Lesson For Startup CEO’s: Don’t Torpedo Your Brand
Tinderâ€™s demotion of (soon-to-be former) CEO Sean Rad illuminates the need for brands to have the right face representing them.
Itâ€™s largely believed that Rad was ousted from his position due to his inability to maintain a culture that doesnâ€™t create such majorÂ PR and ethical problems as the sexual harassment lawsuit lobbied at Radâ€™s best friend, former Tinder CMO Justin Mateen (who was already generating negativeÂ PR Â before the lawsuit). While Radâ€™s ability to grow Tinder and create a mega-popular sensation is undeniable, his ability to foster an atmosphere free of harassment was clearly in doubt by his superiors at IAC, who own a majority of his startup.
Several CEOâ€™s have had to step down from their positions as the face of their brand for business reasons â€“ including Mark Pincus of Zynga, Andrew Mason at Groupon â€“ but those demotions typically occurred because the business was faltering. In Rad and Tinderâ€™s case, business couldnâ€™t be better, with a bright and lucrative future for the brand on the horizon.
Due to the sexual harassment lawsuit, Tinder had a rightful PR problem. Like Tinder, Uber is currently facing a barrage of negative press, in part fueled by CEO Travis Kalanick’s crass comments. Kalanick is better protected since Uber isnâ€™t owned by a corporation like IAC. However, his personality is affecting the brand and its lack of goodwillÂ and he’s definitely making the PR problem worse.
What the Rad situation highlights is the need for CEO’s, especially startup CEO’s, to represent their brands in a manner that is acceptable not only to their user base and financial overlords but to potential acquirers and stakeholders. That might mean running a tighter ship and not letting your best friends operate with impunity, or it might mean keeping your comments to yourself when it comes to press.
The â€œmove fast and break stuffâ€ motto of Silicon Valley is represented in their unorthodox, brashÂ manner of CEOâ€™s like Kalanick, Snapchatâ€™s Evan Spiegel and Rap Geniusâ€™s Mahbod Moghadam.Â That devil may care attitude might be okay when youâ€™re a new startup trying to establish yourself, but for brands on the verge, it presents a major PR issue. And these are just the CEO’s who don’t exactly say or do the right things in the public eye, let alone the growing subset of startup CEOs who have been convicted of committing crimes, like RadiumOne’s Gurbaksh ChahalÂ or NextDoor’s CEO Nirav Tolia.
Of course, every CEO wants to be a nonconformist like Steve Jobs and no oneâ€™s arguing that CEOâ€™s should be cut from the same cloth. But thereâ€™s a difference between making bold creative decisions and excusing sexual harassment.
Ultimately, all of this can be avoided if a CEO acts ethically and creates a supportive working environment, representing his/her brand in a professional manner. Unfortunately in todayâ€™s Silicon Valley, that might be easier said than done. There’s a reason thatÂ Valleywag seems to have no dearth of stories about startup CEOâ€™s behaving badly.