Tinder's CEO demoted following sexual harassment lawsuit

IAC demoted Sean Rad to president of the company

Published November 4, 2014 6:00PM (EST)


The CEO of dating/hookup app Tinder was demoted, according to a report from Forbes. Sean Rad, who co-founded the app, will retain his status as founder and remain president of the company.

Rad's ouster comes shortly after a widely publicized sexual harassment suit, in which former vice president of marketing Whitney Wolfe alleged that she was harassed by her ex, former CMO Justin Mateen, stripped of her co-founder title and shoved out of the company. The suit was settled out of court in September, netting Wolfe a little over $1 million. Mateen, who allegedly called Wolfe a "whore," bullied her during meetings and sent her abusive text messages, was forced to resign.

The Barry Diller company IAC owns a 60 percent share of Tinder. According to Forbes, IAC had been looking for a way to demote Rad, and the sexual harassment case provided perfect cause. From Forbes:

"IAC was not about to watch its new potential cash machine get derailed by more amateur mistakes. Rad had the title of founder, but he didn't have control over his own fate at the company. Which led a few weeks later to the call [in which Rad was demoted]. '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,' says one insider. 'But the lawsuit gave them an out.'"

It was not just the lawsuit that convinced IAC, but also money and the manner in which Rad ran Tinder, which ValleyWag calls a "club" rather than a company with ethics and standards. Again, from Forbes:

"Desperate, Rad canceled his flight back to L.A., and instead took Amtrak north to New York City and IAC’s famous Frank Gehry-designed headquarters. 'Things were going so well,” he says. “The company was growing faster than ever, we were about to launch revenue, my relationship with Sam [Yagan] could not have been better, and we had got through the whole sexual harassment suit.' His goal, as he sat down with Yagan and Blatt: 'I thought I could still convince IAC to change their minds,' says Rad."

"He couldn’t, and that ultimately boiled down to two things. The first is control. The root of this drama, which has everything Shakespeare could ask for—power struggles, betrayals, riches and sex—has more to do with barristers than bards: corporate structure. Would inexperienced young entrepreneurs like Mark Zuckerberg or Snapchat’s Evan Spiegel have survived their company’s rapid—and often painful—early growth stages without the bulletproof defenses they had built for themselves?"

The most disturbing part of the Forbes piece -- besides the not-so-subtle digs at Wolfe, and the writer dismissing the sexual harassment suit as a "he said, she said" affair -- is that Rad seems to have little self-awareness and a heck of a lot of entitlement. (This could be seen as a symptom of the insular, tech bro culture.)

Rad owns 10 percent of Tinder, and is still worth a boatload of money. And he is already predicting the company's downfall without him. "I might be naïve in saying this, but the soul of a consumer company is the product," Rad told Forbes. "You take away the product leadership, and the company dies."

By Sarah Gray

Sarah Gray is an assistant editor at Salon, focusing on innovation. Follow @sarahhhgray or email sgray@salon.com.

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Apps Ceo Iac Mobile Technology Sean Rad Sexual Harassment Tinder