Founder Flair: Mark Zuckerberg

Table of Contents

• Facemash

• Winklevoss Twins

• Co-Founders

• The Facebook

• Sean Parker

• Lawsuits & Disputes

• Acquisitions

• Meta

• Legacy

• Deep Dive

Facemash

On a late night in October 2003, Mark Zuckerberg, a psychology and computer science major from Kirkland House at Harvard, created a website called Facemash while intoxicated. He hacked into the databases of various Harvard residences to obtain pictures of students. He then created a website, placed the pictures on it, and enabled people to vote on who was more attractive. The site was an instant hit, garnering approximately 22,000 views within the few days it was up. Zuckerberg was ultimately caught and faced disciplinary action. He believed his actions would lead to expulsion; however, this was not the case. He was placed on academic probation and allowed to continue his studies at Harvard.

Winklevoss Twins

Tyler and Cameron Winklevoss, along with their business partner Divya Narendra, were looking for someone proficient in coding to help develop a special network site they were envisioning: HarvardConnection. The trio approached Zuckerberg because he had gained a reputation at Harvard for his programming skills, particularly due to his previous work on projects such as CourseMatch and Facemash. Believing they had found the programmer they needed, they enlisted Zuckerberg to help create their social network.

Co-Founders

While Zuckerberg initially agreed to work with the Winklevoss twins and their team, the nature and extent of his commitment became subjects of legal dispute. Shortly after meeting with the Winklevoss twins and Narendra in November 2003, Zuckerberg conceived the idea for what would become Facebook. He enlisted the help of his friend Eduardo Saverin, wanting Saverin to handle the business aspects of the company. Saverin agreed, and Zuckerberg began developing the site, which would be called "The Facebook." The idea for The Facebook may have partially originated from Zuckerberg’s time at Phillips Exeter Academy, where he encountered a printed student directory called "The Photo Address Book" which students called "The Facebook," it included students' photos and basic information. This concept of a connected student directory influenced his later development of Facebook at Harvard University.

The Facebook

On February 4, 2004, Zuckerberg launched The Facebook. It spread like wildfire at Harvard, with a huge number of people signing up almost immediately. During and after the launch, Zuckerberg enlisted the help of his roommates, Chris Hughes and Dustin Moskovitz, who were programmers, along with Andrew McCollum. Zuckerberg wanted to expand Facebook beyond Harvard to other universities and needed a founding team. These five served as the founding team of Facebook.

The Winklevoss twins and Narendra rebranded HarvardConnection as ConnectU and released it shortly after Facebook was launched.

Sean Parker

Sean Parker first saw The Facebook a few months after Zuckerberg had launched it. He was impressed by the site and saw its potential. At the time, Parker was a prominent figure in the tech world, having started two well-known companies: Napster and Plaxo. Founded in 1999, Napster was a pioneering peer-to-peer file-sharing service that allowed users to share and download music files. In 2002, Parker started Plaxo, an online address book and social networking service that integrated with email clients to help users manage their contacts. The legal battles and controversy surrounding the disruption of the traditional music industry made Parker a well-known but contentious figure. While Plaxo was less controversial than Napster, Parker’s departure from the company was marked by internal disputes and power struggles, adding to his reputation as a maverick in the tech industry.

Seeing the potential of The Facebook, Sean Parker reached out to Zuckerberg and arranged a meeting with him and Eduardo Saverin in New York. During this meeting, Parker shared his vision for the company and offered his advice and assistance. Parker’s insights and experience impressed Zuckerberg, and he began to take on an advisory role. Parker’s involvement quickly grew, and he became a significant figure in Facebook’s early development, eventually becoming the company’s first president and helping to secure crucial early funding from Peter Thiel.

Despite his reputation, Parker's expertise and vision for social networking were undeniable. His controversial past did not deter Zuckerberg, who recognized the value Parker could bring to Facebook in terms of strategic guidance and connections in the tech industry. Parker's influential background, though controversial, ultimately helped shape his role as a key figure in Facebook's early development.

Lawsuits & Disputes

Winklevoss Twins & Narendra Lawsuit

The Winklevoss twins and Divya Narendra filed a lawsuit against Zuckerberg shortly after the release of The Facebook in 2004, alleging that he had stolen their idea, used source code originally meant for ConnectU, and breached their oral agreement. The legal battle resulted in a settlement in 2008, where Facebook paid $20 million in cash and 1.25 million shares of stock (approximately worth $45 million) to the plaintiffs, totaling $65 million.

The plaintiffs later contested the settlement, claiming they were misled about the value of the Facebook stock. They sought to reopen the case, but the court upheld the original settlement agreement. At the time of the settlement in 2008, the total value was estimated to be $65 million, based on the estimated worth of Facebook stock at that time. When Facebook went public in 2012, the value of the shares increased significantly, making the stock portion of the settlement much more valuable over time.

 Eduardo Saverin

As Facebook expanded, tensions arose between Saverin and Zuckerberg over the company's direction and management. Saverin was in New York working on securing advertising deals, while Zuckerberg and the rest of the team were in Palo Alto focusing on development and growth.

In 2005, Saverin's role and influence in Facebook diminished. Zuckerberg and other executives took steps to reduce Saverin's shares in the company by issuing new shares that significantly diluted his ownership percentage. Saverin was eventually removed from the company, and his stake was reduced from around 30% to less than 10%.

In response to his ouster and the dilution of his shares, Saverin filed a lawsuit against Zuckerberg and Facebook, alleging that he was unfairly pushed out and that his equity was wrongfully diluted. Facebook filed a counter-lawsuit against Saverin, accusing him of interfering with business and breaching fiduciary duty.

The legal battle between Saverin and Facebook was eventually settled out of court. The terms of the settlement were not fully disclosed, but it is known that Saverin retained his title as co-founder and received an undisclosed amount of cash and shares. His shares were restored to a certain extent, maintaining a significant stake in the company. When Facebook went public in 2012, Saverin's retained shares made him a billionaire, benefiting enormously from Facebook's success despite the acrimonious split.

Sean Parker

In August 2005, Sean Parker was arrested on suspicion of cocaine possession at a party in North Carolina. Although no charges were filed, the incident drew negative attention and concerned Facebook’s investors and board members. Parker’s arrest intensified existing concerns about his lifestyle and behavior, leading investors and board members to question his suitability as a public face for the company. Under pressure from the board and investors, Parker resigned from his position as president later that year. His departure was framed as a mutual decision to minimize damage to Facebook’s reputation and ensure its continued growth.

Acquisitions

Facebook (now Meta Platforms, Inc.) has made a number of acquisitions over the years, helping to expand its services, diversify its offerings, and eliminate competition. The most notable acquisitions have been Instagram in 2012, WhatsApp in 2014, and Oculus VR in 2014.

Instagram

Instagram is a popular photo and video-sharing social network, originally developed by Kevin Systrom and Mike Krieger. Facebook acquired Instagram to expand its mobile footprint and enhance its photo-sharing capabilities. The acquisition, which cost $1 billion, has proven to be highly successful, with Instagram becoming one of the most popular social media platforms globally.

WhatsApp

WhatsApp is a cross-platform messaging application with a vast user base, originally developed by Jan Koum and Brian Acton. Acquiring WhatsApp allowed Facebook to strengthen its position in the messaging market, particularly in regions where WhatsApp was more popular than Facebook Messenger. WhatsApp was purchased for $19 billion.

Oculus VR

Oculus VR is a virtual reality technology company, originally founded by Palmer Luckey. This acquisition marked Facebook’s entry into the VR space, aligning with its long-term vision of creating immersive social experiences. Oculus has been pivotal in developing the company’s virtual reality hardware and software. Oculus VR was purchased for $2 billion.

Other acquisitions include Parse, LiveRail, Beluga, and others.

Meta

Facebook rebranded to Meta Platforms, Inc. on October 28, 2021, to reflect its broader ambitions and focus on developing the metaverse—an immersive virtual space combining augmented and virtual reality where people can interact, work, and play. The change also aimed to consolidate its diverse range of services under a single corporate identity.

Legacy

Mark Zuckerberg has been the CEO of Facebook since he founded the company in 2004 at the age of 19. He has guided the company through both good times and bad. Fondly known as "The Zuck" by many, he has inspired a whole generation of entrepreneurs and risk-takers. His story of starting a tech giant from his humble dorm room in Kirkland House at Harvard is a testament to the idea that you can never dream too big—anything is attainable with hard work, a good team, and a bit of luck.

Deep Dive

Movies

The Social Network (2010)

Directed by David Fincher and written by Aaron Sorkin, this film stars Jesse Eisenberg as Mark Zuckerberg. It dramatizes the founding of Facebook and the ensuing legal battles, based on the book "The Accidental Billionaires" by Ben Mezrich.

Books

The Accidental Billionaires: The Founding of Facebook: A Tale of Sex, Money, Genius and Betrayal by Ben Mezrich.

This book offers a dramatic retelling of the founding of Facebook, focusing on the conflicts and controversies surrounding its early days.

The Facebook Effect: The Inside Story of the Company That Is Connecting the World by David Kirkpatrick.

This book provides an in-depth look at the history of Facebook, including insights into Mark Zuckerberg's role in its creation and growth.

Quotes

"Move fast and break things. Unless you are breaking stuff, you are not moving fast enough."

"The biggest risk is not taking any risk. In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks."

“Building a mission and building a business go hand-in-hand."

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Founder Flair: Mark Zuckerberg From a Harvard dorm room to leading a global social media revolution, Mark Zuckerberg's journey is a testam... See more

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