Boasting over 1.3M users, Japan’s Eureka tackles online dating with data-driven approach

Eureka CEO Yu Akasaka (right) and Jun Nishikawa (left)

See the original story in Japanese.

Japanese startup Eureka has an office in Ebisu, Tokyo. Since its launch in 2008, the company has provided mobile apps like Pairs and Couples. We recently visited the office to hear from the company’s CEO Yu Akasaka and COO Jun Nishikawa.

Boasting over 1.3 million users

In July, Akasaka and Nishikawa co-founded a company focused on incubating and investing in startups in Japan and the rest of the world, called Eureka Ventures. In association with DeNA and other companies, Eureka Ventures participated in a $500,000 investment round in East Meet East, a New York-based online dating service for Asian people. Eureka expects that the partnership through this investment help their business grow further while exploring a business synergy between the North American and Asian markets.

Since its launch two years ago, the Pairs app has acquired over 1.3 million downloads from the Japanese and Taiwanese markets to date, with about 500,000 users users coming from Taiwan. Given the high penetration rate of Facebook and a pro-Japanese attitude, they attempted to focus on marketing in Taiwan, becoming a big success.

Akasaka explained what prompted them to start developing the Pairs app:

There are many online dating services in the North American and North European markets. But we thought this sector is not yet well established and still had much space for growth. Typical online dating sites may give you a negative impression, so we understood the importance of changing the culture to improve it.

After shutting down two mobile apps

Eureka has actually introduced four apps to date: Online dating and marriage hunting app Pairs, memory sharing app Couples, app discovery app Peepapp and its antecedent Pickie. But the latter two services have already been shut down.

Following other users, Peepapps allowed you to peep what apps they were using. But it was too early because there was no trend among people exploring a new app on a social basis. Regardless of support from a big company or a big promotion budget, we learned through our experience that a service not in step with the times would be never accepted.

After shutting down the two services, Eureka had been exploring the next business to take on while handling cultivation of contracted software development businesses. Nishikawa subsequently came up with an idea for an online dating service:

When it comes to a new business idea, we wanted to create one which is obviously monetizable. The online dating sector is becoming integrated and has a solid revenue model. I believed a huge potential is out there because I saw many friends around me using such service when I was abroad to study.

Adopting a data-driven approach

Despite the fact that the Asian region is considered a ‘Blue Ocean’ market for them, there are many competitors in the online dating sector. What is a key advantage behind their steady growth?

The two co-founders have strong backgrounds in marketing through their experience working with e-commerce businesses. They attach much importance to metrics like customer acquisition cost, lifetime value or conversion rate, and are adjusting the service in line with the data-driven approach that they have learned from their previous business experiences. Akasaka elaborated:

We keep seeing metrics and improving the app every day. In addition to various metrics and user feedback, we’re sharing figures like how many times the app has crashed in our entire team so we can run a PDCA cycle very quickly.

Improving user experience to satisfy user needs

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Akasaka pointed out that both the product itself and the promotion effort combined make a big success. These are directly linked with behavior which they have been developing the app toward, from the user’s perspective.

Akasaka explained how they are making efforts to improve the app:

We launched a new version of the Pairs app for iOS and Android on August 21, where we rolled out various improvements. For example, typical online dating apps show you square-shaped profile photos but we changed it to round-shaped ones, which shows less numbers of candidates in a first view screen. This is a very minor change but creates a world view different from that of conventional dating sites, which makes users easier to sign up.

Nishikawa added:

While our desktop version looks like Facebook, the iOS app has adopted a similar interface to Line. Considering apps that our users are using most often, we are improving interfaces of the service for devices accordingly.

We can see their thoughtfulness in the well-designed interface. For example, they use an elaborate design in the app screen so you will not have to worry about a peep even when you are using the app in a crowded train. That’s from considering Japanese women’s typical concern that they hate anyone knowing about them using an online dating app.

Educational activities needed in any markets

The Pairs has acquired over 8 million Facebook likes, over 1 million monthly active users, and matched over 4 million couples in total.

However, once a user finds a good partner on the Pairs app, he or she will quit the app shortly. How did the team address this issue? In a response to my question, Akasaka explained:

It doesn’t matter. If a couple step into the next phase, they will start another of our apps, Couples. Even if their relationship doesn’t work out, they will get back to us and start using the Pairs app again.

As Akasaka now thinks that they can grow the service tenfold, he aims to educate people and improve their negative stereotype about encounters through online dating services. Nishikawa explained how they will proceed from here:

We invested in New York-based online dating service East Meet East a month ago. In a recent discussion with the team, they told us even Western couples are not willing to unveil that they have met each others using an online dating service. So this education process will be needed globally. We’ll be devoting ourselves to it.