Match.com: Gary Kremen
How founder and ex-CEO Gary Kremen’s search for love inspired global online dating site Match.com
Some say that the best business ideas come from trying to solve a problem that you understand. That’s certainly a view shared by Gary Kremen, founder and ex-CEO of Match.com, the world’s first major dating site and one that set the standard for much of the web as it developed. “I actually started Match.com trying to find love for myself”, Gary admits. “I had this idea that if I could put all the women in the world on a database, and I could sort it, then I’d just marry number one.” It is not every day, of course, that a yearning for companionship gives rise to a multi-billion dollar global industry, but Gary is not an everyday person. Already a successful digital entrepreneur before he started Match.com, Gary’s tale is one of sharp business acumen combined with an understanding of what makes people tick.
Gary was born in Illinois in 1963 to two teachers. From an early age it was clear that he had a formidable intellect. However, early disciplinary problems at school held him back and he was frequently in trouble for minor vandalism and computer hacking. Despite not having the best grades, Gary used his entrepreneurial instinct to ‘pitch’ his qualities to Northwestern University, a strategy that worked. Graduating with a degree in business and computer science in 1985, Gary worked as an engineer at the Aerospace Corporation for two years. It was while working here that he was first introduced to ARPANET, the US Department of Defense’s early precursor to the World Wide Web. Although it was a secure job, it was dull, and Gary’s mind soon drifted to grander things. After taking night classes in accounting, he decided the time was right to go to Silicon Valley to earn his millions in the technology industry, and he turned down a prestigious scholarship at the University of Chicago to seek an MBA in California at Stanford Graduate School of Business.
A digital generation
When the time came for Gary to start his own business, there was one area in which he boasted almost unparalleled expertise – the online world. “I was a nerd, okay!” says Gary. “I was online as early as 1985. How many people can say that?” This proficiency, combined with the skills he had learned while completing his degrees, gave him an advantage over the many would-be digital entrepreneurs in Silicon Valley in the early 1990s. Gary’s first venture was Full Source Software, co-founded in 1991 with partner Ben Dubin. Full Source would download software from Usenet (an early internet community that preceded today’s commercial internet), putting it onto physical media for sale in bulk to large companies. The company was a moderate success, but it gave Gary an early glimpse of the enormous commercial potential the World Wide Web had to offer.
A female genesis
In 1989, Gary co-founded his second venture, Los Altos Technologies (LAT), a company that cleaned sensitive data off hard drives for the military and other businesses. (The company was sold to an employee in late 1992 and is still going strong.) While working at LAT, Gary noticed something important: large purchasers were beginning to use systems like IBM’s Lotus Notes, enabling administrative staff to send electronic purchase orders without the help of IT staff. It may sound insignificant now, but Gary saw what it meant: an increasing number of women were using these tools to go online for the first time. “It was the first time I noticed women using the internet”, Gary explains. He was an avid user of what were known as ‘900 number’ services: telephone based dating agencies that enabled people to meet potential partners in exchange for a fee. He realised that the crux of these services’ success was their network of users, and he saw similar potential in the small but growing presence of women online. “It got me thinking, ‘I wonder if I could do what they do – and charge access to these women?”‘, he says. The relatively tiny female population online at the time (around 10% of users) did little to faze Gary – in fact, it encouraged him. “Because there were so few women, I realised that this was the key”, he says. ‘If you control the few women, you can charge a lot of money to the men.’ Gary saw the huge revenues that print media made from classified advertising, and from dating ads in particular. At the time, newspapers such as the Los Angeles Times made 10% of their total revenue from personal dating services and 40% overall from classifieds. But he also saw that the industry was slow to react to change and had some key flaws, such as slow turnaround time, lack of anonymity and potential for embarrassment. These were all problems that could potentially be solved by a secure, anonymous and instant online classifieds business. Out of these insights came the idea that would change Gary’s life and set him on the path to becoming one of Silicon Valley’s best-known entrepreneurs.
In 1993 Gary set out to realise his vision and founded Electric Classifieds, Inc. (ECI), under which Match.com was developed. The original name of the company was a reflection of the wider vision Gary had for the business: ECI was to be a billion-dollar online classifieds empire with dating being a headline-grabbing way of getting people to look at the internet in a new way… This exclusive extract is taken from the Match.com chapter, in How They Started Digital: How 25 Good Ideas Became Spectacular Digital Businesses, published by Crimson Publishing. To read the full chapter and find out more about their start-up story, as well as the inspirational inside stories of 24 other top digital businesses (including Groupon, Etsy, ASOS, Twitter, TripAdvisor and Wonga), pick up your copy of How They Started Digital, available on Amazon now.