Answer by Michael Wolfe:
I agree with most of what has been written here, but I agree that most do not address the question ("what could they have done") or else answer with "there is nothing they could have done." Not true at all.
I'll caveat that I'm commenting on the "movie version" of the story, which is all most of us know and has lots of fiction mixed in. But since this is hypothetical anyway, the movie provides a very effective case study.
There is a very specific, effective, well-understood, and doable list of things they should have done:
- Co-founded the company with one or more strong technical founders who would have had equal equity and control as the other founders.
- Shrunk the founding team and kicked out at least one or two of Cameron, Tyler, or Divya. A four-person startup with three "business guys"? Death.
- Vetted Mark better. What did they know about him? That he knew how to build a website (lots of people do)? That he was involved in some pretty questionable stunts which made him a cocky, notorious campus figure? That he was hard to communicate with and treated them with contempt? Not a guy I'd bet my company on (again, this is the movie version of Mark I'm talking about, which is largely fiction).
- Found a technical founder who was a cultural match with them. It is clear from the beginning the guys had nothing in common with Mark and didn't respect each other. They should have worked with friends or at least gone out drinking a few times together to see how they mesh. These guys were at Harvard but hadn't made any geek friends? Get out of the gym, dudes.
- All of the founders (not just Mark) should have signed NDAs and Proprietary Inventions and Agreements docs. This would not have prevented Mark from starting a competitor, but it may have slowed him down and it may have discouraging him from getting involved in the first place and wasting their time.
- Been more dedicated. The movie shows them just "phoning it in," occasionally calling Mark asking "how is our site coming along?" Can you imagine Steve Jobs calling his folks at Apple asking "how is that iPad thing coming along?" Roll up your sleeves, guys.
- Set a regular work rhythm and project management framework. At least a weekly meeting where they all sat together, shared what they are working on, demoed to each other, talked about next steps, and spend time in a room together. Mark would have been busted the very first week if they had done that.
- Acted on their instincts. They knew something was fishy with Mark, but they let him string them along for several additional weeks before his cover was blown.
This is not a story of "ideas vs. execution." This is a story of bad businessmen.
Next I'll take a stab at the other two questions addressed in this thread: "ideas vs. execution?" and "did they get what they deserve?"
I see confusion on the difference between an original idea and a great idea. An idea that is original but not great is not worth much. An idea that is not original but is great is usually the most valuable of all. Every large industry success I can think of can be described as that.
Social networking was not an original idea. But it was a freakin' great idea, and Facebook was launched in exactly the right context and with perfect strategy:
- The timing was perfect (2003).
- The angle of attack (a social network dedicated to a single school) was brilliant.
- Harvard was the perfect market to start given how connected and influential it is…other schools are more likely to adopt something started at Harvard.
- It was started within shouting distance of some brilliant people like Mark Zuckerberg, Dustin Moskovitz, Chris Hughes (again a benefit of being at Harvard).
- And the team saw many fresh approaches to the problem.
Yes, many of these insights were added by Mark and team post-Winkelvii, and many were ideas generated as a side effect of great execution, but again my point was that the right idea at the right time has huge value.
Next, on "did they get what they deserve?" I have a simple answer followed by a more nuanced answer.
The simple answer is "no way." Not in any legal sense, nor should they be rewarded for being such bad businessmen.
But in the interest of being contrary I'll defend a second answer, which is "sorta."
True, lots of people were working on social networks before 2003, but I know at least three who were not: you, me and Mark Zuckerberg.
Mark would certainly have been what the fictional Erica called "a very successful computer person" without Facebook, but what is the chance he would have found an equally huge, once-per-decade, opportunity? I argue the same for Gates, Jobs, Larry, Sergey: they are more talented than you or I, but we may have never heard of them if they weren't paired with some of the largest opportunities of their times.
The Winklevii did something that you and I did not do: they acted.
- They had conviction that opportunities still existed in social networking despite the competition.
- They did it in the right time, place, context, and had some good ideas on the right strategy.
- They started a company.
- They found Mark and got him involved.
And then, well…that is pretty much it (other than hiring lawyers). But that is more than most people ever do. It proves again that doing something, even badly, always beats sitting in your room thinking "I could have done that." The industry is full of poor executors who were successful because they picked a good idea, got going on it, and later brought in good executors.
In this case, it kicked off the chain of events that led to:
- Facebook becoming one of the largest success stories of our time. It is changing the world.
- Mark becoming Time's Man of the Year, fabulously wealthy, and being deified as some rollup of Bill Gates, Steve Jobs, and William Randolph Hearst.
- Hollywood producers and screenwriters getting to feel like they wrote a movie capturing a generation (while remaining completely clueless about that generation).
- A generation being inspired towards entrepreneurship so they can all become Mark Zuckerbergs (completely ignoring whatever cautionary tale was intended by the filmmarkers).
In return the Winklevii got a tiny piece of the company, were favorably portrayed in a hit movie, did it all without interrupting their athletics or academics, and most certainly get laid a lot.
Did they deserve all that? Probably not. But would I argue that everyone in this story ended up in roughly the right place? Yeah, I kinda would.