Blurred Lines in a Startup, and the Not-So-Sexy Truths
The concept of building an idea into a company is an alluring one for any entrepreneur: You have the potential to create something bigger then you’ve ever imagined.
But the alluring world of startups also has a dark side, one that can kill friendships and relationships. As former Tinder CEO Sean Rad once put it: “The blurred lines that make startups appealing to work at and to create are also what can be their downfall.” If you want your startup to prove a success, the needs of the business must supersede personal relationships.
As the executive of your company, you’re responsible for everything and everyone within it, which means you need hard lines of both communication and operation. At Tinder, Rad didn’t take the steps necessary to solidify his leadership once his “cool little app” started to become a phenomenon, and as a result found himself pushed out by investor IAC. (The alternate case is Facebook CEO Mark Zuckerberg, who is known for exerting tight control over many of the most important aspects of his business.)
At one point, Tinder enjoyed 600 percent growth over a 12-month period, as its matchmaking algorithms brought 14 million people together every 24 hours. But Rad found himself lost in a gray area: Building a company with friends makes it hard to differentiate business from personal.
Justin Mateen, Tinder’s co-founder and former CMO, faced a sexual harassment lawsuit from his ex-girlfriend, also an employee. While the matter eventually settled out of court, texts and other embarrassing materials related to the situation found their way onto the Internet, impacting the company’s reputation. As CEO, Rad was responsible.
At a time where your texts can end up seen by the world, it’s important to remember boundaries. Even if you’ve spent countless hours with someone, a relationship can break. If that relationship is somehow business-related, the breakage can lead to a loss of professionalism that, in turn, can wreck a startup.
It’s important for founders to remember that, although you’ve built something with people you possibly consider close friends, you’re still running a business. With a business of any size—dorm-room startup to international conglomerate—there are expectations, as well as boundaries set to protect both operations and people.
As a founder, it’s important to remember that in business (as in the law) there is a hard distinction between right and wrong. While the reasons why Rad was pushed out by IAC will remain foggy, perhaps he’d still have the CEO job if he’d remembered that he had a responsibility to keep his proverbial house in order.
Leaders create boundaries not only to keep HR nightmares to a minimum, but to protect people and ideas. Sometimes that means enforcing legal agreements that delineate what happens if something goes wrong. The defining moments of your company and its culture can come when things hit the fan. How are you going to handle your defining moment?
Till next month,
Image: Shutterstock.com/noppasit TH