Don’t Get “Zuckered”
What Startup Founders Should Learn from The Social Network Movie
StartupBUSINESS.COM
In the movie The Social Network, the Winklevoss twins and their partner Divya Narendra accuse Mark Zuckerberg of stealing their idea for a social network called HarvardConnection to create Facebook. Some may argue the lesson of this saga is about collaborating only with people you know and trust, or who at least share your ethics. Others will argue the lesson is about protecting your ideas and intellectual property with good non-disclosure, non-compete, and confidentiality agreements. In my view, the primary lesson of the movie for startup founders is not one of ethics or law. It is one of execution.
The founders of the HarvardConnection got Zuckered. While they were talking about their idea and waiting around for Zuckerberg to start on the project, Zuckerberg was cranking away on coding Facebook. He was also busy organizing his friends and holding their feet to the fire to get done what was necessary to launch the product. In short, he was doing what the founders of the HarvardConnection were not doing. He may not have been the catalyst, or even the visionary, but he was the leader. He was the chief strategist and planner. He learned and adapted and grew as he went. And most importantly, he was the taskmaster. He set milestones, then executed against them. He cajoled or inspired or forced those around him to deliver their parts. This leads to the secondary lesson of the movie, as so painfully learned by Zuckerberg’s friend and partner, Eduardo Saverin.
Your stake and ultimate value as a co-founder of a startup is not earned by being there at the beginning. It is not earned by friendship, sweat equity, or even monetary investment. It is continuously earned and defended by what results you achieve for the enterprise. The movie suggests that Zuckerberg screwed his co-founder out of jealously, because he had been accepted into one of Harvard’s prestigious male Final Clubs and Zuckerberg had not. In my view, Saverin fell from grace by pursuing a business model that Zuckerberg was not yet ready to embrace. They were not on the same page. Further, Saverin made a critical mistake by disassociating himself with the team when Zuckerberg moved the company to California and he chose to remain in Massachusetts. Saverin eventually showed up at Facebook headquarters in California to learn that his stake in the company had been reduced from 30% to 0.03%. This sleight of hand had been done legally by dilution terms that Saverin himself had signed as part of the company’s angel financing. He was not on top of his game as a co-founder and certainly not ready to be the company’s CFO. He was essentially replaced by Napster founder Shawn Parker, who had ingratiated himself to Zuckerberg and taken advantage of Saverin’s missteps. In short, Saverin had been Zuckered.
There is no moral to the Facebook story. There are only lessons from the harsh realities of being a founder of a startup. Those who do will win over those who conceive. Your place at the table is only assured if you help kill what everyone wants to eat. You can’t afford to be absent during the hunt or fail to dine with the team. The irony of the story is that Zuckerberg himself got Zuckered by a savvy startup founder. Parker ended up with a significant stake for a contribution that appears to have been limited to telling Zuckerberg to drop the word “The.” Therein lies a lesson that most founders know all too well. Those who end up with the biggest stakes in a company usually had little to do with its founding.
What Startup Founders Should Learn from The Social Network Movie
StartupBUSINESS.COM
In the movie The Social Network, the Winklevoss twins and their partner Divya Narendra accuse Mark Zuckerberg of stealing their idea for a social network called HarvardConnection to create Facebook. Some may argue the lesson of this saga is about collaborating only with people you know and trust, or who at least share your ethics. Others will argue the lesson is about protecting your ideas and intellectual property with good non-disclosure, non-compete, and confidentiality agreements. In my view, the primary lesson of the movie for startup founders is not one of ethics or law. It is one of execution.
The founders of the HarvardConnection got Zuckered. While they were talking about their idea and waiting around for Zuckerberg to start on the project, Zuckerberg was cranking away on coding Facebook. He was also busy organizing his friends and holding their feet to the fire to get done what was necessary to launch the product. In short, he was doing what the founders of the HarvardConnection were not doing. He may not have been the catalyst, or even the visionary, but he was the leader. He was the chief strategist and planner. He learned and adapted and grew as he went. And most importantly, he was the taskmaster. He set milestones, then executed against them. He cajoled or inspired or forced those around him to deliver their parts. This leads to the secondary lesson of the movie, as so painfully learned by Zuckerberg’s friend and partner, Eduardo Saverin.
Your stake and ultimate value as a co-founder of a startup is not earned by being there at the beginning. It is not earned by friendship, sweat equity, or even monetary investment. It is continuously earned and defended by what results you achieve for the enterprise. The movie suggests that Zuckerberg screwed his co-founder out of jealously, because he had been accepted into one of Harvard’s prestigious male Final Clubs and Zuckerberg had not. In my view, Saverin fell from grace by pursuing a business model that Zuckerberg was not yet ready to embrace. They were not on the same page. Further, Saverin made a critical mistake by disassociating himself with the team when Zuckerberg moved the company to California and he chose to remain in Massachusetts. Saverin eventually showed up at Facebook headquarters in California to learn that his stake in the company had been reduced from 30% to 0.03%. This sleight of hand had been done legally by dilution terms that Saverin himself had signed as part of the company’s angel financing. He was not on top of his game as a co-founder and certainly not ready to be the company’s CFO. He was essentially replaced by Napster founder Shawn Parker, who had ingratiated himself to Zuckerberg and taken advantage of Saverin’s missteps. In short, Saverin had been Zuckered.
There is no moral to the Facebook story. There are only lessons from the harsh realities of being a founder of a startup. Those who do will win over those who conceive. Your place at the table is only assured if you help kill what everyone wants to eat. You can’t afford to be absent during the hunt or fail to dine with the team. The irony of the story is that Zuckerberg himself got Zuckered by a savvy startup founder. Parker ended up with a significant stake for a contribution that appears to have been limited to telling Zuckerberg to drop the word “The.” Therein lies a lesson that most founders know all too well. Those who end up with the biggest stakes in a company usually had little to do with its founding.
