Ideas worth nothing…
In November 2003, as a student at Harvard University, Zuckerberg was approached by three fellow students (Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra) to build Harvard Connection, a website that later became ConnectU, a new idea of a set of interlinked social networks for people at a single college. Zuckerberg did some work for them, but then launched his own website — what’s now known as Facebook. It is true (as it is shown in the movie) that Mark Zuckerberg didn’t come up with the idea, but it is also true that the Winklevoss brothers didn’t have the experience, knowledge and capabilities of building this site on their own… well… the truth is that IDEAS WORTH NOTHING, all that matters is execution and Mark Zuckerberg was exactly capable of doing what the Winklevoss never did. I’m not talking only about the technical part, which obviously was Mark Zuckerberg strength, he was also capable of distribute and sell the idea to other colleges and universities and he also managed to reach investors and create new ideas to build something bigger and stronger that the Winklevoss ever did.Connections is all that matters…
When Mark Zuckerberg and his partner Eduardo Saverin reached to the point that they needed funding and revenues, they tried to reach out investors (in New York mainly), but it was an effort that never capitalized. Suddenly Sean Parker (the bad boy entrepreneur and funder of Napster) appears on scene with some of the top level connections in venture capital firms in California. The mediation of Sean Parker ultimately pays off, and Facebook received an initial injection of $500.000 from Peter Thiel, that was only the beginning of a steady and massive subsequent investments from all kind of companies including $240 Millions from Microsoft. Unfortunately Eduardo Saverin at that moment didn’t have the popularity and level of connections that Sean Parker did and ultimately this was the main reason he was kicked out of the company. Why Eduardo Saverin, a smart student at Harvard with a killing product and already 25.000 loyal users never was able to raise capital or sell advertising for Facebook?… one simple answer… he didn’t have the connections.
Never sign a document without reading it….
Initially Eduardo Saverin had 30% of the company that he lost just for signing documents without reading them or at least the supervision of a personal lawyer… something you shouldn’t do either no matter how much you love and trust your partner. If you make the numbers, Microsoft paid $240 million dollars for less that 2% stake of the company, that would have made Eduardo Saverin multi-billionare with about $3,6 Billion, and this is right now when Facebook is not even a public company yet. Why he was so easily kicked out of the company when he was actually the founder and the one who incorporated it along with Mark Zuckerberg? One simple answer, he trusted the documents he was signing when they first got invested without realizing that on that document was mentioned that his shares could be diluted to any level if future investments arise; when Facebook had subsequent investments Eduardo Saverin’s shares were diluted to less than 10% and probably less. (The Social Network Movie mentioned 0.3%)
Keep these simple ideas in mind and you will be fine in life… or at least you won’t lose millions on the way…
This article has been written by Libardo Lambrano, founder of Syndikomm; an online marketing firm based in New York city and specialized in multicultural markets. Libardo Lambrano, a digital citizen of the world can be reached@llambrano