Most people's knowledge of how Facebook started comes from The Social Network, a film with a screenwriter, a dramatic structure and a deadline. It is a very good film. It is not a source.

The documented version has better details in it anyway.

The opening scene is invented

The film begins with Zuckerberg being dumped by Erica Albright, and builds its whole thesis on that: he made the thing out of wounded pride, to get at women who would not have him.

Erica Albright is a fictional character, written for the film. There is no real person behind her.

Zuckerberg's own account is that he built the site out of boredom, and that the goal of the bigger version was to let people around the university connect. You do not have to take a founder at his word about his motives. You do have to notice that the popular explanation rests on a character who was made up.

Facemash was real, and worse than the myth

The cruel bit is not the invented part.

In October 2003 Zuckerberg built Facemash, which put photographs of two female Harvard students side by side and asked visitors to vote on which was more attractive. It drew 450 visitors in its first 4 hours. Harvard shut it down and he faced charges including breach of security and violating individual privacy.

That is the actual origin story, and it is not flattering. It also has nothing to do with a break-up.

The Winklevoss settlement, and the irony inside it

Cameron and Tyler Winklevoss, with Divya Narendra, said Zuckerberg had agreed to build their site, ConnectU, and built Facebook instead.

After a single day of negotiation the parties signed a handwritten settlement: the plaintiffs gave up ConnectU in exchange for $20 million in cash and $45 million in Facebook stock, the shares valued at $19 each at the time. That is where the widely quoted $65 million comes from.

Then they tried to undo it, arguing the stock had been misvalued. The Ninth Circuit refused. They dropped the case in June 2011.

By Facebook's 2012 IPO that stock was worth a large multiple of its settlement value — reported at close to $500 million. The twins spent years in court trying to escape the most valuable part of the deal they had signed. The cash was the small half.

Divya Narendra is the third name in that case, and the one almost nobody can recall, which tells you something about how these stories get compressed.

Eduardo Saverin

The film's other central relationship is the one it handles most loosely, by consolidating several separate legal disputes into one courtroom.

What is on the record: Saverin's stake was diluted, he sued, the two sides settled, and he was reinstated as a co-founder in Facebook's own account of its history. The exact percentages that circulate — a fall from roughly a third to a fraction of a percent — are widely repeated and not confirmed by either party, so we are not going to state them as fact.

Two prices that say more than the drama

The company was thefacebook.com before it was facebook.com.

In August 2005 it bought the facebook.com domain for $200,000. In November 2010 it paid the American Farm Bureau Federation $8.5 million for fb.com.

Those two numbers, five years apart, are a cleaner measure of what happened to the company than any scene in the film. The same organisation, buying the same category of asset, at a price 42 times higher.

Why the myth is worth correcting

Because founding stories are used as instructions.

We have written about the Zomato rejection myth and what Paytm's founder actually gave up in 2003 for the same reason. A tidy origin story teaches a lesson — persist, be rejected fifty times, build it out of heartbreak — and the tidiness is usually the part that was added.

The real Facebook story teaches something less quotable and more useful: the founder was already in a dispute over ownership before the product existed, the paperwork that settled it was handwritten, and the party that felt cheated later fought to get out of the piece of the settlement that made them rich.

What is not established

  • Zuckerberg's actual motive. He has given his account. Nobody else can verify it.
  • Saverin's exact stake before and after dilution. Widely quoted, not confirmed.
  • Who contributed what to the original code. The court settled the claim without establishing a technical record.
  • What the settlement stock was ultimately worth to each party. Reported figures vary with when you measure and what was sold.