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  • Disruption – Scaling an Application

    Posted by Carl from Chicago on July 1st, 2018 (All posts by )

    Today in the NYT they had an article about an online dating app called “Raya”. This tool is designed to let exclusive rich / celebrity folks match rather than being mixed in with everyone else on Tinder.

    From my perspective, the interesting fact isn’t what the application is “about”, but how easy it is to build a scale a worldwide tool with all necessary functionality. From what I can gather in the article:

    • The entire company is run with only 13 people, including technical staff
    • The platform is exclusive to Apple iOS, and costs $7.99 / month (if you are accepted, which is rare), with additional up-charges
    • This world-wide, fully functional app was built with limited investment and seed funding
    • The app was built and launched quickly, in likely a year or so (based on the dates provided in the article)
    Let’s look at how modern platforms and capabilities have enabled this sort of rapid delivery, scaling and enabling of a business model.  In the past, building a business such as this would have been a large-scale project.  By building it on the Apple iOS platform, however, the developer is able to tap into a huge amount of existing infrastructure, including:
    • Apple basically provides distribution through the iPhone, operating system, and entire infrastructure of the App store which includes billing 
    • Increasing power of the phone itself (likely all these rich and famous folks are on the latest models) enables advanced features and fast responses, as well as a consistent experience for users
    • The platform and embedded capabilities allow for rapid builds and prototyping, upgrades and security
    It is astonishing that such a ubiquitous and enabling platform exists, with the ability to scale to an essentially infinite degree, with little (to no) up front investment.  This platform and environment facilitates rapid prototyping, the ability to grow quickly (if there is demand for your app), and provides an entire environment for notifications, customization, etc… that you can leverage.
    If someone would have told you ten years ago that you could
    • Build a piece of software that can reach customers around the world
    • Scale up at a rapid rate with little or no upfront investment
    • Have billing, notifications, user experience, etc…. mostly done for you “out of the box”
    You’d think that they were dreaming.  And yet it is here, today.
    What are the implications of this?  I think that a lot of the assumptions that we make about how strong incumbent positions are, how fast challengers can emerge, and how low the barriers to entry are for many markets are incorrect.  Since the key demographics are already all mobile (and the majority of the highest income US consumers are on iOS), you can jump quickly into Apple and evolve rapidly.
    Since many companies today make little or no profits and “value” is the stream of future cash flows (when presumably the company will be profitable and able to capture and hold market share and customer revenues), the fact that competitors can rapidly come into your space with little incremental investment should make long-term investors shudder.  
    Cross posted at LITGM

     

    9 Responses to “Disruption – Scaling an Application”

    1. Anonymous Says:

      Ah yes the cloud, its a miracle. ;)

      The Apple system for its phones is less capable that the Google universe. Both do allow easy scaling,

      Its actually web server front end management. That’s interesting as the cloud is the same damn thing. Managed servers on the internet. The whole cloud deal came about when some smart management guy noticed that the load sharing webserver front ends make the actual servers unimportant as they had been largely visualized.

      It would be a lot of work but I could do that. The hardest part is getting the credit people onside and arranging the payment system and that’s what the big boys bring to the table. I have some understanding of store software, I have built them. I also have worked on load sharing front ends and the rest … is knitting. ;)

    2. Subotai Bahadur Says:

      Now there are rumors that I am not a nice person, but given the divisions in our country; I could pretty much bet that those who are involved with this are NOT politically or socially on my side of the divide. And that enough has been revealed here to make it possible for someone to make their lives fair to middling miserable for a while.

      If someone is planning 4th and 5th GW . . .

      Elitists gotta Elite. Which makes them stand out.

    3. Grurray Says:

      Raya seems like the logical end result of the meat market apps like Tinder. They’re already based on optimized photos and embellished online identities. That’s right in the wheelhouse of physically optimized models and casting couch lotharios. The NYT article even lists actors 50-something and 40-something who use the app, while the women are 20-something and 30-something.

      The way the dating/hook up world works right now is that 80% of the females end up mingling with only 20% of the males. And that’s actually a rather even ratio compared to the winner-take-all pre-modern historical standards. These mobile apps are just increasingly bringing us back to baseline of human nature.

    4. Mike K Says:

      Elitists gotta Elite. Which makes them stand out.

      It’s not really the “elite.” I used to read the NY Review of Books until I noticed that middle aged single women advertising in the personal stipulated “No Republicans!” I figured that middle aged single women who needed personal ads to get a date, or get laid, were limiting their prospects to Democrats or whatever else is out there, maybe that was not the group to choose my books to read.

      Claremont Review does a better job.

    5. Mr Black Says:

      As men are attracted to looks and not money (especially if they already have a lot of their own money) then how exactly does this app give any value for the women on it? They are likely to be middle aged if they have accumulated a good bit of wealth and that means their best days were 20 years ago. Men are going to notice this. Are there a lot of rich men looking to bed 45yo business ladies of aging appearance rather than their usual prey, penniless 25yo models?

    6. Jonathan Says:

      They are charging only $8/month for the Davos of dating apps. The article doesn’t reveal the number of users, sex ratio or age distributions of the male and female customers. They have a vetting process that may be difficult to scale and vulnerable to cheating. They aren’t profitable. They are exclusive and secretive but wangled a NYT interview for the founder. It looks like an unsustainable business that is trying to get bought out. Great strategy if it works.

    7. David Foster Says:

      It’s not clear that Dating & Mating is their only, or even their primary, focus. It looks to me like the site is mainly about status-seeking.

    8. carl from chicago Says:

      Ha ha Jonathan you are 100% correct. But you and I live in a fact-based world where businesses have to appear likely to make an actual profit or add value in the near future in order to have market value. Sadly we are out of tune with todays’ market cap leaders…

    9. MCS Says:

      Collecting 8 bucks a month from all the true “elites” that depend on a dating app sounds like a road to the poor house. On the other hand, 8 bucks from every 30thousandaire that wants a promotion from assistant branch manager to investment banker or hedge fund manager is probably serious money. The secret is a vetting process that only looks tough.