Learning From Facebook

Everyone knows who Mark Zuckerberg is; the billionaire entrepreneur who started Facebook, one of the most visited sites on the internet. He is an inspiration to entrepreneurs’ world over looking to launch the ‘next big thing’, a regular Joe who started with nothing and got everything. Well, I guess that’s not completely true. He did get everything but to say he started with nothing is far from the truth. Anyone who keeps abreast with the news or saw David Fincher’s ‘The Social Network’ knows that he had more than a little help to say the least.

In late 2003 Cameron Winklevoss, Tyler Winklevoss and Divya Narendra, students of Harvard, approached Mark for fixing and adding the finishing touches to their website HarvardConnection, a social network for Harvard students. Mark was given the private server location and password of the unfinished website and codes without any formal contract. Within a week, Mark decided to create his own social networking site and pretended to be working on the HarvardConnection project while working on thefacebook.com. He willfully lead the twins on so that he could finish his own project while preventing them from getting a new programmer from finishing HarvardConnection. Eventually he launched his own website and it was days before the HarvardConnection team knew what had happened and were left with an unfinished website with a competitor already in the market.

If the Winklevoss twins and Divya had taken Traklight’s ID your IP risk quiz, history would have had a different story to tell. By taking out half an hour of their time they could’ve been making millions of dollars more than they got in their settlement. The one big mistake they made was discuss a potentially groundbreaking idea openly without having an independent contractor sign any sort of non-disclosure agreement or formal letter of employment with an anti-competition clause, a fact that would have been pointed out by Traklight’s Report.

Mark Zuckerberg was already known to copy ideas; his popular Facemash was a duplication of the ‘Hot or Not’ website. Without any formalized agreement the courts held that their conversation amounted to no more than ‘dorm room chit chat’. The unfinished coding of HarvardConnection was not considered proprietary information by the Twins and Divya and if they had protected them as trade secrets then Mark could not have used the same coding in his social networking site thefacebook.

In essence the two competing sites were different but had the same target audience and Mark’s willful delay on the HarvardConnection project could have been prevented. If he had been bound contractually, then he would not have been able to string them along as he would not have been able to work on a competing project at the same time. After stepping down from his post as web developer for the Twins, Mark would not be able to delay them any further. They would have managed to get their own developer on the project and since it was already near completion, have a head start on Mark’s thefacebook.com.
People tend to underestimate the value of a good idea and the Facebook story is a cautionary tale for all aspiring entrepreneurs. Taking out the time and effort to identify and protect your intellectual property at the beginning of an enterprise is a lot better than regretting not having done so while buying a product you created with someone else’s name on it.

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