The problem with Smartdate

Nov 22, 2011
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For anyone who has been following the story concerning French dating startup Smartdate, there is clearly a lot of intentional ambiguity. For the moment, the investors in the company have either refrained from commenting or simply stated that there was a mutual disagreement that has left the company’s future a bit up in the air (potentially with some of the investors leaving the board).

Difficult to know what happened.

Clearly the site is still active – and as Jonathan Benoudiz brought to my attention on Twitter, the company appeared to be hiring even on the 31st of October. Um, weird. Regardless of the fact that the founder Fabrice Le Parc maintains that his site has 4.5 million users, I’m somewhat dubious as to how the site managed to multiply its user base by 7.5 in 1 year (there has been some discussion about this on this site – stating that there were potentially fake profiles or multiple profiles for the same person). In addition, Smartdate may’ve had a bit of an overly aggressive customer acquisition strategy – which included reimbursing clients that had signed up for other dating services, apparently. But regardless of the number of users, the problem – according to Fabrice – lies primarily what happened when he launched in the US.

Fraud.

According to Fabrice, the US (which is every European tech company’s most desired market to conquer) presented a number of various problems for the company. He states that he had issues working with affiliates and that it was easy for people to feign their way out of payments with credit cards – and this in turn caused the company to lose a lot of money. Hmmm. Clearly there is evidence company having issues with scams – although interestingly enough, Google results displays that these issues came from the company and not necessarily the other way around (I admit that you do get similar results with other “reputable” dating sites as well). I don’t want to sit here and point fingers – but something is a bit off. I do realize that sometimes competitors like to go secretly post as fake users having problems with the site, but still.

The Meetic lawsuit.

In addition to the payment issues that Smartdate encountered in the US, it seems Meetic has also not been very appreciative of some of names they used in a social game they developed – which resulted in what appears to be a mini lawsuit. Currently the only information that I have on this situation comes from Fabrice, so I can’t really comment further on what happened here.

OK, what now?

As many of you know, I am a huge advocate of openly discussing reasons for failure and I this this would be a great occasion for France to learn how to properly approach such a situation rather than sweeping it under the rug. But at the same time, I definitely do respect the different stakeholders’ desires to refrain from commenting and not to launch into a heated public debate about what happened. It’s definitely a touchy subject from all angles. What is clear is that Fabrice Le Parc has decided to move on to a new project – a “2 for 1” deal site called SquareChic that is a bit of an alternative to the Groupon daily deal model -and from what he tells me, he no longer has a relationship with his investors. The future of Smartdate seems relatively unclear – if there are 4.5 million users, it would really be a shame to let them all go to waste. For now, it seems that the product will continue to be online but that there will be no further investment to develop the product or the company. Despite my lack of affinity with the various dating sites in France, I refuse to believe that this problem comes from the market.