Intellectual Property, Ideation, and Implementation: The Review of The Social Network

Movie Title: The Social Network

Release: 2010

Director: David Fincher

Written by: Aaron Sorkin

Time: 120 minutes

Reviewer: Olutayo Irantiola

“Let me tell you the difference between Facebook and everybody else,

“We don’t crash ever! If the servers are down for even a day,

Our entire reputation is irreversibly destroyed. Users are fickle.

Friendster has proved that. Even a few people leaving would reverberate through

the entire user base. The users are interconnected. That is the whole point.

College kids are online because their friends are online”

Mark Zuckerberg

With the quote above, I thought it wise to revisit the movie, “The Social Network”. This is coming on the heels of the recent outage of the app and adjoining platforms such as Whatsapp and Instagram. Asides from this, having watched the Founder, directed John Lee Hancock. I have learnt so much about what happens in the business space as regards Intellectual Properties.

The Social Network is a movie based on the formation of Facebook. The movie opened with a night between a lady and a young man- Erica played by Rooney Mara and Mark played by Jesse Eisenberg. Her comment gave us an inkling into his person she said, “you are probably going to be a very successful computer person, but you are gonna go through life thinking that girls don’t like you because you are a nerd.” In annoyance, Mark went to blog about his girlfriend, Erica Albright, after they stopped dating. He started a website called facemash and people came in a stampede to see the pictures of hot girls.

For Mark, “you can go anywhere on the internet and see the pictures of hot girls but it was because they saw of girls that they knew. People want to go on the internet and check out their friends, so why not build a website that offers that?… I am talking about taking the entire social experience of college and putting it online.”  The surge in online traffic made IT Specialists in Harvard believe that the network would crash.

Subsequently, he was invited to the Administrative Board of Harvard for a hearing and these were the allegations leveled against him-

  1. Intentionally breaching security
  2. Violating copyrights
  3. Violating individual privacy by creating the website
  4. Violation of the University policy in the distribution of digitized images

He apologized to the women in Harvard; he believed he should be recognized for pointing out some pretty gaping holes in the system! Unfortunately, he got 6 months of academic probation.

After this experience, he met Max Minghella as Divya Narendra,  and the Winklevoss brothers- Tyler and Cameron. They bounced off him the idea of creating Harvard Connections believing he is a gifted and creative programmer. Prior to this, Mark had built an online platform where students can see the courses that their friends are taking. An app for an MP3 player that recognizes one’s taste of music which Microsoft tried to buy but he gave them for free.

For the brothers, the Unique Selling Point of Harvard Connections would be different from MySpace or Friendster and it is exclusive. He agreed to work with them. However, they were documenting their discussions via emails. They sent Mark 36 emails and he responded to 16 emails; it was in the 16th mail that he spoke to an itch in the process of writing the codes for the development of Harvard Connections.

In a world where social structure was everything; Mark wrote tens of thousands of lines of codes. He sort for money to rent servers and host it online which Andrew Garfield as Eduardo Saverin provided. Mark was comfortable working with his friend and he desired to have him as a business associate and partner, he appointed him as the Chief Financial Officer. The first revenue sharing formulae was 70-30.

This led to another panel, where Eduardo Saverin and Mark Zuckerberg were crossed-examined by Mr. Hotchkiss, the lawyer. It was assumed that Mark used the ideas of the brothers to build the facebook. The facebook was registered on January 11 2004 as a Mark Zuckerberg Productions. Mark argued that the codes he wrote for the facebook were different from that of the Winklevoss brother as he was accused of stealing the whole idea, Mark wanted them to get a forensic team to get to the bottom of this.

Some steps were taken to challenge Mark-

  1. Get an Intellectual Property lawyer to sue him! (52 emails and he used 42 days headstart)
  2. Sopranos to beat him up (physical assault)
  3. Media war: “We can at least get something going in the paper so people know that this is in dispute. Newspaper to get the conversation going since he already had a publication in The Harvard Crimson with the quote, ‘Zuckerberg said he hoped the privacy options would help restore his reputation following student outrage over’ That’s exactly what we said to him, he’s giving us the finger in the Crimson.

Thefacebook became an online directory that connects people through different social networks. All that was important was to have a address to register. On the first day that thefacebook launched 650 students signed up. Then, Mark thought of a way to enhance the organization by redistributing the shares thus- Mark, founder and CEO- 65%; Eduardo, Chief Financial Officer- 30% and 5% to Dustin Moskovitz, Vice President and Head of Programming and Chris, in charge of Publicity and Outreach will be paid according to his efforts; this was spelt out by April 13, 2004.

A twist came to the relationship of Mark and Eduardo when he met Justin Timberlake as Sean Parker, the founder of Napster and Online Rolodex but he was not successful at both. Sean’s girlfriend, Dakota Johnson as Amelia Ritter, had told him earlier that, “really awesome, except it’s freakishly addictive.” Eventually, he advised him to change the name to Facebook by removing “the”; he got an angel investor, Peter Thiel, who runs a $2 billion hedge fund called Clarium Capital and he invested $500 thousand and helped the business move out of the United States of America into other continents as against Mark’s target of 100 schools. He got himself a role on the board because he brought in more funds to the business than the CFO, Eduardo.

The Winklevoss Brothers did not give up on their quest; their anger got culminated when they lost a game and Mr. Kenwright told them that his daughter, a student of Cambridge who has friends in Oxford and London School of Economics in the United Kingdom was able to watch the game on facebook.

The brothers highlighted previous attempts to get Mark such as personal engagements; writing him letters; tried the ad board; the President of the School. At this time, they have to sue him in Federal Court. One of them said, “I want injunctive relief and get the site taken down now, every minute the site is up, Harvard connection becomes less valuable; I want an injunction. I want damages. I want punitive relief. And I want him dead.”

However, Eduardo was invited to sign 4 documents with the investors namely- Common Stock Purchase Agreement (allowing them to buy stock in the newly incorporated Facebook); the Exchange agreement (exchanging old shares for the new shared) and Voter Holding Agreement. The shares were redistributed- Eduardo- 34.4%; Mark- 51%; Dustin 6.81%; Sean- 6.47% and Peter Thiel- 7%. Later on, Eduardo, who was based in New York, was almost edged out by Sean who was with Mark in California at the office. They got another investor and sold Eduardo’s shares alone.

In order to resolve all the impasses, Mark paid restored Eduardo to the Board of Facebook and his name also on the masthead. Then, he settled out of court with the Winklevoss brothers by settling them up to the tune of $65 million.

Some quick lessons for Entrepreneurs:

  1. Avoid conflict of influence in your business ideation. Don’t agree to a business idea similar to what you have in mind. As Mark said, “they have an idea but I had a better one.” Once you commit to working on it, then you may be liable.
  2. Do not make assumptions in business, document everything with any prospective associate
  3. Sequel to this, when you are in any partnership, let everyone know their stakes.
  4. Asides, passion for any business venture, learn how to make money from it.
  5. Learn to engage professionals in your dealings, Mark got Eduardo to do all the financials and Sean knows how to get others to enlarge the business.
  6. Be ready for out of court settlements
  7. Keep evolving, I refer to Mark’s quote, “fashion is never finished”.
  8. In Crisis situation, engage other stakeholders as the Winklevoss brothers did, do take laws into your hands
  9. Give people what will make them willingly surrender their information to your business.
  10. Be decisive about what you want to be online. “The internet’s not written in pencil, it is written in ink!” Erica Albert.

It is a great movie full of didactic lessons for whoever wants to learn. The flick does not have the endorsement of the real Mark Zuckerberg, it is based largely upon a book by Ben Mezrich, “The Accidental Billionaire.”

Let me end this review with some quotes from Sean-

“The next transformative development, a picture-sharing application. A place where you view pictures that coincide with your social life. It is the true digitalization of real life;“You don’t just go to a party anymore, you go to a party with a digital camera, and then your friends relive the party online. And tagging…the idea”; “I have spent hours watching what people do when they log on. How they check their friends’ status updates; check to see which one of their friends changed their profiles, changed their pictures;” and “we lived on farms, and then we lived in the cities, and now we’re going to live on the internet”.

Enjoy the thriller-

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