The Challenge of Making Sex a Viable Business Model

The relationship between sex and technology has advanced dramatically over the past few years. The “sextech” industry, as it is now known, is expected to be worth $50 billion by 2020.

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Mar 11 5 min read
The Challenge of Making Sex a Viable Business Model

The relationship between sex and technology has advanced dramatically over the past few years. The “sextech” industry, as it is now known, is expected to be worth $50 billion by 2020. Analysts are beginning to realise the potential opportunities available in this previously unspoken about industry.

Encompassing any kind of technology that enhances or disrupts human sexuality, sextech has been described by many as one of the key areas that will drive future tech. From apps to hardware, VR to robotics — the sector is making huge progress, with significant implications for both culture and business.

In spite of this impressive growth, there are still huge obstacles that remain for sextech companies just starting out, with the stigma surrounding sex continuing to rear its ugly head. When we first launched MysteryVibe, we struggled to find funding and the best manufacturing expertise and our eyes were opened to just how niche the industry was that we were looking to break into.

How can we take sex, which is as natural as eating and sleeping, and create a viable business model for the companies of the future?

The Challenge of Making Sex a Viable Business Model                                             Image from gettyimages

Finding Talent for the Sextech Industry

Historically, it has been difficult to find qualified people to advance technology for sex. Talent, such as engineers, developers or lobbyists do not train with this industry in mind — instead setting their sights on careers with mainstream tech giants.

Potential founders and employees also struggle with the fear of what other people might think — or that future employers outside of the sex industry may judge their choice. One of the most common questions I get asked when I tell people what I do, is what my parents think of it.

The good news is that in the past couple of years, more talented people are realising the tremendous opportunity that is sextech. We’re starting to see many start-ups break through — many of them with women founders at the helm.

Mainstream Press and the Sextech Industry

In many cases, sextech is seen and considered very separately to other parts of the technology industry. It’s treated as a novelty, clickbait, or just something to tease and titillate readers.

The Challenge of Making Sex a Viable Business Model

                                             Image from gettyimages

Getting your core messages out to the world in a clear, consistent and authoritative way is a challenge for many sextech businesses. A lack of research in this space means it’s difficult to find trustworthy statistics to ground your pitch, and sensationalism means you have to pick your outlets and journalists carefully.

This being said — when you do manage to get your message across, it really resonates. Key titles, such as the BBC, Wired and Mashable, are starting to explore the industry in more depth and renowned spokespeople, including Cindy Gallop, are making waves in tacking outdated perceptions of sex and technology.

Sales and Distributing Sextech Products

As if designing, building, prototyping and manufacturing wasn’t hard enough by itself, once you do have a product ready for retail, your distribution is somewhat limited. Especially for the luxury side of the market; finding good retail partners is key for your brand. Mainstream stores are still extremely cautious about products of this nature, worrying that it may tarnish their reputation or put off their customers.

However, the industry is making significant progress. Selfridges now stocks a select few sex toys in its stores, and department & luxury stores in other countries, such as Galaxus in Switzerland, have also joined the sextech revolution.

The Challenge of Making Sex a Viable Business Model

                                             Image from gettyimages

While bricks and mortar shops are a little way behind, online retail is speeding ahead — providing customers with the ability to shop from the comfort of their own homes, and receive products in discrete packaging. Amazon, for example, now stocks more than 60,000 adult products in their global stores, many with Amazon Prime for speedy delivery.

We are also slowly but surely tackling the technology trade shows, such as CES and Distree which have helped develop start-ups into internationally recognised companies. A few years ago, it was unheard of for sextech companies to showcase their products at these shows, but we were delighted to be at both recently as pioneers in the sector. These breakthroughs for us are also monumental for the wider industry, as they demonstrate the changing attitudes within the tech industry.

Finding Funding for Sextech

Finding sources of finance is difficult, for every start-up in every industry, but it is much harder when you operate within the adult business. Start-ups in other industries are able to utilise avenues such as venture capital investment, one that is completely unavailable for those in sextech — meaning that you either have to self-fund, crowdfund, or find angel investment.

The good news is that investors are out there. We are fortunate in having a group of incredibly passionate and knowledgeable angel investors, with whom we’ve raised approximately £1.6 million over two years.

We’ve also adapted a partnership model — whereby our software, design and other partners are compensated by revenue share, minimising the upfront capital costs for us.

Sextech remains an elusive industry, with those both inside and out of the industry still struggling to quantify the rate it has grown in recent years. However, it is an exciting time for young companies looking to make their mark. We have witnessed some incredible innovations which have shaken up an industry previously dominated by a select few. I am excited to see what is around the corner.

This article was first featured on Virgin.


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