Overview
Mark Zuckerberg and Eduardo Saverin were two friends and Harvard University college roommates whose friendship was put to the test after the creation of what is now the world’s largest social-networking site, Facebook. Saverin, an American-Brazilian internet entrepreneur, and Zuckerberg, the founder and current CEO of Facebook, met in college and joined forces in 2004 to frame and launch the now-iconic website. Saverin, initially known as the CFO (Chief Financial Officer) of Facebook, served as a co-founder and was alongside Zuckerberg for the site’s first five years. Though a successful friendship in the early stages of the website’s development, Zuckerberg and Saverin’s relationship soon became bitter.
Early Stages
The creation of Facebook gave Zuckerberg and Saverin the opportunity to take a revolutionary idea and turn it into an entity that would make a real difference in the world. Zuckerberg’s idea — to create a platform for people to interact with each other — was welcomed by Saverin, and the two friends quickly got to work. Initially, they managed to raise $50,000 in start-up capital, split evenly between the two in the form of loans from family and friends. Saverin was in charge of managing the cash while Zuckerberg assumed control of site development.
Financial Disputes
The friction between the friends began as early as in 2006 with financial issues. Saverin was pushing for cost-cutting measures and refused to take “big risks” with the company’s money. This didn’t align with Zuckerberg’s ideas for developing the company — he believed in investing more money in order to achieve greater returns. And so the two disagreed on how to move the company forward and competing financial approaches ensued.
Growing Apart
This disagreement was only the beginning of the growing rift between Zuckerberg and Saverin. Saverin had become increasingly disillusioned with the company, the product and Zuckerberg himself. He had become disheartened by the amount of control that Zuckerberg held over the company and felt that he was not being given the recognition he deserved for his contributions to the project. As a result, Saverin began to reduce his participation in the company and stopped attending important meetings. On the other hand, Zuckerberg was putting in long hours to build the company, leading to an eventual breakdown of their friendship.
Outlook Shifted
By 2009, the outlook of the Zuckerberg-Saverin friendship had shifted drastically. Saverin’s dissatisfaction with his role in the company had become apparent and he had removed his name from the Facebook masthead. He had also been excluded from a company trip to New York. Saverin had grown increasingly estranged from the company and distanced himself due to what he deemed as “hostile takeover” like behavior by Mark Zuckerberg.
Legal Dispute
The differences between the two soon spiralled out of control, with Zuckerberg and Saverin taking legal action against one another. In a lawsuit that ended up costing the company $20 million, the legal team representing Saverin alleged that Zuckerberg had dedicated himself to “fraud and deception” in order to gain control of the company and “freeze-out” Saverin from his rightful share in the profits. The lawsuit was eventually settled out of court, with Saverin receiving a small but significant percentage of the company’s profits.
National Attention
The legal dispute between the two friends made national headlines and was even the subject of a major Hollywood film. The movie, The Social Network, which was released in 2010, portrayed the rift between Zuckerberg and Saverin and their battle over control and profits of the company. The film was a success, earning several awards and box office earnings, and bringing yet more attention to the legal dispute between two friends.
Continual Impact
The impacts of the rift between Mark Zuckerberg and Eduardo Saverin can still be seen today. The legal dispute between the two has heavily influenced the governance of Facebook and Zuckerberg’s approach to control of the company. While Saverin went on to invest his Facebook wealth into a range of successful companies, many argue that with due respect, acknowledgement and ownership, their friendship could have allowed the duo to remain partners in the venture and push Facebook to greater heights.
Evolution of Products
The feud between Zuckerberg and Saverin has, in many ways, been beneficial for the development of Facebook. Current Facebook products have evolved from the fertile ideas born from the feud and its aftermath. This can be seen in the company’s multitude of products, ranging from its innovative short-term bonding tool, Mentions, and its hidden message feature, the Marketplace, to the company’s new social media platform, Instagram Stories. The evolution of these products can be attributed to the friends’ initial creativity, combined with the divide their legal dispute created.
Social Media Platforms
Facebook’s impressive success over the years has made it the most popular social media platform in the world. The site has become the world’s foremost authority on sharing, connecting and interacting with others in a safe and secure way. By employing user-friendly features, like its popular “like” button and its ability to stream videos, Facebook continues to develop and provide users with an easier, more convenient way to keep in touch.
Competition
Today, Facebook faces intense competition with its competitors in the social media space. Other popular social media websites such as Instagram, WhatsApp, Twitter, and YouTube have all challenged Facebook’s dominance. These competitors have presented stiff competition for the company with their innovative approaches and products, creating an environment of continual evolution and improvement for Facebook in order to stay afloat. Despite the competition, Facebook remains one of the most powerful and successful social media companies in the world, dominating the industry and continuing to rein supreme.
User Demographics
Facebook’s popularity continues to grow, especially among young adults. In 2020, the company had 2.6 billion monthly active users, with almost 70% of the company’s user base being between the ages of 18 and 24 years old. The company’s ability to reach and target a younger demographic has enabled it to remain successful and as a result, Facebook continues to dominate the social media market.
Discourse and Engagement
Facebook has become a global hub for discourse and engagement, with people from all over the world gathering on the platform to share ideas, discuss issues, and support causes. Through its various discussion boards, users can communicate with each other on a variety of topics, ranging from politics to movies, and share their thoughts and opinions in an open and constructive manner. In this way, Facebook has become a valuable tool in the sharing of ideas and understanding different perspectives.
Innovations
The friendship between Mark Zuckerberg and Eduardo Saverin has been an integral part of the success of Facebook. While the rift between them created challenges and resulted in a bitter dispute, it also led to significant changes in the innovation of the company’s products. From its revolutionary newsfeed to its innovative products and features, Facebook has remained at the forefront of technology and social media, providing a safe and well-rounded platform for hundreds of millions of users around the world.
