The Social Network: From The Outside Looking In
For six years, Divya Narendra has been in a fiery legal dispute with Zuckerberg, alleging that he stole his concept for ConnectU and capitalized off of it with a little known social networking site called Facebook.
In 2008, he and his partners, twin brothers Cameron and Tyler Winklevoss, signed a $65 million settlement agreement containing a mix of cash and Facebook stock. The settlement is still in dispute, Narendra says, due to a lack of disclosure regarding Facebook’s stock valuation.
Now, with The Social Network in movie theaters, the saga continues on the big screen.
Still, the New York City native insists that he is not bitter. He is keeping himself busy with a new Internet venture for investment professionals called SumZero while pursuing a JD-MBA at Northwestern Law School and the Kellogg School of Management.
Narendra reflects on the surreal tale of watching himself portrayed in a motion picture and the lessons learned not only for him personally, but for young entrepreneurs everywhere.
I was born in the Bronx, NY and raised in Queens, where I attended public school in district 26. I then attended Harvard College, majoring in Applied Mathematics. During my junior year, I realized that there was no online platform for Harvard students to connect with one another regarding academics, student life, and campus news and events. That’s when I came up with the idea for ConnectU, an online community that could benefit students and alumni at Harvard as well students at other colleges in the Boston area. Thinking long-term, I knew ConnectU could also be used by students at colleges across the country.
This was during the 2002-2003 timeframe so the idea was partly inspired by sites such as Friendster and MySpace. The problem with these sites, however, was the lack of quality control and membership screening, resulting in a proliferation of fake profiles. The key realization that I had was the need to build an online community for Harvard where you could screen users by their email addresses. By requiring a “Harvard.edu” email, we could ensure that those who registered had an actual affiliation to the institution.
Upon coming up with the idea, I asked two of my friends to join me, Cameron Winklevoss and Tyler Winklevoss. The twins were very excited and we got to work immediately.
Together, we had a good mix of technical skills and entrepreneurial spirit, but none of us had programming expertise. We asked around campus to see who at Harvard knew how to web program. Mark Zuckerberg was brought on board to fill the missing link. Little did we know, while he was supposedly developing ConnectU, he was using our concept as the foundation for a competing venture of his own. Three months later we were stunned to read about thefacebook.com in The Harvard Crimson.
After graduation in 2004, we filed a lawsuit and the litigation proceedings have been ongoing for the past six years. Now, the movie is out in theaters. This part of the whole experience has been completely surreal. I first saw the film in Chicago, then in New York City for the premiere.
Initially, I was surprised by the actor [Max Minghella] they chose to portray me because he didn’t look anything like me. But I thought the film was entertaining and had a lot of funny one-liners. The writers also did a good job of telling the story from multiple perspectives.
Do I think the movie accurately portrayed the situation with me and the twins? The film is more fact than fiction, especially with regard to the material facts represented. I thought it was entertaining and had a lot of funny one-liners. The writers also did a good job of telling the story from multiple perspectives.
What’s keeping me busy these days? After leaving Harvard, I went to New York City to work in the Mergers and Acquisitions group at Credit Suisse. There, I gained an interest in value investing and, in 2006, I returned to Boston to work at a hedge fund called Sowood Capital Management where I analyzed investment opportunities across the capital structure.
This is where the idea for my new company, SumZero, was born. While I was at Sowood it occurred to me that there was no trusted online platform that existed for hedge fund managers to trade ideas about equities, credit, and other types of securities.
Inspired by Wikipedia, I wanted to create a universal, encyclopedic database for investment ideas. However, unlike Wikipedia, content contributors would be limited to hedge fund, mutual fund, and private equity analysts. Typically, you don’t see this group exchanging ideas out in the open because the information is so proprietary.
In 2008, I launched SumZero and today we have 4,300 analysts and portfolio managers from all over the world sharing ideas on the site.
Around this same time, I thought it made sense to apply to grad school. For me, the opportunity to get a law degree from one of the top law schools in the country (Northwestern University School of Law) and a business degree from Kellogg in only three years was incredibly appealing. Northwestern’s JD-MBA program has had a very direct impact on my ability to handle the issues that are important to running my current business as I learn about contracts, IP, securities regulations, and entrepreneurship.
Four adjectives I would use to describe Kellogg students are: sharp, well-rounded, collegial, and down-to-earth. The school is very good at attracting individuals from a wide variety of backgrounds. Students are here because they’re interested in developing broad management skills that will benefit them regardless of their long-term goals. Whether you’re interested in private equity, consulting, or start-up life, Kellogg has the resources and classes to prepare you. For those interested in launching their own ventures, Kellogg is a great place given the willingness of professors to provide advice and link entrepreneurs with sources of capital. I have found the law school professors to be equally supportive. One in particular is a former SEC chairman who put me in touch with numerous attorneys willing to provide legal advice under creative fee arrangements.
Grad school is a perfect time to take entrepreneurial risks. If you start a business in school and fail, you’ll still have your degree and be in a position to get a great job. Keep in mind that you’re already among the most employable people in the job force, especially if you join a top-tier program. My goal for the next year and a half is to continue growing SumZero.
Many of my classmates at Kellogg have asked me about my experience and the movie. Many have shared their thoughts. The High Tech Club, Entrepreneurship Club, and Indian Business Club have also asked me to give a talk this week. One of the topics of discussion will be the film.
If I knew then, what I know now. When I was 21, I never expected to be embroiled in litigation with a fellow college classmate. I was just another student excited about a start-up idea looking forward to bringing it to the market. Today, I’m more conservative in developing relationships with potential partners. I’m also more disciplined. For young entrepreneurs, I would recommend thinking about ideas that can have a far reaching impact on the world, but also thinking about what can go wrong given the inherent risks of business.
But when I think about it, had I known how to program, I wouldn’t have had the need to contact Mark in the first place [laughs].