In 2011, Frank Reginald “Reggie” Brown, IV was an English major at Stanford University, living in the Kimball Hall dormitory. There Brown conceived of an idea for a mobile device application that would let people send pictures from one phone to another, but with a novel catch: the picture would self-destruct shortly after viewing, so the recipient could not save or forward it. The idea would become the lucrative Snapchat product, at one point valued at $15 billion (an astounding figure considering that customers do not pay for the service and a way to make profits had not yet been devised). But Brown, having failed to formalize a contract, had to fight for his share of the value.
As spring blossomed in Palo Alto that year, Brown was hanging out in the dorm room of a friend, Thomas Spiegel, when he explained the app. Spiegel called it a “million-dollar idea.” After Spiegel asked Brown if they could work on it together, Brown said yes, and the two shook hands. That night, they began searching for a computer coder to help. After interviewing several candidates, they chose Robert Cornelius Murphy. Another Stanford student and friend of Spiegel’s, the three were all also Kappa Sigma fraternity brothers.
The trio then agreed orally to develop the app—which Brown initially called “Picaboo”, after the children’s game—and split profits among them equally. Control and management would likewise be shared, and each would have specific roles: Spiegel, chief executive officer; Brown, chief marketing officer; and Murphy, chief technology officer.
In July 2011, they launched the app, which instantly drew strong interest and repeat customers. Through August, the three continued to share the work, even as Brown and Murphy went to their respective family homes for the rest of the summer. That’s when things turned ugly. Read More