic. Women are getting a minimum of 5 times the inbounds that men are. And in many cases, 25 or 50 times. That creates a few things there.
So that incentivizes men to be less selective and swipe more, which ironically reduces the signal for women. For women, they can be a lot choosier, because they know that if they say yes on three different guys, they're probably going to get at least one.
That creates an interesting dynamic. And also, the queue size gets huge. There's dynamics like that around time of day friction that are very, very important, and are the largest hackable item on these dating sites. The other thing is that the whole thing has become visualized, the Instagram-ification of dating.
So, now you're seeing big changes in consumer spending, because everyone needs to look better on camera than they did in the past. The gating item for you to get in person and be able to maybe show off a sense of humor whatever is, you have to look good in a photo.
So, the first gating item is going to be photo quality, particularly on Tinder. That's changing a lot of different consumer behaviors. The other thing is, because opportunity costs are low, the stakes for early dates, if you want to be successful, are much higher. You have to have really good date ideas. When I talk to the guys for trying to date, they're like, "What do I do? Where do I take a girl? You can't just be another cocktail at a nondescript bar that nobody cares about.
It's just not going to work because you're offering a purely commoditized product at that point. So, it's changing a lot of different consumer behaviors. It's changing household formation. And it's changing general socialization, because the other thing we saw and we talk about in the paper is, people are no longer making referrals, which used to be the dominant way in which people would meet people -- your family or friends would introduce you to somebody and set you up.
And because there's an unlimited number of other options, it doesn't make sense to do that anymore, because if the referral fails, then it can blow up the friend group and create really awkward situations. And anybody who's been to an office Christmas party has probably seen that go down. We can go on on that, but it gets very complicated.
But it's changing pretty much everything, if you go through that. There's not much that it's not touching. That was why we were like, "Wow, this is a much bigger deal than just another app. Sciple: Sure, exactly. It's fundamentals of human behavior, how relationships start and end. To your point when you speak about referrals, I saw that early on, on Tinder. They used to show you who were your common friends. And you were disinclined to swipe on those people because of the social dynamics that could happen.
Anecdotally, I was talking to my fiancee ahead of this interview. And those same observations you made about folks being more nit-picky around who they date because of that new supply of folks that they can get after much more quickly, make folks much quicker to ditch a date that maybe does one thing wrong, or checks off a box on the no-go list, or the deal-breakers.
Draime: You're accumulating a database of things that don't work for you. It's actually good, because a lot of people I know -- and I would say maybe even my parents and other people I know -- they got married, they really liked each other, and there was some chemistry, but they were never compatible as people.
And they didn't date long enough, and they didn't do the reps and the checks to really vet that out.
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Our Purpose:. And they've made it Facebook dating instead of Instagram dating, which is interesting. It takes a second for profiles to load all the other things. Thanks to apps like Tinder, transaction costs have become effectively zero in the contemporary romance market, the authors explained. I think that's worth watching. And their case is kind of like, they don't need to make any money on dating, because if this adds a network effect of Facebook, they can monetize across the whole platform.McMurtrie: And I think at a high level, what's interesting dan mcmurtrie online dating when you think about what is the monetization capacity of these businesses, there's advertising and partnerships, and there's premium subscriptions. Cigarettes, Coca -Cola. We cover everything from how online dating is affecting dan mcmurtrie online dating people meet, how people jump between different online dating apps, and how much runway Match Group has left for monetization. But, they can go in and test these things, get the verification data they need, and then go out to the monetization channel and say, "Look, we've proved this works. People are not getting married very young, because why would you at 18 to 25, when you've got everything in front of you, and you can go on a date with whoever you want? But once online dating as a cultural phenomenon gets normalized in a market, then you start to see stratification of interest in terms of people actually wanting to date, people wanting to swipe, dan mcmurtrie online dating, whatever. Latest Stock Picks.