In just two years, the dating app Tinder has racked up an impressive number of monthly users -- 18 million active, 36 million registered -- and has been valued anywhere between $1 billion to a potential $5.5 billion as a standalone company.
With that kind of money at stake, the Barry Diller-led IAC, which owns a majority of Tinder, decided the app's founder and chief executive, Sean Rad, is no longer a match made in heaven. Rad, a University of Southern California business school dropout and entrepreneur just shy of his 30th birthday, will soon be ousted as CEO, Forbes reported on Tuesday. He will act as president and remain on Tinder’s board, and will stay on as CEO until they find someone to replace him.
This caps a year of drama for the company and its founders.
Many trace Rad’s ouster to a lawsuit filed in July by former Tinder exec Whitney Wolfe against her then-boyfriend and co-worker, former CMO Justin Mateen, who remains Rad’s best friend. Mateen is credited with seeding Tinder with the right social influencer group – “elite party schools,” according to Forbes – including the University of Texas at Austin and USC. It didn’t take long for other universities to catch on. Mateen also brought Tinder to the athlete village at the Sochi Winter Olympics, where elite athletes hooking up via Tinder became international news and brought over a billion people to the service.
After an acrimonious breakup, White sued Mateen and IAC, accusing Mateen of sexual harassment, documented in texts considered “racist, sexist and crude,” and alleged that Rad stripped her of her title as cofounder because she was a woman. She also claimed that she was wrongfully terminated by Rad. Although Wolfe settled out of court, Mateen stepped down in September, and there appears to be a link between the Rad's ousting as CEO and the lawsuit. According to TechCrunch, "the lawsuit brings into question whether or not his [Rad's] judgement was harmed by working so closely with his best friends."
“If the Whitney thing didn’t happen, it would be difficult for IAC to demote Sean, because they’d have a lot to answer for,” an anonymous source close to Tinder told Forbes. “But the lawsuit gave them an out.”
Tinder may not be unique in having C-suite dramas, but its technology is unique among dating apps. Tinder doesn’t involve questionnaires or, initially, any words at all. The user links up with Facebook, and the app then sends pictures of potential dates in the user’s proximity. With a swipe to the right, the user “likes” the potential date; a swipe to the left is a no. If both people like one another, Tinder hooks them up to chat. The swipe design was created by co-founder Jonathan Badeen.
“If I approach a stranger at a bar,” Rad told Forbes, “I’m nervous about being rejected and the other person feels hunted. We get rid of all that.”
In addition to eliminating “the fear of rejection,” Rad says Tinder replicates, in an app, “catching someone’s eye across the room.” It also adds a “gaming element,” according to Forbes writer Steven Bertoni, and the voyeuristic pleasure afforded by Instagram.
A perfect combination for the multi-tasking millennial.
At Forbes’ "30 Under 30" summit last month, when Rad heard he was ousted from his CEO position, he presented his ideas for monetizing Tinder with premium features. Its travel feature will allow users to find -- and swipe -- potential dates around the country and world, rather than be limited to those close by. And the second feature lets users “undo” profiles they swiped left.
“Sean has exhibited tremendous strength in building Tinder’s brand, users and product,” Sam Yagan, co-founder of OKCupid and CEO of The Match Group, a division of IAC, told Forbes. “We wouldn’t want to do anything that lessens his leadership in those areas.”