Yeah, the most interesting part of this article is that, if true, it seems like Tinder was kind of a pseudo-startup, a subsidiary of an established corporation given a more media-friendly backstory by positioning it as a startup. In retrospect I'm surprised that kind of thing isn't more common. (Or maybe it is?)
This sort of thing is, in my experience, quite common, but rarely successful. Large companies are aware of the innovator's dilemma and try to form skunkworks teams to find the Next Big Thing.
But the problem is that most seem unable to assemble the right people, and give them the right autonomy, to really enable them to behave in a startup-like manner. Instead it just becomes recruitment joke where recruiters say "it's like a startup in a big company!" while the candidate rolls their eyes.
Right, though that's a different case I think. You're talking about trying to replicate some kind of innovative startup environment within a big company. My read here is a bit different, that IAC had an idea for how to enter this space, knew what they wanted to build there and even assigned employees to start building it, but needed a better media story than "Match.com launches hookup app". So instead they cooked up a hot startup led by young cofounders launching a new "dating" app— but where the startup happens to be an IAC subsidiary and implementing the IAC market strategy, which is omitted from the branding.
In a way I think it's the opposite story of skunkworks. Those try to replicate a startup-like independence while also emphasizing the parent brand's ultimate credit for any output (e.g. ZFS was developed by a Sun skunkworks and proudly claimed by Sun). Here it looks like IAC wanted exactly the opposite: a fake startup that didn't really have independence and instead just implemented IAC's strategy for this vertical, but which emphasized its own brand and kept quiet about the parent brand.
One other area I can think of where that's fairly common recently is in fake microbrews launched by the big brewing companies. The recipes and market positioning are entirely dictated by the parent company, but there's a kind of microbrewing identity that is presented to the public.
It's really common for retailers and marketers to segment the population by demographic or price. Look at Gap, which also owns the Old Navy, Banana Republic, Old Navy, Athleta, and Piperlime brands. They're selling the same basic thing--clothing--but targeting different segments in ways that let them maximize profit by pushing the right buttons.
So why wouldn't that approach work for something like online dating?
The article describes quite well how successful this approach can be if you do it right. A company like Microsoft has such a massive amount of talent and resources, that even allowing a sliver of that to work on a project in isolation and freedom can lead to huge success.
I've personally experienced a 'startup in a big company' situation, and that also seemed to work quite well at first. Sadly, the whole thing fell apart once the big company started trying to take control back. In fact, I think the resulting situation was worse than if the 'startup' had never had a taste of independence.
I remember somebody telling me this (that they weren't a "real" startup, and owned by the company behind Match), and then they came to my school to talk about their company - and spun it so seriously that I assumed the guy telling me was wrong.
Not cool for companies to lie about their history, even if a lot of them do it.
And Tinder has done this from the word go. I remember talking to Rad and a few others when they were ramping up and the first thing I said was, "oh, OK, so you're part of IAC" and they got all defensive and tried to pretend like the fact that their offices, all their capital, all their equipment and their paychecks were from IAC was irrelevant and that they were still totally indie.
From talking to IAC people, they don't care what the founder say -- to a point -- as long as people are using the app. As this article made clear however, if you get too far off the messaging and start to oversell the "independent" angle, you will be smacked back into reality.
And then thing is, it isn't cool for a lot of companies to lie about their history -- but if you don't create this false narrative (and let's be clear, 90% of the startup narratives you hear are altered to make the story more attractive. The same is true for any other aspect of business (see also: Hollywood)), people won't pay attention. To a certain extent, as a society, we wall want to have that great Cindarella story.
We want to believe Michael Jordan was cut from his high school basketball team (even though that's not really what happened [1]) and then went on to be one of the greatest players of all time, because it helps create hope within ourselves that we too can overcome the odds and be that successful.
A successful startup born out of an incubator that is funded by a multi-billion dollar company with direct reports to the incumbent in an industry it is trying to "disrupt" is far less compelling for everyone than "we had this idea for this app and it spread like wildfire and now the VCs are coming knocking at our door."
That said, as icky and gross as I find every single person in this entire Tinder saga (to be clear, I think Wolfe was absolutely a victim but that doesn't mean I'd want to hang out with her), the truly notable aspect of the company (to me at least), which was its astonishing growth, was legit. That didn't happen because of IAC or Match (at least, not directly, meaning b/c of those employees or that branding). And that's still laudable. The service might be run by total jerks, but it's growth rate is still laudable and is still an interesting narrative into itself, even if we accept that the whole rags to riches, came out of nowhere aspect, is bullshit (which it is).
