Mistakes from how Facebook was founded

Important lessons for social contracts

On June 23, 2011, Tyler Winklevoss, Cameron Winklevoss, and Divya Narendra filed a suit against Facebook. The status report was filed in the U.S. District Court for the District of Massachusetts. The filing is ConnectU Inc et al v. Facebook Inc et al, U.S. District Court, District of Massachusetts, No. 07-10593. The court’s information cab be obtained at “U.S. District Court for the District of Massachusetts”.

The Winklevoss brothers and their partner Narendra allege that Facebook founder Mark Zuckerberg withheld key information during settlement proceedings.

The current issues with Facebook stem from how it was founded. According to an article by Jochelle Mendonca, the Winklevoss twins and Zuckerberg attended Harvard University. An original settlement was intended to resolve any claim to whether Zuckerberg stole the idea for Facebook from the twins.


In the original settlement in 2008, the Winklevoss brothers were given $65 million. When the value of Facebook increased, the twins attempted to undo the settlement.


In the first settlement, the twins were happy with the settlement until Facebook’s value increased. I wonder if they would have given back money had Facebook’s value dropped. The twins should have protected their ideas by making Zuckerberg sign a waiver. Obviously Zuckerberg should have disclosed that he was starting something similar.

The lawsuits make both parties lose sympathy with the public. The twins look greedy for wanting more. Even though Zuckerberg has not sued yet, he appears to be a thief who admitted guilt by settling.

Protect Your Ideas

There are many ways in which ideas can be protected. Make sure your employees sign non-disclosure agreements. A written document is much better than a verbal committment.

If you are running a business, you should familize yourself with the law pertaining to your specific industry. Always have a backup plan in case a key employee leaves. The Winklevoss twins would not have had issues if they had a replacement for Zuckerberg.


Facebook was founded during a stressful period for the Winklevoss twins and Zuckerberg. The twins put too much faith in someone who allegedly stole their idea and became very rich. Zuckerberd left himself open to accusations and lawsuits because he did not protect himself.

The key lesson from the founding of Facebook is to protect your idea. Disclose information only when required and under appropriate circumstances. Do not out-source understanding how the law affects your business.


  1. Get all your employees to sign non-disclosure agreements if applicable.
  2. Disclose key information only when appropriate.
  3. Do your homework before you sign settlements.

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This entry was posted on Monday, June 27th, 2011 at 12:00 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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