How To Screw a Friend Out of an $800 Million IdeaS

There are some forces so powerful, not even the wrought iron bonds of frat friendship can withstand them. Money is one—and so the fun-loving young dudes who made Snapchat are at each other's throats in court. Here's where it started to go bad.

In these legal documents, originally surfaced by TechCrunch's Billy Gallagher (who totally coincidentally was in the same fraternity!) you can see a simple narrative of geek treachery play out. Three boys, fellow Stanford students and fraternity brothers, start working on an app together—"Future Freshman." It doesn't work out, so they begin a photo messaging service instead. You probably use it. They have disagreements over who deserves how much credit. They drink. They insult and feel insulted. They change passwords. Now there are only two left—Bobby Murphy and Evan Spiegel—the third, Reggie Brown, is left with nothing as he watches his former bros become millionaires. Spiegel recently picked up his first Ferrari.

How To Screw a Friend Out of an $800 Million Idea

How did the team go from boundless fraternal love to litigation so quickly? During a recent deposition, Brown talks of a drunken conference call regarding Picaboo, Snapchat's former name, that went south:

How To Screw a Friend Out of an $800 Million Idea

Evan Spiegel resented Reggie Brown's claims that he'd helped direct Snapchat, and eventually denied him any stake whatsoever in the company. Snapchat's argument today is that Future Freshmen became Picaboo, which became Snapchat—but because Brown allegedly never had equity in Future Freshmen, he was never entitled to what it turned into.

But there's another claim here—you might even call it philosophical! Brown was an English major, an ideas man, while Spiegel and Murphy were doing the hard work, the important work, they believed. And indeed, they probably were responsible for the lion's share of coding, but that's a fact that didn't stop Spiegel from telling Brown he was responsible for the underlying concept of Snapchat:

How To Screw a Friend Out of an $800 Million Idea

"The idea of disappearing messages." That's the $800 million sentence, but a contribution that apparently warranted zero equity. You can argue reasonably about whether the conception or execution of a plan is the nobler part, but it's hard to claim the former is worth jack shit. To Snapchat, it is. Brown was also responsible for filing a patent on the idea—with an application that listed Spiegel's name last, another source of ego rupture.

How To Screw a Friend Out of an $800 Million Idea

With disagreements over who was or wasn't pulling his weight, the perceived patent snub, and the addition of alcohol, manners quickly broke down when Brown asked for a slice of the company:

How To Screw a Friend Out of an $800 Million IdeaS

That apology wasn't much more than a gesture. Murphy and Spiegel wouldn't give Brown what he wanted:

How To Screw a Friend Out of an $800 Million IdeaS

Or maybe anything at all:

How To Screw a Friend Out of an $800 Million IdeaS

"Some point in the future" never came around—the trio was too strained, likely realizing that they were on the verge of a hit, and that heavy cash was on the line. Emails from those days show snippy exchanges between Spiegel and Brown:

How To Screw a Friend Out of an $800 Million Idea

It's a bad sign when you start addressing your friends by their first name.

This was the end of the end: right around here, Spiegel allegedly cut out Brown completely. Passwords to all of their shared accounts were changed, and contact was severed. His position in the group was replaced with new personnel. Brown had nothing to show for his participation in Snapchat—zero equity—the only "credit" he got for the idea being that text message and his name in court documents.

Still, getting ousted from a successful business isn't always so bad if you wait long enough. But no one wants to be Eduardo Saverin if they have even a fleeting Snapchat's chance at being a Zuckerberg.