Article reprinted courtesy of CrainsCupid is a cash cow for this firmFebruary 17, 2012 | 3:14 pm by Anne Fisher
Like many New Yorkers who put in grueling hours at the office, Clifford Lerner had little time for a social life. As an international equities analyst at Lehman Brothers from 2000 to 2005, “I had to get up at 4:30 a.m. to be at my desk by 6:00, so I could look at what was happening in the overseas markets before the New York markets opened,” he recalled recently. “So I was usually in bed by 8 p.m. That’s tough when you’re in your 20s. It’s not conducive to enjoying much nightlife.”
After five years, he said, “it was time for a change.” So, together with his brother, Darrell, who had some previous e-commerce experience, Mr. Lerner started a company called Snap Interactive. Its original product: a dating site, IAmFreeTonight.com, designed to help people with hectic schedules make last-minute plans to go out on the town.
The site has since evolved into its current form, AreYouInterested.com, a Facebook application that serves as an online meeting place for singles from all over the world. So far, 139,834 New Yorkers have used the app, and 37,753 have downloaded the AreYouInterested mobile app onto their iPhones.
Playing Cupid has paid off: Launched with about $200,000 in seed money the brothers raised from friends, family and their own savings, Snap Interactive (OTCBB symbol: STVI) now has sales of about $22 million a year, with 11 consecutive quarters of revenue growth. Some 55 million users have installed the Facebook app, and about 35,000 singles a day put up new profiles. Creating a profile and browsing others’ is free, but premium membership—which includes features like sending and receiving unlimited messages—costs $19.95 a month.
“For a dating site to work, you really need millions of users,” noted Clifford Lerner. “A lot of our growth has been a result of great timing.” Snap Interactive built its Facebook app in August 2007, when the platform was just a few months old (Facebook had started enabling apps in May of that year). Early adopters came on board in droves, “so we had 10 million users before we ever spent a penny on marketing,” he said.
The company, which had 15 employees a year ago, now has 38. One recent hire is Chief Financial Officer Jon Pedersen, formerly of Warner Music Group, who joined Snap Interactive in November. “We spent six months looking for the right CFO,” said Darrell Lerner. “We really needed someone who had been a key player in a big company, who could help us manage fast growth.”
The secret to riding the rocket, he added, is to “focus on your core objectives, even if it means passing up some opportunities that may look tempting.” Clifford agreed: “We’ve been asked why we don’t launch another app, like for instance a social game, since those can be hugely profitable. But dating is what we know, so we’re continuing to focus on that. If you stick with what you’re good at, everything else takes care of itself.”
AreYouInterested.com has introduced plenty of happy couples—some of whom tell their stories of romance and marriage at www.snap-interactive.com/success
—but what has it done for the Lerner brothers’ own love lives? “I met my wife three days before AreYouInterested launched,” said Darrell. They were married last summer. As for Clifford, he’s still single, which he thinks “really helps us understand our customers.”