An uncomfortable truth: The Tinder lawsuit will have very little impact on the company's growth

By Michael Carney , written on July 1, 2014

From The News Desk

Tinder, the hookup app that’s known for people thinking and speaking with parts of their anatomy other than their brains, has apparently been an all too accurate reflection of one of its co-founders. Tinder CMO Justin Mateen stands accused by former VP of marketing Whitney Wolfe – an ex-girlfriend and former direct report – of sexual harassment (full complaint). The company, its CEO, and its parent IAC-owned stand accused of knowingly letting such abuses occur and wrongfully terminating Wolfe when she called the behavior into question.

Mateen has since been suspended, with IAC offering a statement that reads:

Immediately upon receipt of the allegations contained in Ms. Wolfe’s complaint, Mr. Mateen was suspended pending an ongoing internal investigation. Through that process, it has become clear that Mr. Mateen sent private messages to Ms. Wolfe containing inappropriate content. We unequivocally condemn these messages, but believe that Ms. Wolfe’s allegations with respect to Tinder and its management are unfounded.
The allegations, if true, are utterly disgusting and there's no place for behavior like that alleged of Mateen in any company. But the uncomfortable truth is that the lawsuit, however it turns out, is unlikely to have much of a long-term impact on Tinder.

From the end user perspective of your average 16- to 30-year-old singles, Tinder’s culture is already casual and often over-sexualized. I mean, this is a company that's created a new way to objectify people: Not exactly a bastion of morality and ethics that’s suddenly been tarnished by the irresponsible actions of one of its founders. Early on, the founders would put “Tinder Founder” in their profile bios, using the resulting notoriety to pick up (lots of) girls through the app. Some of the founders, it seems, grew out of that phase: CEO Sean Rad is currently in a long-term relationship with a woman he met on the App. Others, seemingly, not so much...

Rightly or wrongly, users likely won't bat an eye at this latest development. For an analog, look no further than Snapchat, where CEO Evan Spiegel has been the subject of numerous scandalous reports – mostly stemming from his high school and college days – none of which have slowed the ephemeral messaging app’s insane growth. A total fictionalized movie version of Mark Zuckerberg didn't chill Facebook's growth either. As much as people like to say tech founders are the new celebrities, most end users just don't care about the personal lives of those who bring them the latest killer apps.

From a business perspective, things get a bit murkier, but I still don’t see Tinder faltering materially. For starters, Tinder hasn’t rolled out any advertising, so there's no customers to be too concerned about its public image. And because the company is majority-owned by Match (and it, by IAC), it won’t be fundraising or looking to sell anytime soon either.

The only source of near-term pressure would be from one of Tinder’s more established parent companies or their respective advertisers and shareholders. But don’t hold your breath. Most people don't even realize Tinder is part of IAC. This may seem like big news in startup land, but on Wall Street IAC’s stock is up more than 2 percent in early trading today.

Even the effects of Mateen’s (and Wolfe’s) departure should be minimal to the company from an operational point of view. Sure, he’s a co-founder, but both internally and externally, Rad has long been the face and the backbone of Tinder. And with the platform already at scale and its virality well established, marketing is less of a make or break function day in and day out as it may have been earlier in the company’s life. Add to that the fact that, through Match and IAC Tinder has access to all the personnel and financial resources that it could ever need and any near term gaps left by these senior departures will be quickly filled.

Where the impact may in fact be felt is when Tinder looks to move beyond “dating” and become more of a general-purpose matchmaking platform serving business and social users as well. Rad has been selling this vision for a number of years now, although it’s always been a hard one to believe. But, if Tinder’s reputation as a hookup app wasn’t already enough to dissuade professionals and soccer moms from using it to facilitate meetings and playdates, the company’s founders facing sexual harassment allegations won’t help. But again, this was already a long shot. Dating is where Tinder’s bread is buttered and that audience will likely view this news as immaterial, if they even catch wind of it to begin with.

Let's be clear again: None of this is to excuse the alleged disgusting behavior. We've written before about the disturbing rise of the “Brogrammer” culture in the startup ecosystem, just as women were starting to make some founder in roads. It's horrific on a personal level. But in the case of Tinder, it’s likely too much to expect that this incident will have any lasting effects on the business -- as much as we may wish we live in a world where that happens.

[illustration by Brad Jonas]