13: The Social Network

The Social Network tells the story behind one of the world’s most popular websites, Facebook. There’s greed, corruption, lawsuits and Justin Timberlake. But how true is the depiction of the site’s early days? Let’s find out.

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Transcript

Note: This transcript is automatically generated. There will be mistakes, so please don’t use them for quotes. It is provided for reference use to find things better in the audio.

Mark Zuckerberg was born on May 14th, 1983 in White Plains, New York to a fairly well-off family. His father ran his own dental practice and his mother was a psychiatrist. Mark was the only boy in a family of four children.

At twelve, Mark wrote his first computer program on an Atari using BASIC to develop something he nicknamed “Zucknet”. It was a messenger program that his dad used in his dental office, which was attached to the family’s home, so the receptionist could let him know when a new patient came in without having to yell across the room.

Mark later went to Phillips Exeter Academy, a prep school in New Hampshire. His love for computers never died, and in 2002 while he was at Exeter he teamed up with Adam D’Angelo, who would later go on to start the huge Q&A website Quora, to build a Winamp plug-in they called Synapse. If you’re not familiar with Winamp, it was the world’s most popular music player on Windows at the time. Synapse worked basically like Pandora does, learning what songs you want to listen to next. You can actually still find the Synapse website out there in the Internet Archives. Underneath Mark Zuckerberg’s name, the bio he no doubt gave himself says:

“Developer guy. Team leader. Graphics skillz. Webmaster flex. Anti-aliases by hand. Likes Chinese girls. Programmer god. The nerd. If you hit it and that thing feels deeper, say his name.”

I kid you not. Remember, Mark was 18 at the time. Despite this glowing bio on the site, the software was solid. AOL and Microsoft wanted to buy the software from Mark and Adam, and although there’s never been any official documentation the internet has plenty of rumors floating around that the developer duo was offered up to two million dollars for their little program. Which they turned down.

It seems neither Mark or Adam really needed the money.

Interestingly, AOL had just bought Nullsoft–the developers of Winamp–for about $80 million in 1999. They’d end up selling Nullsoft in 2014 for about $10 million. We can only wonder what would’ve happened if Mark and Adam were involved in Winamp’s development.

Mark graduated from Exeter in 2002 and went to Harvard. And that’s where The Social Network kicks off, in October of 2003. Mark, who’s played by Jesse Eisenberg, talking with Erica Albright—played by Rooney Mara. Their discussion quickly turns negative when Erica breaks up with Mark, making it clear that she’s doing it because he’s an “asshole”. After this nasty break-up, Mark returns to his dorm at Harvard where he starts building something. It’s a website named Facemash which essentially allows a user to rate girls. The key here is they were all girls from Harvard and Mark hacked into internal sites around Harvard to get the photos. It wasn’t a complicated hack, but a hack nonetheless.

There was definitely some Hollywood license here. One of the key differences, and it’s one you’ll notice throughout the entire movie, is that Mark Zuckerberg isn’t really an asshole. That’s not to say he’s never been called one–only he knows that.

Author David Kirkpatrick, who’s interviewed Mark Zuckerberg numerous times for his book The Facebook Effect: The Inside Story of the Company That Is Connecting the World, said of Mark’s portrayal in the movie:

“Jesse Eisenberg plays Zuckerberg as an angry, insecure but cocky young jerk whose creation of the service initially called Thefacebook was motivated in large part by a desire to win the attention of a former girlfriend.

In fact, Zuckerberg is one of the least angry people I’ve ever met. He is even-tempered, generally upbeat, if prone to silence, and highly self-confident.”

The part that did happen, though, is that Mark developed a site called Facemash that randomly displayed two student photos and let users vote on which was more attractive. And yes, he did so as he was blogging the experience with one of the posts saying, “I need to think of something to make to take my mind off her…”

Originally, Facemash was going to compare classmates to farm animals, asking which was more attractive. But one of his roommates suggested, instead, to only compare classmates. In the movie, when the site goes live Harvard’s network comes crashing down. This was exaggerated for the movie. In truth what happened was about four hours after the site was launched, Harvard’s network admins noticed a spike in traffic and shut off Mark’s internet access. So the network did go down–just for Mark’s dorm room. In those four hours, about 450 students hit the site and logged 22,000 votes.

Harvard ended up shutting down the entire site because they rightfully thought it was inappropriate.

Still, it was because of Facemash and another program Mark created called CourseMatch that drew the attention of Divya Narendra and Cameron and Tyler Winklevoss. All three were other Harvard students. In the movie Divya Narendra is played by Max Minghella, while the Winklevoss twins were played by Armie Hammer. Yes, Armie Hammer played both Cameron and Tyler. Well, sort of. Josh Pence played Tyler on set, but a face replacement of another Armie happened in post-production to finish the twin effect.

In the movie, there’s a scene where Divya and the Winklevoss twins offer Mark a sandwich while they lay out their idea for a site called Harvard Connection. Mark agrees to help as he stuffs the sandwich in his bag.

This happened, although we don’t know the fate of the sandwich. Just like in the movie the three Harvard students approached Mark to see if he’d be interested in working on Harvard Connection. The idea behind the site was to essentially be a dating site for Harvard’s students–more specifically, the wealthier of the students.

In the movie there’s a lot of time that passes as the Winklevoss twins and Divya keep getting postponed by Mark. The movie makes it seem like Mark is working on Facebook instead of the Harvard Connection. While a lot of this history is only known by those four people and it boils down to one person’s word against another, as best as we can tell this didn’t really happen.

Although Mark agreed to work on Harvard Connection, he soon lost interest and dropped off of the project. While the Winklevoss twins no doubt offered to pay Mark for his work on Harvard Connection, Mark wasn’t motivated by money. If he was, he would’ve sold Synapse for millions while he was still in high school.

Instead, Mark wanted to work on a project some of his friends were working on. These friends were Dustin Moskovitz, played by Joseph Mazzello, Chris Hughes, played by Patrick Mapel, and Eduardo Saverin, played by the future Spider-Man Andrew Garfield.

In the movie, it’s Andrew Garfield’s character, Eduardo Saverin, who finances the site. As the movie progresses, Eduardo’s friendship with Mark turns sour as he feels–and rightly so, according to how the movie portrays things–that Mark has cheated him out of a huge portion of stock.

Again, we’ll probably never know what actually happened since a lot of this boils down to Eduardo’s work against Mark’s word, but as best as we can tell this is fictionalized by the movie to help create bigger tensions in the film. But they did get a few facts right along the way, helping make it seem more believable.

One of the facts they got right was that Eduardo helped fund the site. But so did Mark. Eduardo did start with a $1,000 investment. Then Mark put in $1,000 of his own. As they needed more equipment, both Eduardo and Mark put in $10,000 each.

In the movie, there’s a scene where Mark is watching a hack-a-thon where it appears he’s vetting potential new employees by their abilities. Eduardo hands Mark an envelope and explains he set up a bank account.

This part happened–the bank account, at least. It was toward the end of 2003, and Eduardo set up a new bank account with $15,000 of his own money in it. Both Eduardo and Mark had access to the account. Why Eduardo? It’s most likely because Mark simply didn’t care about the money, but he knew he’d need it. And Eduardo, on the other hand, who put off the impression that he knew a lot about business. So it’s likely that Mark thought Eduardo would be able to handle the business side, leaving Mark with the technical side. We get this sort of insight from an instant messenger conversation that has since surfaced on the website BusinessInsider.com.

This conversation took place between Mark and one of his friends on January 8th, 2004:

Mark: Eduardo is paying for my servers.

Friend: A sucker born every day.

Mark: Nah, he thinks it will make money.

Friend: What do you think?

Mark: Well I don’t know business stuff. I’m content to make something cool.

On January 11th, 2004, Mark registered a domain name, thefacebook.com. Shortly after, he mentioned in an article for The Crimson Magazine, an internal Harvard magazine, that he was inspired by Facemash to take things to the next level. He knew the technology was there, and he knew Harvard wouldn’t be creating something like that anytime soon.

Together, the friends built Thefacebook, a site that let users create profiles, upload photos and interact with other users. Initially, the site was only available to Harvard students–something they verified by requiring a Harvard .edu email address.

Another aspect the movie didn’t get right was how Thefacebook got its first users. It comes sort of close with the telling of Facemash, and how a few friends told some other friends and so on. Dustin Moskovitz, one of the four who developed Facebook with Mark would later explain it:

“When Mark finished the site, he told a couple of friends…then one of them suggested putting it on the Kirkland House online mailing list, which was three hundred people. By the end of the night, we were actively watching the registration process. Within twenty-four hours, we had somewhere between twelve hundred and fifteen hundred registrants.”

While they don’t really focus on this in the movie, if you look at the design of Thefacebook, you’ll see an image of Jesse Eisenberg at the top. Did Mark Zuckerberg put his image on the site? No. But there was an image of Al Pacino, and at the bottom of the site was the text “a Mark Zuckerberg production”. You can actually still see this thanks to the Internet Archive. I’ll put a link to it in the show notes so you can see what Thefacebook looked like.

In April of 2004, Mark, Eduardo and Dustin formed The Facebook as an LLC in Florida. For a while, they ran the site out of their dorm room at Harvard.

Another character is introduced in the movie around this time when Justin Timberlake, who’s playing Napster’s founder Sean Parker, stumbles on Thefacebook on his girlfriend’s computer. This happened…although technically it wasn’t his girlfriend. It was his roommate’s girlfriend, and it’s not likely Sean was sleeping with her like Justin Timberlake’s version of Sean was in the movie.

In fact, after the movie was released, Sean Parker had a few things to say about Justin’s portrayal of him in the movie. Sean said of Justin’s role, “It’s a great performance of a character that isn’t me.”

In another interview he’d say, “You know what? I was always a little puzzled by The Social Network, because I kind of thought that Jesse Eisenberg looked more like me than Mark. I don’t think I look anything like Timberlake, but it’s not so bad being played by a sex symbol.”

And let’s face it, there’s not a lot of sexiness in the founding of Facebook. So Hollywood likes to throw some in there periodically.

The core plotline to the movie remains the same, Sean Parker did find Thefacebook on the computer of his roommate’s girlfriend, who was a student at Stanford. By this time, Thefacebook had expanded to be available to more than just Harvard.

Sean reached out to Mark, but it was Eduardo who received the email. This tells us they likely had a shared email account, as well as bank account. In the movie, Sean takes Mark and Eduardo out to dinner at a very nice restaurant. It’s here that Justin Timberlake delivers one of the most famous lines from the movie as he says a million dollars isn’t cool…but a billion is.

We don’t know if that actual line is true, but the scene is. Sean was well-known for being the guy–or kid–behind the music sharing service Napster. So even though Napster didn’t make it, thanks to being illegal and all, but he’d already been doing his fair share of raising money for his internet startup. So when Mark and Eduardo agreed to meet, Sean took them out to a high-end restaurant in New York called 66. While it wasn’t mentioned in the movie, Sean didn’t have much money, so this meeting ended up breaking the bank for him.

In the movie, you’ll see there’s a girl sitting between Jesse Eisenberg and Andrew Garfield. In the movie, that’s Eduardo’s girlfriend Christy Lee, played by Brenda Song. In real life the girl who went to the meeting with Mark, Eduardo and Sean at 66 was Priscilla Chan. That was Mark Zuckerberg’s girlfriend at the time. She and Mark would marry in 2012.

Sean bolstered his relationship with Mark when he set up an interview with one of Sean’s friends, Reid Hoffman, the founder of LinkedIn. Reid ended up not investing on the grounds that the social network idea was too close to LinkedIn’s, but instead offered to set up a meeting with Peter Theil, the co-founder of PayPal.

Then, in June of 2004, Thefacebook got a $500,000 investment from Peter Theil. For his investment, Peter received 10.2% of Facebook. Today 10.2% of Facebook is worth about $5.4 billion. This investment meant Mark could move out of their dorm room at Harvard. So Mark decided to move to a house they rented in Silicon Valley, out in Palo Alto, California.

The investment also meant Thefacebook was leaving Harvard. Still positive that Mark stole the idea from them, the Winklevoss twins sued. It was a lawsuit that’d go on for years.

While Mark and Dustin headed west with Thefacebook.com, Eduardo went to New York to intern at the Lehman Brothers. That part of the movie was true.

But the three kept in touch through instant messenger. Mark asked Eduardo to start setting up the company, getting funding and build out a business model for Thefacebook. This would be the beginning of end for Mark and Eduardo’s friendly relationship. Another IM exchange, this time between Mark and Eduardo, shows how life for Eduardo must’ve been quite different on the east coast than Mark’s in Silicon Valley:

Eduardo: So you guys go out a lot to partiens [sic] and such there?

Mark: But in general we don’t do fun things. But that’s OK because the business is fun.

Eduardo: Lol yeah it is. No fun things though?

Mark: Eh, enough.

No doubt he was working hard, but it’s worth mentioning that it’s not like Mark was locked away in his rented house working on Thefacebook all the time.

The Social Network shows that Sean Parker, played by Justin Timberlake in the movie, meets up with Mark shortly after he moves out to Palo Alto. This happened, but not in the same way it does in the movie with Sean showing up at Mark’s door. In reality, Mark and Sean happened to run into each other in Palo Alto. They didn’t expect to meet. But when they did, Mark invited Sean to move into their house with them to help with Thefacebook. When he did, Sean officially became the first president of the company.

There’s a scene in the movie where Sean and Mark are at a night club, and Justin Timberlake’s version of Sean Parker suggests Mark make business cards that say, “I’m CEO, bitch”. It seems farfetched, but this actually happened. Well, we don’t know if it was at Sean’s suggestion, but Mark Zuckerberg did have two cards: one simply said “CEO” and the other said, “I’m CEO…bitch”

But then again, this is the same Mark Zuckerberg who was a self-proclaimed “programmer god” back in his Synapse days.

Things continued to sour between Mark and Eduardo, and in the movie this souring appears to occur when Eduardo feels he is being squeezed out of the company unfairly by Mark. This, too, is an exaggeration in the movie.

In truth, the relationship between Mark and Eduardo really started to sour when Mark found out Eduardo wasn’t spending his time on the east coast building funding for their company. The relationship was on thin ice, but that ice would break soon after.

Eduardo wasn’t only avoiding what Mark considered the bare minimum commitment to their company, but he was developing a site of his own called Joboozle.com, which was a site that allowed students to network with other students as well as companies. This site, which Eduardo built with five of his friends in New York, launched on February 4th, 2005.

Eduardo went one step further. He launched ads without Mark’s permission on Thefacebook pointing to his new site. This email from Mark Zuckerberg to Eduardo shows how it was Mark who felt he was being betrayed:

“You developed Joboozle knowing that at some point Facebook would probably want to do something with jobs. This was pretty surprising to us, because you basically made something on the side that will end up competing with Facebook and that’s pretty bad by itself. But putting ads up on Facebook to advertise it, especially for free, is just mean.”

We don’t know how Eduardo replied to that email, but we do know he did what he is portrayed as doing in the movie: freezing the shared bank account with Mark.

Without financing, Mark has to turn to his family and they put in some loans to keep Thefacebook afloat. In the meantime, this was the last straw for Mark and he was determined to get rid of Eduardo. In an instant message to the third official co-founder of the company, Dustin Moskovitz, Mark said of the Brazilian Eduardo:

“I maintain that he fucked himself…He was supposed to set up the company, get funding, and make a business model. He failed at all three…Now that I’m not going back to Harvard I don’t need to worry about getting beaten by Brazilian thugs.”

In the movie, this is where all of the legal battles began. And in truth, there certainly were legal battles for ownership of the company. For his part, Eduardo didn’t even realize what was happening until it was too late. It seems he was focused on his new website, Joboozle, and wasn’t paying attention to Thefacebook. History tells us he was focusing on the wrong site there.

Wanting to distance himself from Eduardo, Mark turned to Sean to help with the business side of things. And he had a suggestion. Again, going back to instant message records we’re able to get a peek into some of the ideas they bounced around.

Sean: Peter [Thiel] tried some dirty tricks. All that shit he does is like classic Moritz shit.

Mark: Haha really?

Sean: Only Moritz does it way better.

Mark: That’s weak.

Sean: I bet he learned that from Mike.

Mark: Well, now I learned it from him and I’ll do it to Eduardo.

So what “dirty tricks” was Mark going to pull? Well, a later IM exchange between Mark and an unknown friend gives us even more insight:

Friend: How are you going to get around Eduardo?

Mark: I’m going to buy the LLC

Mark: And then give him less shares in the company that bought it

Friend: I’m not sure it’s worth a potential lawsuit just to redistribute shares. You have nothing to gain.

Mark: No I do because until I do this I need to run everything by Eduardo. After this I have control

That, and history, tells us what happened. Essentially, the company Mark and Eduardo were tied to was a Florida LLC. Mark created a new company in Delaware and then that company would buy the Florida LLC, redistributing the new shares to everyone but Eduardo.

Another email from Mark surfaced that gives us even further insight into what was happening:

“Eduardo is refusing to co-operate at all…We basically now need to sign over our intellectual property to a new company and just take the lawsuit…I’m just going to cut him out and then settle with him. And he’ll get something I’m sure, but he deserves something…He has to sign stuff for investments and he’s lagging and I can’t take the lag.”

In March of 2005, Viacom offered Mark $75 million dollars for Thefacebook. Like he did with the millions he was offered for his Synapse Winamp plug-in, he turned it down.

A month later, in April, Eduardo finally realized what was going on with Thefacebook when he, along with all other investors, was sent a letter out of formality asking for a second round of funding. Two weeks later, Eduardo’s response came in the form of a letter from his lawyers.

One day later, Mark officially fired Eduardo.

We’ll never really know how much Eduardo knew of what was going on. No doubt he’d signed paperwork here and there throughout his time with Thefacebook, and in that paperwork was there something that signed away his rights? We’ll never know. But we do know the next part of the story was fought in the courtroom.

In the movie, Mark is faced with two lawsuits at the same time. The original lawsuit from the Winklevoss twins and now one from his former partner Eduardo Saverin. And in truth, Mark was pulled into multiple legal battles as the company was growing.

On September 20th, 2005, Thefacebook officially changed to Facebook.com when they bought the domain from a Canadian charity for people with facial disfiguration, AboutFace. The domain was purchased for $200,000.

The movie focuses on a party thrown in honor of Facebook hitting it’s one millionth member. At the party, Sean Parker is caught with drugs. The movie implies Mark was the one who called the cops on Sean in an attempt to get him kicked out of the company. This didn’t really happen the way the movie makes it seem. Mark wasn’t out to get Sean kicked out.

But Sean did get arrested at a party in 2005, and the police did find cocaine there. Even though Sean was never charged, it was enough to make Facebook’s investors cringe. They didn’t want to be associated with Sean anymore, so he was forced out of the company. But even after leaving Facebook, Mark and Sean remained friends with Sean resorting back to his unofficial advisor role. In fact, Mark would later say that, “Sean was pivotal in helping Facebook transform from a college project into a real company.” It was Sean Parker who suggested cleaning up the interface and adding in photo-sharing functionality.

The movie ends with one of Mark’s lawyers, who’s played by Rashida Jones, letting Mark know they’re going to settle the case with Eduardo. The final scene in the movie wraps up the story in a nice circle as Mark is sitting alone in a dark office, sending a friend request to Erica Albright. If you don’t remember Erica, she’s was Rooney Mara’s character, the girl who broke up with Mark in the first scene.

And again, the movie fictionalized the story to wrap things up nicely while throwing in just enough truth to make it seem real. In truth, Mark was dating Priscilla Chan and didn’t try to get back together with Erica.

But Erica Albright is a real person. In fact, as of recording this the latest post on her website at ericaalbright.com is from 2011, when she asks if she’ll always be known as Mark Zuckerberg’s girlfriend. She claims she still talks to Mark on occasion and has met Mark’s now-wife, Priscilla. Erica’s site says: “The movie The Social Network really depicts me as being a b*tch. Yeah, I know that Mark wrote that in in public HTML code which is now totally public, but I’m not really a b*tch! Do you want to know the REAL story about me, the EX Girlfriend of Mark Zuckerberg? Even though it is really cool that someone played ME in a movie, I am completely the opposite of how I am depicted in the movie.”

Mark did, however, settle with Eduardo. And he actually settled the other lawsuit with the Winklevoss twins, too. While a lot of the documentation for the lawsuits was public, because the suits ended in private settlements, we don’t really know a lot of what happened.

In 2007, a Massachusetts judge, called the allegations by the Winklevoss twins “tissue thin.” Judge Douglas P. Woodlock wrote: “Dorm room chit-chat does not make a contract.” A year later, Facebook tried to get the case dismissed but failed. Then, a settlement was agreed upon.

In 2009, it was leaked that Mark’s settlement with the Winklevoss twins was for $65 million dollars. Money that the twins, who were actually Olympic rowers as the movie mentions, ended up investing a portion into SumZero. SumZero claims to be “the world’s largest community exclusively for professional investors” and is led by the twins’ good friend in the movie, Divya Narendra.

As for the other settlement, Mark Zuckerberg and Eduardo Saverin finally agreed on a 5% ownership stake in Facebook. Eduardo doesn’t have any control in the company, but considering he had put in less than $50,000 early on, his investment earned plenty back. Five percent of Facebook today is worth $2.7 billion.

And the rest, as they say, is history.

After the events depicted in the movie, Facebook would continue to grow. In 2006, Yahoo! offered to buy Facebook for $1 billion. It was rejected. Then Microsoft finally got to own a part of a Mark Zuckerberg-owned project. Although he had turned down their offer to buy Synapse so many years before, in 2007 Microsoft bought a 1.4% stake in Facebook. In 2008, Facebook hit one hundred million active users. Then they overtook MySpace in 2009 to become the world’s largest social network. Facebook continued to grow as it added games such as FarmVille and Mafia Wars in 2010.

At the end of 2010, of course, The Social Network came out. A year after the movie was released, perhaps somewhat ironically, a group of investors that included Justin Timberlake would end up buying Facebook’s major competitor, MySpace. Did playing in the movie about Facebook convince Justin to get in on the social networking action? We’ll likely never know.

On February 1st, 2012, Facebook officially went public. Today, the company that started off in Room H33 of Harvard University’s Kirkland House is valued at over $50 billion.

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