What it's like to launch - then get fired from - the $1 billion startup you built

Entrepreneurs dream of building a startup that's as successful as Tinder. Sean Rad, 30, cofounded the dating app in 2012. Today, it has tens of millions of active users worldwide.

For the uninitiated, Tinder is like a "hot or not" game for single people. Users swipe through photos of other singles in their area. If they find a person's profile attractive, they swipe right; if they don't find the person to their liking, they swipe left. If two people swipe right on each other's photos, they become a match and can then message each other. To date there have been 20 billion matches.

But even when you have a rocket ship on your hands, running a startup isn't easy. Rad has been through cofounder drama, lawsuits, and a firing. A few years ago, he was asked to step down as CEO of Tinder. He had been dragged through a public lawsuit involving his cofounders and had given some heavily criticized interviews to the press.

From that experience, Rad says he learned an important lesson: It's lonely at the top. And being a good leader doesn't mean you have all the right answers all the time. "This idea of this perfect being who's the CEO doesn't exist," Rad says. "It's far from the reality."

Rad sat down for an interview with Business Insider in November, for our new podcast called "Success! How I did it." The podcast follows the career paths of business leaders who have achieved remarkable things. During this podcast, Rad explains:

• How he came up with the idea for Tinder, thanks to a cute girl in a coffee shop.
• When he realized Tinder was a hit.
• The marketing tricks his team used to make it go viral.
• What it's like to get fired from your own startup.
• His advice for people in leadership positions or who want to start the next Tinder.

When we recorded the interview with Rad, he was Tinder's CEO. In December, he stepped down as CEO (again) and became its chairman.

This interview has been edited for clarity and length. You can listen to the episode below, or keep scrolling for a transcript of the episode:

Success! How I Did It: Episode 1 Transcript: Sean Rad, Tinder founder and chairman 

Alyson Shontell: What does Tinder look like these days? How many active users and swipes?

Sean Rad: There are tens of millions of active users in over 196 countries. We've made 20 billion matches since we started [in 2012] ... Our mission is to create new connections and bring the world closer together and help people meet others they otherwise wouldn't have met.

Shontell: Let's go back to the pre-Tinder days. Have you always been interested in entrepreneurship? Is this what you thought you'd be doing when you were growing up?

Rad: I was always interested in solving problems and building things. I had a general curiosity, and when I would see a better path for something, I felt this annoyance in me, like I had to do something about it. But I didn't start this journey saying "I want to start a business" or "I want to be an entrepreneur." I just want to solve problems, and one thing led to the next.

Shontell: And the first business you started was in college?

Rad: I started a company called Orgoo while I was a freshman at USC. I was frustrated that I had to use all of these different accounts to communicate with my friends. I had my work email, because I was working at the time, I had my school email, my high-school email, my Gmail, and every different IM account. And I kept jumping from screen to screen, and this was before the mobile phone was what it is today.

I felt there had to be a way to bring it all together. That's what Orgoo was. It was a huge technical challenge, especially for someone who's never done anything technical. I had no background in computer engineering, but I just saw a better way that I could communicate.

Shontell: What happened?

Rad: Orgoo launched in 2004, and within the first three months it accumulated over 1 million sign-ups. One thing led to another, and we got wrapped up in some IP issues with another company and unfortunately had to shut down.

Shontell: You later joined something called Hatch Labs, which was part of IAC and where Tinder was born. What was Hatch Labs?

Rad: I joined Hatch Labs to help incubate companies that are starting to take advantage of different signal points you have with mobile ... I went to Hatch really knowing I was going to find one thing I really love. I don't like to be distracted by a lot of things. I like to throw myself into one thing. But I think it was a great place for me to experiment and find that one thing.

Shontell: So it was a startup incubator where you could test ideas and see what worked. One thing started there was called Cardify - it wasn't even Tinder. What happened there?

Rad: The idea for Tinder came about before Cardify. I had two ideas coming into Hatch. One was Tinder and one was Cardify. We ended up shelving Tinder to pursue Cardify. And in two to three months we developed Cardify. It was a local rewards program. Whenever you swiped your card at any business, we would give you points. You didn't even need to take out your phone. We just connected your credit card to the cloud.

We submitted it to the App Store, but Apple was a little hesitant because we were asking users to put their credit cards in the app and this was a foreign concept. It was right around the time Square started submitting their app (2012, 2013). It took us about 90 days to get approved.

So within that 90 days, I didn't want us to continue iterating without any customer feedback. It would have been a little pointless. We took that extra time we had and built Tinder. It was called Matchbox then. It wasn't the whole team - it was a few of us who went rogue.

Tinder was sitting there and [cofounder] Justin Mateen started marketing it. Right away, within days, we knew we had something. Looking at the engagement, we very quickly shuttered everything we were doing with Cardify. It was a hard decision but it paid off.

Shontell: What was the genesis story of Tinder? Did a lightbulb go on at some point?

Rad: The idea came about because - I'm still shy - but I was incredibly more shy four or five years ago. I was going through some personal growth, where I was really trying to understand why I had trouble and digest why I had trouble walking up to someone and introducing myself. It created so much anxiety.

Shontell: So you were single and you were having trouble walking up to women in bars?

Rad: Yes. Not even in bars, just girls I liked. One time I was sitting in a coffee shop with my friends and there was this girl across the room. I looked at her and she looked back, and I was like, "Oh s---, she caught me looking at her."

At first I was nervous, but then I realized, wait a second. Now she looked at me, she smiled, and she sort of let me know she's interested in talking and I no longer felt anxious. Then I started thinking about that and analyzing it, and realized that if you can eliminate the question of whether or not someone wants to meet you, then you would significantly take away the barriers to making a new connection. And that's where the idea for Tinder came from.

Shontell: Does that girl know she inspired Tinder?

Rad: No, I doubt it.

Shontell: How did you know Tinder was an instant hit?

Rad: We had the app. Justin was figuring out how to promote it. Then one day he took everyone's phones and spammed all of our address books, including his own. I thought, "OK, this probably isn't going to work, but let's try it."

We texted literally 500 people. Immediately, 80% of the people we texted signed up. The next day, we grew 50%. And I thought, "Wow, that's shocking." When we were looking at the metrics and the engagement was shocking. We had to fact-check what we were seeing.

It really set in when our friends were telling us their stories. One of my friends was telling me about how he never knew this girl who he would see all the time, was interested in him, and they started dating. Within a matter of weeks we were hearing all these stories and it shook up our friend group.

Shontell: So your friends were matching in ways they probably never would have.

Rad: People who knew of each other but never exposed any interest were now getting connected. So we immediately knew this could have a huge impact on society.

Shontell: Were there anything else you did to get that initial kick?

Rad: Yes. It was a funny story. Justin's younger brother was throwing a birthday party for his best friend at USC. And he had a bus going from USC to his parents' home. The bus was going back and forth, so a total of about 500 students. Justin called me one day and said, "Let's pay for the bus and call this a Tinder party." I was like, "It's some poor girl's birthday - what do you mean we're going to call it our party?"

So he called the birthday girl and asked, "Can we make this a Tinder party? We'll spend money and make it bigger and better" and she was really excited about the idea.

So we paid for the bus and put a bouncer at the door and told every student that they couldn't walk in unless they downloaded Tinder. You'd literally have to show Tinder on your phone. So about 400 people downloaded Tinder at USC, and I'm sure no one really knew what they downloaded when they walked in.

But then they went home and opened the app and started matching with each other. It really created a phenomenon within USC.

Shontell: It seems like it really caught on on college campuses, with the first being USC. Did you intentionally do the college-by-college thing?

Rad: We realized after that event that it was an effective means for getting the word out. We also realized our harshest critics would be college students. And if we can win our harshest critics then we can win everyone else.

Immediately after that, every afternoon the whole team would leave the office, get in a car, and we would drive by every fraternity and sorority in Los Angeles, then San Diego, then Orange County, and every school we could cover.

Every time we would go to sororities and fraternities and talk about Tinder, we would that night see 100 sign-ups. Every single sign-up in the beginning mattered. We were stopping people on the street, and we'd go into coffee shops and talk to each other like, "Oh, have you heard of that app Tinder? It's such a cool app!" Anything we could do to get the word out, we were doing.

I'd take out the app and say "Oh this is interesting! Who told you about this great app called Tinder?" and yell it in the coffee shop, so people keep hearing "Tinder" in LA. And then what happened - and this was nuts - we sort of cornered the West Coast, which is where we lived. Then in January everyone went home for break and I guess told their friends.

So in the beginning of January we had about 20,000 users, and at the end of January we had 500,000 users, all organic. The growth curve was unimaginable. It was pretty amazing.

Shontell: You had run other startups before Tinder. What's it like as an entrepreneur when you finally realize you've found something really special, viral, and rare.

Rad: When something is growing as fast as Tinder did, you don't think about it. You're up until five in the morning working. I remember days where we didn't sleep because Tinder was crashing and we had to refactor the prototype code that we developed to get a proof of concept. We were refactoring it while maintaining it because it was getting hit by users, and John and I were designing and Justin and Whitney and the whole team were thinking about new ways to get the word out.

It was a small team of 15 people that literally did not sleep for the first year. You just don't think about it because you're getting all this feedback from your users and you just focus on executing and delivering for them.

Shontell: How did you come up with the swipe? That's what I think really resonated.

Rad: The first design of Tinder was like a stack of flashcards and had an X and a heart. A lot of the core attributes of the product still exist. [Tinder cofounder] John Badeen came to me one day and said, "You know, people like to swipe on photos, and I think people should be able to swipe on this and put [the photo] into categories."

He had this image in his head where you're moving objects. What do you do with flash cards? You put them in flashcard boxes, and you put cards in stacks. He was envisioning - "I'm dragging something , and I'm going to create this thing called 'swipe.'"

I said, "Look, that sounds cool, but I don't think we have time for that. We have a whole backlog of issues. We can do it when we have time." In typical John fashion, he told me initially it would take two weeks, and then he did it on a Saturday night and showed it to me Sunday morning.

Shontell: You're 30 and you're in charge of a rocket ship. As a CEO, how do you learn to grow up in the public eye? There were times you did, sort of, step in it.

Rad: Look, I think Tinder has definitely grown as a company, and I've grown a lot in the process. I think the key to growing, whether it's within a company or as a human being, is to be humble enough to learn from your mistakes.

Admit them, recognize them, use them as opportunities to grow. Have the courage to say "I learned from that and I'm taking away some valuable lessons and I'm going to be better tomorrow as a result."

One thing we encourage throughout the entire company is a beginner's mind-set. It doesn't matter how much you've experienced. Don't have the attitude that you know everything and you know what you're doing, because then you might miss some very important things.

That's why a lot of times younger, less jaded entrepreneurs end up disrupting industries they know nothing about. Because they don't have any preconceived notions of how to do something and they're able to reimagine it.

At the same time, having the humility and that beginner's mind-set allows you to find creative ways to solve problems, and you learn through that process. You develop your own culture and ethos as a company. Each one of these learning points, both for me and the company, were moments when our culture developed.

Culture is really just the consequence of things you've learned and the way people act, and a lot of that starts at the top.

Shontell: Almost every big startup with cofounders that I can think of has had some sort of issue or drama around it. Which is no different for Tinder. Let's talk about that. You and Justin were cofounders. But now he's no longer part of the company.

Rad: Every company has issues at some point, because when you're starting a company or you're doing anything that then grows to a larger team, from a few people around a table to something much bigger, what becomes very important is holding everyone accountable. It's hard to hold your friends accountable.

When you're building a company together you become extremely close. These are the people you see in the morning, afternoon, at night, in the middle of the night. And you're experiencing some very harsh working hours and you're also experiencing the happiest moments of your life together, and that bonds you in a way that very few things can. And that inherently is going to blur the lines between friend, colleague, employee.

So every startup goes through this. And it's just part of the process of growing up as a company. We've had our stories, just like Twitter and Facebook and Snapchat. It is what it is. As long as you learn and grow from it.

Shontell: The elephant in the room is that Justin, your cofounder, is no longer with Tinder. Had a relationship with another employee, there was a lawsuit; lots of texts became public. As a result of some of the texts, you ended up losing your job for a little bit as CEO of Tinder -

Rad: Not as a result of the texts - it was one year later. So the two things didn't have a high degree of correlation. But yes, there were some hard times as we were growing up as a company and some relationships that were not productive. But we've moved past that and we've learned a lot.

Shontell: I think the point is that everyone talks about the happy startup stories. And you don't realize when you're going to go found the next Tinder that you might have a brutal fight with your cofounder or you might have to deal with a lawsuit someday. Or you might say the wrong thing to the press.

Rad: It's not as glamorous as people think. The first thing I always ask whenever anyone is pitching me to raise money or looking for my advice on an idea is, "Why are you doing this?"

If it's because you're chasing some glamorous life you saw in the movie, "The Social Network," the reality is much harsher. When you're building a startup, it is hard. Especially a startup that's growing at the rate of Tinder and you have to be all in and you have to be committed. Solving this problem has to be personal or else you're going to crumble.

You really have to do it for more than the clichéd reasons, which are "I want the freedom" or "I want to work for myself."

Believe me, there are moments when you want to crumble in a ball in the corner, but you find the perseverance through the passion that you have for what you're doing and the love you have for your users. So you have to do it for the right reasons. Or else, even if you have the best idea in the world - Tinder was a great idea - if we weren't passionate as a team and dedicated, we would have failed.

Shontell: What's it like as a CEO to go through that, and then stick around, to your credit?

Rad: I think some of the greatest lessons I've had came out of being fired. I learned a lot.

Shontell: How did you get fired? Did Barry Diller pull you into a conference room?

Rad: Fired is an exaggeration. I was asked to move over and be president and continue to run parts of the company. The thing was, we were growing so fast that naturally there was a lot of doubt whether or not a 28-year-old who hasn't really experienced something at this scale would have the experience and business intelligence to carry it on and make the right judgment calls.

To be honest, even I had doubts. I was terrified. Tinder was growing faster than anything and it was stressful. So we made the decision together. A lot of people think it was this adversarial thing. It was a decision we made together to bring in someone new who had a little bit more experience to help us scale the company and, as part of that, I took a different role.

I would have done things differently. I didn't really agree with the board on how we did it. And I learned two life-changing things from that process. The first thing is, when you're growing up, you think that being at the top means you have all the answers and you know what you're doing, and I felt a lot of pressure because people would come up to me asking me to make all sorts of decisions. And it's lonely at the top, because no one is guiding you. You feel a lot of pressure. That is a hard experience.

But what I learned through no longer being in that position, and not having the pressure of making every decision, was that being a leader doesn't mean you have all the answers. It means you're able to ask the right questions; you're getting the right people together who each are imperfect in their own ways. No one is perfect. But you have a common mission and a common sense of where you're going.

But this idea of this perfect being who's the CEO doesn't exist. It's far from the reality.

The second thing I learned is, I sort of reminded myself why I'm doing this. I started Tinder because I was passionate about this product. And when I was no longer CEO and I didn't have the title and I wasn't the person running the ship, what I realized was what mattered wasn't the title, wasn't the money, wasn't any of that. It was the love and joy of being able to wake up and work on something you love.

So I still got to do that, and that was a reset in my own head. It was a great reminder. And sometimes when you go through hard times it's a great reminder of why you're doing this and what's important and valuable.

You sometimes fail and experience hardship, but if you look at it as an opportunity to grow and you're listening, there are lessons and it makes people who they are. That is the one thing about perseverance in any startup or going through any experiences - don't back down from adversity. Learn from it.

Shontell: And today things sound good - 100 million downloads. I do have one question, about being part of Hatch Labs. How much do you think being part of an incubator within a company that has tons of resources (IAB) contributed to Tinder's success? And what do you think the outcome would have been like if you had just done the traditional "I'm going to raise some money from a VC and do it alone" approach?

Rad: Tinder - even though we were part of an incubator - the incubator was Tinder, because I was running the whole West Coast for it and everyone on the West Coast was working on Tinder, and I hired almost everyone that was in the West Coast Hatch Labs office at that time. So it wasn't different in that sense.

What was different is that there was an environment where it was OK to fail. Because if we failed on one idea we'd just shift to the next one, and the next one, and the next one, and we could really pursue our passions without a lot of stress. It actually doesn't matter what scale of a business you are. When you're trying to innovate, the process is the same. You have a hypothesis, test the hypothesis, learn from the success or failure, apply it to the next step, learn, apply it to the next step, learn apply it to the next step. That's true if you're building a startup, that's true if you're the size of Tinder and building the next great feature. It starts with creating an environment where it's OK to take risks and fail. As long as you're learning from it.

Shontell: Everyone wants to be you, everyone wants to figure out how to build the next big thing. What advice do you have for aspiring founders who want to build the next Tinder?

Rad: The most important thing is you're doing it for the right reasons. What that means is you have a desire to solve a problem that you empathize with in some way, shape, or form.

It could be a problem you have, it could be a problem your friends or colleagues are having, an inefficiency you're having in the world. But start from a place of actually empathizing and coming from a position of trying to solve something, rather than some dream of just working for yourself or making a lot of money or anything like that. Because companies are hard and require a lot of perseverance and determination, and you just won't survive through the highs and lows unless you're doing it for the right reasons.

The second thing I would say - because there is a disillusionment about startups - is that a lot of the young entrepreneurs I meet mistake a startup as a license to not have a direction or clear mission. And I always tell them, day one at Tinder, we had a clear mission.

Now, that mission evolved and goals evolved, and we iterated and we learned and that changed. But at any given moment, we had a plan. And great entrepreneurs are always prepared. They have a plan. And they have a great team that understands that plan and understands what the goal is at every phase of the business. So having that clarity is important. Both the clarity of why you're doing what you're doing and what you're doing.

Believe me, the number of times that very, very intelligent, brilliant young entrepreneurs can't answer those questions clearly for me, makes me feel that people need to hear that more.