December 29, 2009

The Accidental Billionaires: By Ben Mezrich

The Accidental Billionaires: The Founding of Facebook, a Tale of Sex, Money, Genius, and Betrayal By Ben Mezrich

[It is an interesting one, but it is not a nice story to read the undercurrents of Facebook - from beginning to the current state: Greediness still rules; Secondly it is interesting to know that Mark is from my local area].

Eduardo Saverin is the 'connector' who is a people's person in social circle and good with girls, Mark Zuckerberg is the 'sensor' who lacks social skills, but brilliant programming coder.

Mark and one of his buddy had created a software program called Synapse - a plug-in for MP3 players that allowed the players to 'learn' a user's preference and create tailored play-lists based on the information. Based on the software success, big companies started to call him with job offers. Rumor was, Microsoft had offered Mark between one and two million dollars to work for them - and amazingly Mark had turned them down.

In Harvard, Mark and Eduardo were close buddies during their undergraduate days. Eduardo was famous in Harvard campus due to his 'personal hedge fund' that created around $350K profit by investing in oil related industry. Mark became famous by creating the site from his laptop which put faces of girls next to animals and have people vote on which is more attractive. In order to make it working, Mark downloaded - illegally by hacking -, Facebooks from each of the houses in Harvard campus (Kirkland, Eliot, Lowell, Adams, Quincy, Dunster, Leverett, and Mather houses). It was an instant hit, but since he downloaded it by hacking it, he faced punishment/probation from Harvard.

However that short lived website which was hosted from his laptop got him famous in the Harvard circle. Three of his seniors - Winklevoss twin brothers(Tyler, Cameron) & Divya Narendra - were trying to create a website for social networking for Harvard students (Harvard Connect) so that guys can have faster access to girls in the other houses. They approached Mark who liked their idea and Mark started to work on the website creation for realizing their idea to practice.

The idea behind Harvard Connect is creating an online meetign place where Harvard guys and girls could find each other, share information, connect. That the site would have 2 sections - one for dating and the other for connecting. Students would be able to post pictures of themselves, put in some persoanl nfo, and try to find links with one another. In short, Harvard Connect, could bring people together based on their personalities rather than on their proximity.

While working on creating the website for Harvard Connect, Mark decided to deviate from this concept and make an online for everyone in the world where friends can add pictures, profiles and visit their friends profile...

In order to start in a decent way, Eduardo decided to spend some bucks from his fund which acquired by betting on oil market. The initial name was '' and it was quite interesting and got a decent coverage in new york times. This made those three seniors pissed as this was their idea which they shared it with Mark. However there was no contract signed or documented, except few emails and verbal meetings between all of these three seniors and Mark. However, they brought this issue to Harvard President MR. Summers who did not provide verdict from Harvard point of view as an Ethical issue and asked them to handle it face-to-face or seek legal advise. They took the legal option as Mark did not provide any help in responding to their emails or invitations and recently it got settled for $65 million (

Since Eduardo paid for the first financing, Mark setup a partnership where Mark gets 70% of the ownership and Eduardo gets 30%. Mark would handle all computer side of the business and Eduardo will do the business side including finance.

When the site - thefacebook.coom - became famous day-by-day, new player got-in to the decision making. New Financier Peter Thiel injected huge sum into via Sean Parker who became close friend with Mark. As per Sean's suggestion, the new company has new name - from to - and Mark will have 50% of shares, Peter will have 6.5%, Sean with 6.5% and Eduardo with 35%. However Eduardo's shares, he cannot sell for a long long time which Eduardo realized very late that only he would not be able to sell his shares while others could. Sean took care of business deals (getting new VCs, investors) and finally made Eduardo's shares worthless and ousted him from facebook management team.

In a bizarre situation, Sean happened to be in a party which went wild and an accident happened. The police case involved Sean to the accident for being there at wrong time at a wrong party. In order to save facebook's image, Mark kicked Sean out from Facebook management team.

Eduardo filed a lawsuit against Mark and Facebook and that brought by Mark against Eduardo, have remained shrouded in secrecy; however in Jan of 2009, Eduardo's name and title as 'cofounder' were abruptly reinstated into the Facebook manifest, his very existence reinstalled into the company's corp. history.

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