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February 11, 2007

'I have yet to meet a person who's under 20 who would not give up email first' [before texting or IM]


So said eHarmony CEO Greg Waldorf to Emily Parker in an interview which appeared in yesterday's (February 10, 2007) Wall Street Journal, and follows.

    The Matchmaker

    Roughly ten days before Valentine's Day, I find myself at the headquarters of the Internet matchmakers eHarmony.com, peering into labs "dedicated to the study of human relationships." The brand-new labs, which look more like miniature living rooms, are equipped with couches, stylish armchairs and video cameras. This is all part of the company's greater mission to understand what makes two people "click," and thus forge more compatible matches among their subscribers. (eHarmony's R&D team jokingly refer to meeting offline as meeting "in the wild.")

    "I believe in measuring things," eHarmony CEO Greg Waldorf says cheerfully when I meet him in his office. In a room nearby, academics with expertise ranging from marriage to "loneliness" attend an advisory board meeting. "I love the challenge, that people think: How could you possibly measure interpersonal chemistry? I like the idea of research and measurement around these things that seem so impossible to quantify."

    Of course, this only leads one to wonder, how does one measure interpersonal chemistry? While eHarmony is launching an ambitious research project to do just that, Mr. Waldorf admits that they still haven't solved the puzzle.

    "We can help them figure out their compatibility, but individuals have to figure out their chemistry. The nice thing is that on eHarmony, you're starting out with a pool of matches with whom you at least have compatibility." (The site "matches" individuals based on their answers to a lengthy personality questionnaire.) What about "opposites attract"? "In general," Mr. Waldorf says, "It's a really bad idea."

    Upstairs, walking through the sun-filled office and looking at the pictures on the walls of beaming couples — eHarmony success stories — it's hard not to feel charmed by this mission to create happy, lasting unions. But really, finding your soulmate with... the Internet? Relationship-research labs? Whatever happened to traditional courtship, spontaneity — their eyes met across a crowded room?

    When I ask these questions, it's clear that Mr. Waldorf doesn't see anything inherently "unromantic" about meeting online. "I don't mean to be argumentative," he says, "but talk to the couple who talk about their first date through eHarmony... and the first time they walked in and they saw each other." After all, eHarmony is just keeping up with the times.

    Noting that I'm a 20-something journalist, Mr. Waldorf draws an analogy to online news sites. "How many of your friends read the print paper?" he asks me. "But do they not get the benefit of news?" His larger point is that maybe it's about time we stopped mourning lost conventions and just went with the technological flow.

    Mr. Waldorf, now 38, has been an entrepreneur since the age of 13, when he started his own software and consulting company in L.A.: "Families would get a computer and they'd say, 'Oh, I think Greg Waldorf knows a lot about how to set up a computer,' and so I was that kid in the neighborhood who knew that." His mom signed him up to take a programming class, but he was so advanced he ended up teaching it.

    One of his "students" was in the real-estate industry and asked Mr. Waldorf to do some work for him. Soon enough, Mr. Waldorf was doing work for the whole firm, and by the time he was in college he had clients in New York and Honolulu. "I have a business card that just says, 'Greg Waldorf, computer consultant' — and it's my parents' phone number," he says, laughing.

    In 2000, Mr. Waldorf became a founding investor of eHarmony, joining forces with founders Greg Forgatch and Neil Clark Warren, a clinical psychologist with three decades of experience counseling married couples. Dr. Warren's research shaped the company's scientific approach: Compatible singles are matched based on their answers to an elaborate questionnaire. The site, with its relatively lengthy process and subscription rates of around $60 a month (almost twice the price of other dating sites) reaches out to users who are clearly looking for much more than just a date. It seemed like a good business idea," Mr. Waldorf explained. And also, "it seemed meaningful."

    It was certainly a daring investment. Even now, when you can find just about anything on the Internet, many remain skeptical that they will meet their true love online. So just imagine how much more outlandish this seemed seven years ago, when the company first got started.

    "At that time the people who were online were somewhere between . . ." Mr. Waldorf checks himself, "at least the perception was, they were somewhere between the undatable to the interested-in-the-one-night kind of affair." Then along comes Dr. Warren, a 65-year-old entrepreneur with a business idea that challenged the conventional wisdom of the industry, which was: Do not talk about marriage. "And, the worst thing you could possibly do would be to have a 436-question questionnaire that would take an hour and a half to finish," he adds.

    And indeed, the early years were rough. The company almost ran out of money in 2001, and even then took a few years to get off the ground. "Between 2002 and 2004, no one took us seriously... people used to describe eHarmony to me as the 'niche' player. Like serious relationships were the niche. And I would just chuckle."

    He now estimates revenue to approach $200 million for 2007, with business to be "gangbusters" through Valentine's Day. The company boasts 14 million registrants since its founding. Perhaps most important, at a time when there seems to be great cynicism about marriage, Mr. Waldorf is confident that Americans still place a high premium on lasting commitment. Just look at the economics.

    "I'm very respectful of people who pull out their credit card to pay for our service," he says. "I think they're getting a good opportunity to meet the right person, but this is real money. This could be the same cost as your cellphone plan, and I'm not trying to equate cellphone plans with finding a soulmate, but it's real money to people." Why are they willing to pay so much? Because "people associate the highest value with long-term relationships."

    Mr. Waldorf, an investor/entrepreneur with a Stanford MBA, doesn't strike me as the type who lived for elaborate "how we met" stories or relationship details. And he's the first to admit it. "I didn't normally go there," he describes himself. "I wasn't the guy a friend calls up and says: Let me tell you the really long version of my weekend."

    Yet now, Mr. Waldorf may have unexpectedly fallen into his own niche. "If you want to call it the dinner party test, people are fascinated by talking about relationships. It's an addictive business. Think about it from my point of view, I've been involved in a lot of companies, enterprise software, mobile application deployment... then all of a sudden you're involved in a business like this... How do you get involved with another business after this? What's the next thing to relationships in terms of involvement with the customer?"

    Mr. Waldorf, who often mentions a friend who met his wife on eHarmony, claims to have surprised himself by how meaningful he finds his work: "We're not just selling phone systems or Internet advertising. Everyday we spend in the office actually makes a big difference to a lot of people." There is some evidence of this: An independent poll found that in the 12-month period ending Aug. 31, 2005, some 33,000 eHarmony members tied the knot (averaging around 90 per day).

    The vision behind the company is not simply to create marriages, but to create happy marriages by using scientific research to unite compatible individuals. "I know it sounds corny when I'm talking about this," Mr. Waldorf says, but, "if you can lower the divorce rate by 1%, it could affect a million people in a generation. I don't know if that's an exact number, but it gives you a sense of how many people's lives are impacted."

    The popularity and financial success of sites like eHarmony underscores what perhaps should have been obvious: People care about relationships. "I can not tell you how many businesspeople I meet who tell me that the first thing they read in the Sunday Times is the vows column," he says. And the evidence hardly ends there: "I used to spend a lot of time in Manhattan. Years ago, way before I ever even thought about eHarmony, whenever you'd pass people on a run, particularly women, what were they talking about? Relationships!"

    People's willingness to pay for eHarmony would seem to support his point. Consumers, Mr. Waldorf explains, are far more disposed to pay for goods rather than services on the Internet. "People expect things on the Internet to be free," he says. "So how have we built a business that will have nearly $200 million in revenue this year? We grew our subscriber base by about a third from 2005 to 2006. How? Because this is something that people care a lot about."

    It's also something people care about across the age spectrum. While never-married 20-somethings do form a huge part of eHarmony's business, about 25% of users have a child at home and many are divorced. In 2006, the fastest growing segment was the 50-and-over set.

    "There's wisdom you get from going through adversity in life," Mr. Waldorf explains. "So I think the appeal of a compatible mate really resonates to people who have not had that."

    Mr. Waldorf explains that unlike some other dating sites, eHarmony emphasizes quality over quantity, so potential subscribers can be turned away for reasons ranging from marital status (you can't be married more than three times) to lack of thought in filling out the questionnaire (someone who rates themselves as a "4" in every category). In total, the company has rejected more than a million potential users.

    "From our business point of view, we've given away tons of revenue," Mr. Waldorf says. "We've left a lot on the table, but the idea is to keep the quality of our pool really healthy." (This screening process has led to a lawsuit, pending in a California court, filed by a man indignant about rejection by eHarmony on account of the fact that he was still married when he tried to sign up.)

    Of course, while inconsistency on the questionnaire can sometimes reveal dishonesty, Mr. Waldorf admits that he has no surefire way to detect when people are misrepresenting themselves online. "I can't tell if someone is lying about whether or not they're outgoing," he admits. "I mean, what am I going to do? Say 'Hey, let's go to lunch?'"

    The popularity of Internet dating is just one more sign that we're witnessing a fundamental change in the way people interact, a difference that can be particularly pronounced across generations. "I'm 38," Mr. Waldorf says. "I ask my friends' kids this: "If you had to give up email, text messaging or IM, which would you give up?' And I have yet to meet a person who's under 20 who would not give up email first. I find this fascinating. I find this unbelievable....

    "Do I think that means young people will not be able to communicate and obtain relationships?" he continues. "No, not at all... but this is where innovation comes in. Additional waves of people will come up, they may want different ways to interact, but they will want compatible relationships. That will be the constant part. I might have to change the way you have your first open communication, to figure out something to do on a cell phone. But I don't think it's possible that 20 years after me, when people are 38, they'll be saying, 'I don't want a serious relationship.'"

    Perhaps you don't have to meet "in the wild" to feel that certain spark. Mr. Waldorf describes the besotted who were introduced on his site: "When they talk about the first kiss or the first anything, it was just as exciting when they got in their cars and drove 300 miles from wherever to wherever for their first date. But people don't make movies about it the same way."

    Will they eventually? "Yeah," he says. "Because it will be a movie that mirrors what's going on in real life."

February 11, 2007 at 04:01 PM | Permalink


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