Will Facebook ever be rid of the Winklevoss twins?
venturebeat.com
venturebeat.com
Do they really think they could have made more money if Mark hadn't walked out on them and run built it all himself? You have $150 million dollars now, could you have made a billion dollar business? The idea behind Facebook was not all that unique. Certainly it was bad that he walked out on them and stole it, but would they have built a $50 billion company?
Just based on how they have acted since getting the settlement, I think not. You have $150 million now, that is enough money to fund 15 new ventures without ever going to a VC.
If these guys thought they could make more money than Zuckerburg without him, then DO IT. You can try 15 times before you are broke. That is a luxury almost none of the rest of us have.
Instead by constantly going back to the golden goose and trying to get money they are proving their inability to build a business. Facebook was a lottery win for them and they have no ability to do better. They are probably better off today with Mark having walked out on them ,than if they all stayed in it together and it failed and they owned a larger percent of 0.
That said (and again within my very limited knowledge of all this), I think that a $60+ million settlement is an incredibly good outcome for the winklevosses. I think that if they had found a different programmer, they would have produced yet another social networking site that went nowhere. Selling it for a tenth of their facebook settlement would have been an extraordinary outcome.
Why? Because startups run by non-programming business guys who hire a string of programmers who eventually quit and leave almost never succeed on facebook's level. Business guys like the winks greatly exaggerate the value of "an idea" and greatly underestimate way an idea can evolve into a new idea through implementation. They are almost always left in the dust.
Let me put it this way - if I went to a brilliant programmer with an "idea" - even one I had done quite a bit of implementation on, and he turned it into a multi-billion dollar company and offered me $60 million, I'd consider that a really good deal. Of course, that's not how this went down - the winks feel screwed because as far as I understand it, they kind of were. I'm basing this on the movie, so what can I say, no idea if this is true, but if I went to a programmer and he said, "yeah, I'm working on your site, I'll get back to you" over and over for a month, and at the end of the month he had launched a site that directly competes with the idea I thought he was working on for me, and then he told me bluntly and perhaps arrogantly that my idea was stupid and his was much better, and then used his advantage to beat me to every market, I'd be furious. I might be so furious that I'd be blinded to the truth, which is that I wouldn't have succeeded anyway.
I think the outcomes for the winks were
1) screwed and paid 60 mil 2) not screwed and paid probably nothing, maybe a small buyout nowhere near 60 mil.
Sigh. You know the movie isn't accurate. It's good story, it's not reality. Why would you make any comment on the motives of the players or the justice of the case using the movie as your primary source? The movie is basically historical fiction that happens to be set in the present day.
I knew that when the movie came out everyone would begin assuming that it was the true story of Facebook (despite protestations like "I have no idea if it's true"), but I'm literally seeing it in action here and it makes me sad.
You don't get to start from the movie as a "good guess" as to what happens. You don't get to use the movie as evidence at all.
That said, when someone (like me) makes a false statement based on the movie, you should refute the statement itself. For instance, did Zuckerberg agree to work on the site, and give the winklevosses the runaround for a month?
this is just another way of saying - I do appreciate your comment, and it's reminded me of the danger of thinking I'm always in control of my own ability to consciously separate fiction from reality... "seeing it", in spite of intellectual awareness that it's "just a story", has a powerful effect on the mind.
In my mind, these twins will never be the reason why Facebook was successful, no matter what some court decides. The value of a new website is not the idea behind it, it is the hard work of adding some kind of value and the tough task of getting people to use it. The idea that Connect U could be a "website that connects college friends" is not what made Facebook successful; it was the hard work of Zuckerberg and those around him.
I hope the twins are granted their chance to appeal and lose everything. I also hope they're never mentioned by any news story again.
In fact, a feature they created called Social Butterfly to allow facebook users to export their data caused facebook to sue them. And it resulted in facebook storing e-mail addresses as images for many years to prevent anyone from easily switching services.
It's all well and good to say that we'll never know what ConnectU might have been. But we do know that the principle person expected to build a big piece of it went on to execute on that idea almost perfectly.
Are they entitled to anything? None of us really know for sure since we only have small pieces of hearsay. The courts will decide.
I take that $20 mil in cash and $150 mil in stock, and if it's really not about the money like they say, I use it to be an angel investor or start other companies. This whole thing is getting tiresome.
not sure why you're being up-voted -- is there something i'm missing?
I still stand behind the other point though - the assumption behind their lawsuit is that they would have been able to do what Zuckerberg did - which is pure speculation. I'm of the opinion that their legal troubles and outcome end up making them substantially more than their idea would have anyway. So walk away with a boat load of money, lesson learned, and get your name behind some positive press instead of negative.
Yes, on the legal front, this is likely to end sooner rather than later at this point, as the appeal by the twins from the lower court judgment ordering that the settlement be enforced has not been well received by the panel hearing the appeal (see link, with my associated comment, from a couple of days ago to a story analyzing the judges' comments during the oral argument: http://news.ycombinator.com/item?id=2096370).
I will restate here from my prior comment what the stakes are on this appeal:
"In my view, the last major legal cloud that hangs over Facebook is the appeal by ConnectU and the Winklevoss brothers of a federal court decision upholding a settlement between them and FB of their claims that Mr. Zuckerberg had allegedly stolen their ideas to form the company. With that settlement in place, those parties received what many considered a windfall ($20M cash and 1.2 shares of FB stock, originally valued at $45M and now estimated to be worth $150M). Should it be set aside, however, the settlement value of such claims today would be astronomical. Why? Because these claims (unlike those of Mr. Ceglia, who filed a claim nearly seven years after the fact claiming an "84% stake in Facebook") were timely brought and have overhung every round of financing that FB has done from the beginning. In other words, existing FB shareholders have at all times been aware, in making their investment, of the risk that they could potentially lose everything should ConnectU prevail in its claims to own the FB IP. That is a devastating outcome for FB shareholders, of course, but the claimants here (unlike Mr. Ceglia) cannot be accused of laches or foot-dragging in ways that make the timing of their claims inequitable and therefore unenforceable. Thus, should they get this settlement set aside, FB would be faced with years of future litigation during which a serious question mark would hang over the entire value of its company. Hence, no IPO; hence, a far higher cost of any financing down the road. The stakes are high in this case."
Money, then, would appear to be the main driving element here. By playing with house money, the twins stand to gain by continuing to leverage their legal threats. That is why this whole thing has taken on a Terminator-like quality. In the end, they will either run out of legal leverage or they will be paid off. Time will tell on which it will be but I doubt that they will back off gracefully regardless of any windfall they might have already received.
"They're suing me because for the first time in their lives, things didn't work out the way they were supposed to for them"
They need to let it go.
When I think of what I could build / research with $5-10M cash in the bank...
If I meet my financial goals, how do I prevent my child from turning into a helpless person who just couldn't possibly live on less than she was accustomed to, growing up?
I didn't really want for anything as a kid, but my parents weren't extravagant. Nevertheless, it did set a kind of baseline for me.
The problem is once you scale up, it's very hard to scale back down. I'm shocked by people who are struggling to live on $200 K+, but I suppose, perversely, it makes sense given what they've become accustomed to.
Human being is meant to work hard, play hard and love hard to be happy. I have same thoughts - if I make what I've set out to do, how do I prevent spoiling my children. One answer would be to raise them in an ascetic fashion - short on consumer goods and long on interesting people and experiences.
If all your peers are going on expensive vacations, to expensive restaurants etc, and you're not going then you can't really hang out with them.
I.e. there're both perceived and real costs-of-entry to certain circles. As an independent-minded adult, this is easier to resist, but for a school-age kid it could be overwhelming.
I find it odd that people pile fortunes for their kids while claiming that they don't have time to teach them and spend time with them. When in reality your kids the your biggest insurance and investment of your life. What is a point of working whole day so you can pay another person to raise your kid? Who's kid are you raising then anyway?
Careful not to over-generalize. It's quite possible to be an involved parent, while still sending your kid to daycare etc.
I'm not sure whether you've raised kids, but one thing about babies / toddlers is that in certain phases, they're absolutely relentless. You literally cannot take a 5 min break for 12 hours or so. That was a surprise to me.
EDIT > Except when they're asleep.
I do have similar feelings about nannies, though. Im sure there are great nannies out there, but what I typically see are glassy-eyed toddlers being wheeled around by nannies who are chatting on the cell phone. The kids get affection, but very little learning interaction.
That can't compare with the kind of high-bandwidth learning a curious child can have with an involved parent and mentor.
For a famous example, consider the special relationship that Feynman had with his father.
I make 170-180K, and I can only afford to rent. I don't spend that pretty much on anything, I don't go out that often, but there's no fucking way I can afford to buy.
Because of the way you (we)'ve been socialized, you perhaps see owning as respectable and renting as vaguely disreputable.
But, "only renting" in Manhattan is not like "only renting" pretty much anywhere else in the world.
Not trying to be a jerk here, because I understand the desire is real.
But essentially you're starting to feel entitled to live in Manhattan, without those pesky compromises.
In exactly the same way, I'm starting to feel entitled to owning a nice house in a nice neighbourhood with good schools, that's not out in the suburbs, with spending money left over for books and computers, and ...
Never mind that my neighbours have BMWs but I drive an old beater. My baseline (the things I'm not eager to compromise on) is already higher than what the vast majority of people in my country have.
Every step is reasonable, but you can end up in a strange place.
> Here every shitty 1br apartment costs $800K+.
Daaamn. Here that buys you a 3 bedroom house in an exclusive neighbourhood in mid-town, on the main subway line.
Except for this tiny competition they took part in one time. Nothing major. I think they call it the "Olympics" or something like that.
In your same manner of reasoning, h.264 was not invented, it simply emerged spontaneously at a certain point of the technological timeline, as the natural progression of things.
I would argue it was facebook's reliance on open-source software and existing Friendster techniques (THAT WERE PATENTED BY FRIENDSTER), that allowed Facebook to succeed.
It's the concept of 'multiple independent discovery' - http://en.wikipedia.org/wiki/Multiple_discovery. Just because somebody got around to patenting a concept first doesn't mean that many others didn't think of it at the same time.
You probably know how it is - many people have the seed of an idea, several will take it further than that, a handful might get to the stage of implementation - but only a couple will make it to the point of success.
Just because somebody got around to patenting a concept first doesn't mean that many others didn't think of it at the same time.
Correct, however, the party that owns the patent, decides who can and cannot implement that concept in real life.
Perhaps Facebooky did not 'invent' many of the social methods and processes it's service uses, and instead 'copied' them from existing entities (some of which were patented).
My point is mostly that software patents don't prove original invention. And moreover, buying patents indicates nothing. There are tons of reasons to want software patents, not least of which is a need to defend oneself against trolls. Many companies buy patents related to their core technologies not because they are afraid of getting sued for infringing on those particular patents, but because they want to present a credible threat of countersuit should anyone sue them.
Of course it could be both. I'm just saying that buying patents proves nothing.
What, in your mind, proves anything?
The line from the movie is tautological for a reason, and it actually makes an interesting point about software patents. It's using the word "invented" in the "created/built" sense: essentially, "if you had invented facebook, you would have created facebook." You can't separate the idea from the execution of the idea.
Interpreting facebook's buying of patents from friendster as evidence they didn't "invent" the product kind of misses the point.
If you want to use words as variables, my all means, go ahead.
What is the point? "You can't separate the idea from the execution of the idea."
It is separate, and has been demonstrated by numerous companies.
The idea of a chair and the execution of building a chair are indeed separate. But I challenge you to fully specify every aspect of a software product without building it first. There are so many intricacies and connections that don't become clear until it's actually built.
Anyway this has gotten pretty far off topic so we should probably stop.
Agreed.
Lawyers are very good for telling clients what they want to hear, and for taking their money in battles to "do what's right".
If these guys had any sense, they'd bail out of the case, fire the lawyers, and write a book about how totally awesome they are. Hell, pay ten million to have it promoted. Then spend the rest of their lives trying to recapture the magic or sitting on a beach with drinks with little umbrellas in them, whatever their choice.
I don't think they'll do that, though. There's a lot of pride and ego involved here.
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Some lawyers indeed do that. And in a given case it may look like that's what's happening.
But lawyers are constrained by legal ethics rules, which really do require us to put our clients' interests above just about anything else:
1. Lawyers are required to be zealous advocates for our clients' causes. That's a universal feature of legal-ethics rules in the U.S., and AFAIK in most other countries too.
2. Once we take on a client representation in a given matter, we're not allowed to fire the client except in limited circumstances or with the client's agreement. If the client goes flaky, we may be stuck with him / her / them / it.
3. Lawyers can, should, and typically do advise clients about the potential downsides of a given course of action, including bad PR. But in the end, unless the client is asking us to do something illegal or unethical, it's very likely the client's call, and there may not be much we can do about it.
The foregoing can sometimes be a convenient excuse for lawyers to do unsavory stuff on behalf of their clients. But the alternative might be a system in which lawyers were allowed to bail out on their clients at will -- and in which people with unpopular causes were unable to get legal representation. I don't think many people would want that kind of system, especially when they realized that someday they might be the one who couldn't get a lawyer.
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Source: http://www.nytimes.com/2010/12/31/business/31twins.html?page...
Though I agree that the execution is as important as the initial idea, if not more. There is also luck in play here by the coincidence to start this project with exclusive access to high ranked universities inducing an outstanding attraction. It is not sure that this was part of the idea and strategy proposed by the twins.
Why don't they just take the money they won and do that with some other idea? There is plenty of stuff to do, as we all know on this board. It would look much better to everyone if they showed what they are capable of. Eduardo Saverin is funding some pretty interesting ventures. Otherwise it looks like they're admitting this was their one and only big idea.