First of all, how are you and your family doing in these COVID-19 times?
Oleg Gervalov: I spent austere times of COVID-19 in New York, where the atmosphere was rather scary. Wall Street resembled scenes in a film-apocalypse. I remember when the Financial district was empty, and people were rare in the streets.
Anyway, we understood that the most effective way to help the immune system was to spend time outdoors. Taking into account all the precautions, we did our best to enjoy spring and summer in New York.
Tell us about you, your career, how you founded KeYou.
Oleg Gervalov: Originally, I’m an entrepreneur who launched startups in different spheres. In 2015 my company became a pioneer in the premium dating market in CIS. With my partners, I launched a dating app, Denim, with over 1M+ users and $1.5M+ annual revenue in 2019. The app was in the top 10 dating apps in Russia in 2018 and was awarded several times. In 2019 I successfully sold the product and exited the business.
In 2020 we launched a so-called datertainment platform for gay zoomers in the US. I came to this idea when I met a gay man named Joshua. I caught up in a bar in New York. We played billiards and had small talk about dating apps he used. Joshua complained about Grindr, where people are mostly looking for hookups and constantly send him nude pics. Unfortunately for him, he had a lack of communication there, and this is the reason why he constantly went to his favorite bar, where he chatted with regulars and newcomers and played billiards.
During the COVID-19 outbreak, all the bars were closed. Lots of them are still closed. Joshua had lost his communication spot, and apps he used couldn’t help him find friends for chatting, sharing thoughts, moments of his life, and so on.
There are hundreds of thousands of guys like Joshua. They have similar requests. Users need a safe space for self-expression, and their full potential realization, a safe space to spend time online.
Deeper connections in a Post-COVID world matters more than casual hookups. That’s why guys like Joshua started using dating platforms for entertainment and socializing. My team and I saw new opportunities in this “new normality,” and we launched KeYou – a datertainment platform for LGBTQ zoomers.
How does KeYou innovate?
Oleg Gervalov: We engage users with live streams and immersive dates, offering our audience to enrich their experience by sharing virtual space, music, and online games.
How the coronavirus pandemic affects your business, and how are you coping?
Oleg Gervalov: During COVID-19, you either dated online or did not date. We saw dating services had drifted to social networks and entertainment platforms. Previously, users signed up in dating apps to find a partner and then found ways to entertain each other. Today, they join dating for entertainment and match other people through it (an increasing trend for the time spent in dating apps has started even before the coronavirus).
That’s how “datertainment” (dating+entertainment) emerged. It’s especially urgent for Gen Z representatives, who are less interested in one-night-stand and hookup culture than older generations. Moreover, COVID-19 has minimized hookup (one-night stand) even for older LGBTQ representatives. When everyone is staying home, it simply does not make sense. Add to it the frustration caused by what was going on. That is why users started looking for a deeper emotional connection with potential partners.
Zoomers get used to creating content rather than consuming it. Just remember, as your home phone was always busy 15 years ago. The youngest generations do the same, but instead of home phones, they use live streaming, video group chats.
The future in 5-7 years perspective belongs to Generation Z, the so-called digital generation. Gen Z is the loneliest generation in America. The product to fill this gap for the younger generation is still missing. We create a service for them that meets behavioral patterns that are overlooked by popular apps because they are oriented on older generations. This way, we solve the problem of loneliness among LGBTQ members younger than 28 and create a future-oriented service.
LGBTQ members feel lonely more often than straight people. In general, experts referred to the level of loneliness in Americans as “epidemic”. 61% of Americans feel lonely. This number grew 7% (year-to-year) in 2019. Where we will be by the end of 2020 can be predicted considering the coronavirus outbreak. It is highly likely that “Social distancing” and “Self-isolation” will become the words of the year.
LGBTQ zoomers are the people who have adopted new habits. According to surveys, 45% of American students, who use Tinder, don’t have any intentions to meet people in real life. They use the app for confidence-boosting procrastination. Moreover, 70% of Tinder users have never met anybody in person.
Nowadays, the dating industry grows not only by time spent in apps but also by the product life cycle, revenue, number of market players, personnel hired, technical complexity, etc. Coronavirus has just accelerated this trend.
It is worth noting that CAC (Customer Acquisition Cost) has significantly dropped during the pandemic (as we observed for absolutely different industries).
Positive unit economics has been largely boosted by the coronavirus outbreak. It had created a new reality when all the dating went online due to self-isolation.
Did you have to make difficult choices, and what are the lessons learned?
Oleg Gervalov: During the COVID-19 outbreak, we faced a difficult choice, whether to spend money on marketing and acquire new users or spend money on our team to make payrolls and support them. Finally, we decided to cut our costs on marketing and stopped our growth so as to save our team and support people in this difficult time.
How do you deal with stress and anxiety? How do you project yourself and KeYou in the future?
Oleg Gervalov: I have a great team behind me, and guys need inspiration and vision for the future. Strong bonds in our team help me to be active and not surrender. Under these circumstances, I can’t be beaten by stress and anxiety.
As for the future, we aim to create a cutting-edge product that meets LGBTQ zoomers needs.
Who are your competitors? And how do you plan to stay in the game?
Oleg Gervalov: Our competitor is Yubo. In this app, representatives of Generation Z mingle in group video chats without any goal to meet somebody in person. This year, the number of Yubo downloads has grown from 700k to 4 mln as monthly revenue has risen from 300 K to 1.8 m dollars during the first wave of coronavirus.
We are different from the competition. While Yubo offers live streams and social networks, we see datertainment as a future.
Your final thoughts?
Oleg Gervalov: We should understand that the problem with COVID-19 will be solved once, but the habits we got will remain with us. The prosperity of a business depends on how entrepreneurs will be able to support these new habits.
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