The problem with Smartdate

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.

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Author:Roxanne Varza

Silicon Valley native discovering the local tech start-up and entrepreneurial scene in Paris, France.

9 Comments on “The problem with Smartdate”

  1. November 22, 2011 at 2:22 pm #

    For dating site entrepreneurs, they don’t seem to have a lot of love for each other (sorry, I had to do that).

    As for Smartdate, its still unclear about what state it is in. Fabrice has said it’s “on hold” (and has been for 3 months). Conversely he talks about “relative” failure and on the viability of the product and its user base. Reading between the lines (for what that’s worth) and with the possibility of legal action (regardless of the merit) it looks to me like Fabrice is looking for an exit (again complete speculation). I think it’ll be a very hard sell if that is the case.

  2. November 22, 2011 at 5:08 pm #

    Roxanne : you make things look more complicated than they are!
    I am trying to be honest and explain as much as I can but then you are trying to find irrelevant elements that are confusing. It’s not so fair as I’ve answered all your questions..

    1. The site is still running
    2. We are not hiring (old job post)
    3. I have had very little contact with my former investors and regret it because I am a negotiator and a problem solver. You cannot negotiate with people who don’t communicate.
    4. Apparently I would be the first entrepreneur on earth to oust its VCs (while as everyone knows, they could have replaced me)
    5. If they disapproved so strongly about my “ways of conducting business” they would have ousted me.
    6. I regret, as they do, the choice I made in partnering with them. I regret that the funding with Accel Partners did not occur last minute as things would have been very different.
    7. I have admitted many time what I did not do right, but I refuse to take any more blame, and it would be foolish to think that I could have taken decisions by myself with a company with seven people on the board and 4 senior managers.
    8. We lost 2M€ with scam affiliates and chargebacks in the US. That’s because our payment provider Adyen had no clue about fraud scoring in the US and would not admit it. So for 3 months it looked like we had a lot of sales, we scaled marketing and in the end we got no money and fines from credit card companies, who have conveniently made them 10 times higher since this year. They noticed how much they were making by having merchants in sensitive businesses pay for fraud.
    9. Then again, this huge loss was recoverable. On another scale, Meetic lost 20M€ by trying out China. If you never take chances, you will probably not make it big.
    10. Overall I had a bad experience with the dating sector. The only great people I met were from eDarling. I am happy to move on to a very different business.
    11. Smartdate needed more than a year to scale, the product became great in July and we needed more funds.
    12. Instead of putting in more funds, selling the company was a very bad idea : wrong timing, wrong atmosphere, few buyers given our size.

    • November 22, 2011 at 5:42 pm #

      I must agree with Roxanne on the “Despite my lack of affinity with the various dating sites in France, I refuse to believe that this problem comes from the market.”

      However, Fabrice, to answer your comment, the feeling I get from your answer is that your investors wanted to make you pay for the US experience and didn’t want to put additional money into your business because they didn’t know what was going on. You then decided to “kill” Smartdate by not putting any more money / time into it and start a new project.

      If that’s the case, I do not understand why such proeminent entrepreneurs like PKM or M. Simoncini are being so direct with you and why no CLEAR answer was provided until now by either you or the SmartDate current team (Their credibility is being attacked by this article, Techcrunch’s ones, etc…)

      Again, I’m not saying you’re the bad or the good guy (Same for your VCs) but your answers, until now, have not been clear enough to be able to turn the page and move on to your next venture. All entrepreneurs can / will fail at one point but starting clean is also something which is key.

      I, myself, went into the entrepreneurship adventure and if I were to reach out to you for a project or investments (Or whatever other reason), a clear stand from you is more than necessary, at this stage of the story.

      Best regards

  3. November 22, 2011 at 6:24 pm #

    Pour mieux comprendre lisez un article écrit par un journaliste qui m’a posé des questions :

    http://www.journaldunet.com/ebusiness/le-net/fabrice-le-parc-interview-fabrice-le-parc-smartdate.shtml

    je suis choqué que Techcrunch reprenne mot pour mot les déclarations de mes anciens investisseurs. Un vrai travail de journaliste!

  4. November 22, 2011 at 6:25 pm #

    Antoine, best is you ask questions!

  5. November 24, 2011 at 12:45 am #

    I believe the A, B, ..E, F, J…X,Y,Z persons (which I believe are all the same guy) should stop their defamation campaign on the public forums against Fabrice. For several reasons:
    1- It is not the right place to resolve legal issues
    2- the readers are not competent enough nor do they have sufficient insight to take a stance
    3- I believe there is a legal system in France to which they can refer
    4- Giving an opinion is one thing, offending the guy is another thing

  6. Angry French
    November 24, 2011 at 7:50 pm #

    I’m about to be VERY rude to “Rude Baguette”, sorry about that, but there are things I can’t stand anymore. Among them that paternalistic approach you guys have towards french entrepreneurs that has to stop, for it’s very insulting.

    Refering to :

    “this would be a great occasion for France to learn how to properly approach such a situation rather than sweeping it under the rug”

    OMG, how much I hate when a 23 and a 26 years old think they can “Teach France” …

    You don’t “Teach France”. And the clichés about french mentality have to stop. You don’t know any real french, you just know entrepreneurs and students.

    Neither of you ever founded a startup either, so stop giving your advice and take it for a truth.

    This is called “péter plus haut que son cul” in French.

    • November 25, 2011 at 11:11 am #

      LOVE The rudeness – want to write for us?

  7. November 25, 2011 at 1:00 am #

    Hello @Angry French

    Sorry you feel that way. Actually, Liam and I are not trying to “teach” anyone anything. We’re just encouraging a dialogue so that people who HAVE founded and invested in start-ups can share their experiences. Neither Liam nor I pretend to have done that or pretend to be experts in relaying information on failure.

    Thanks for your Rudeness! 🙂

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