How Facebook’s fbFund Turned Garage Developers Into Millionaires

Facebook isn’t just a social network anymore. It’s a gold mine for anyone who can code.

If you’re a developer with a decent idea and a lot of ambition, this company might be the thing that makes you rich. It started in 2004 as a college directory. Now it’s a global empire. The platform opened its doors to outside developers in May 2007. This was a huge shift. It let users add custom programs directly to their profiles.

To prove the platform was truly open, they held an event called f8. It was an eight-hour hackathon. Eighty-five new apps were born that day. Video sharing. Game clones. Scrabble variants. All created in real-time.

But the grants were just the beginning.

The fbFund and Developer Grants

In September 2007, Mark Zuckerberg dropped a bombshell. Facebook had a $10 million pile of cash ready to go. They called it the fbFund.

This wasn’t a vague promise. It was real money. The grants ranged from $25,000 to $250,000. For a solo developer or a small team, that’s life-changing capital. There were no limits on how many apps you could submit. One person could build five apps and cash out.

“fbFund grants are actually just the tip of the iceberg.”

The money itself wasn’t the only draw. Facebook wanted to be more than a checkbook. They positioned themselves as venture capitalists for the right apps.

Here’s the deal. You keep ownership of your software. Facebook doesn’t take a piece of the company right away. They just get the first right to invest more money later. They want to help you turn a cool script into a real startup.

It’s a dream scenario. Think of Zuckerberg as Willy Wonka. He’s sitting in his chocolate factory, waiting for Charlie Bucket. He’s handing out golden tickets. Except these tickets come with a bank account attached.

Why This Model Works (And What’s Missing)

Zuckerberg isn’t giving away the keys to Facebook. He’s just removing the friction.

Finding venture capital is usually a nightmare. It’s frustrating. It’s slow. Facebook skipped the middleman. They put the money out there and said, “Come get it.”

There is one catch. One major stipulation.

Facebook won’t touch you if you’ve already taken venture capital from another source. This rule serves two purposes. First, it spreads the money to overlooked devs. It’s a love for the underdog. Or, as the old tech blogs called it, infracaninophilia. Second, it protects Facebook legally. If you’re already funded elsewhere, who owns the software? Who owns the equity? Facebook avoids that sticky mess by staying out of it.

For unknown developers with drive, this is a cash cow. But online income isn’t just about grants and equity deals.

Build Wealth Online!

The fbFund was just one piece of the puzzle. There are other ways to earn a living on the web. Big ways.

The next part of this story covers the rest. How you can actually make money online without waiting for a grant. But for now, the basement developers are winning.

The Reality of Virtual Economies and Digital Hustles

The hype around Facebook’s fbFund was about developers. Real developers. Not the rest of us staring at our screens, wondering how to slice into that digital pie. If you aren’t coding the next big social app, you’re left with options that require either serious patience or a willingness to grind.

Take Second Life. It’s not just a game; it’s a simulated economy. Users buy land. They build businesses. They craft digital cars and furniture to sell to other residents. The currency, Linden dollars (L$), isn’t just play money. It converts to real cash. In late 2007, the exchange rate sat around 270 L$ to one US dollar.

Is it a get-rich-quick scheme? No. But it’s a place where real commerce happens. Car manufacturers like Nissan, Scion, and Pontiac opened virtual showrooms. When actual global brands enter a space, competition spikes. Prices for digital goods might rise. The stakes get higher.

Then there’s the darker side of gaming economies. In World of Warcraft, items have tangible value. This spawned virtual farmers, primarily based in China. These aren’t casual gamers. They are paid workers who perform repetitive tasks to harvest in-game currency and items. The goods are sold for real cash elsewhere. The farmers? They earn subsistence-level wages. The profits go up the chain, not down to the people clicking the mouse.

Speculation is another angle. Virtual real estate can be lucrative. In 2007, three shopping malls in the Entropia Universe went under the hammer for $180,000. That’s not pocket change. It’s proof that digital assets can command serious market values.

For those who want to do less work, there are the click-based models. Cash Cliques on Facebook pays users to open ads for twenty seconds. You get five shares per ad. Hit 10,000 shares, and you can cash out. It’s a pyramid structure. You recruit friends. They recruit their friends. The base expands, and the top layers rake in the majority of the shares.

Legal warnings are necessary here. Selling World of Warcraft items violates Blizzard’s terms of service. Cash Cliques has been flagged by some as potential fraud. The line between “hustle” and “violation” is thin.

There are legal alternatives, though. 123RF lets amateur photographers upload royalty-free stock photos. You get 50% of the download fee. Add-on earnings include 36 cents per subscription download. Referrals also pay out. It’s cleaner. It’s safer. But the margins are slim.

Online income hasn’t hit a stride where payouts are substantial for the average person. You won’t be buying a house with your Second Life profits. If you need rent money tomorrow, the old reliable still works: sell your physical stuff on eBay.

Lots More Information

Related HowStuffWorks Articles

• Can I make my living in Second Life?

• How eBay Works

• How Start-up Capital Works

• How Banner Ads Work

• How Creating an Online Business Works

More Great Links

• Send a proposal to Facebook’s fbFund

• Manpower’s World of Virtual Work Video

• Sell your photos on 123RF

Sources

• Irvine, Dean. “Virtual Worlds, Real Money.” CNN March 12, 2007. http://www.cnn.com/2007/TECH/science/03/12/fs.virtualmoney/ index.html?iref=newssearch

• Valdes-Dapena, Peter. “Real Car Brands Enter Virtual World of Second Life. CNN. November 17, 2006. http://money.cnn.com/2006/11/17/autos/2nd_life_cars/index.htm

• “Cash Reward For Facebook Programs.” BBC News. September 18, 2007. http://news.bbc.co.uk/2/hi/technology/7000403.stm

• “China’s ‘Gold Farmers’ Play A Grim Game.” NPR. May 14, 2007. http://www.npr.org/templates/story/story.php?storyId=10165824

• “Facebook Announces fbFund.” Facebook. September 17, 2007. http://www.facebook.com/press/releases.php?p=4821

• “Facebook Unveils Platform for Developers of Social Applications.” Facebook. May 24, 2007. http://www.facebook.com/press/releases.php?p=102

• “How Can I Use Facebook To Make Some Extra Cash?” Earn Money Online. http://www.squidoo.com/facebookcashcliques/?print=1

• “LindeX Market Data.” Second Life. September 29, 2007. http://secondlife.com/whatis/economy-market.php

• “Member FAQ.” Cash Cliques.http://cashcliques.com/faq.php

• “Not 1, Not 2, But 3 Ways You Can Make Money With 123RF!” 123RF. http://www.123rf.com/submit/makemoney.php

• “The World of Virtual Work Defined.” Manpower. http://files.shareholder.com/downloads/MAN/174359745x0x117499/3e4a9419-2d9b-435e-a535-ce44555b3eada/MP_World%20of%20Virtual%20Work%20Defined_FINAL.pdf