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By Nicole Goodkind

The Winklevoss twins can breathe a sigh of relief.

After seven years of litigation their lawsuit against Facebook (FB) founder Mark Zuckerberg has come to an end. Cameron and Tyler Winklevoss are using their $65 million settlement to move forward by starting Winklevoss Capital, a venture capital firm.

[Related: Winkelvoss Twins Return to Their Social Networking Roots]

The Winklevoss' struggle against Zuckerberg is famously documented in Aaron Sorkin's 2010 film "The Social Network." The movie recounts Cameron and Tyler's early partnership with Harvard classmate Zuckerberg on "ConnectU" and the resulting fallout and legal battle over ownership of Facebook.

The Winklevoss twins and "ConnectU" partner Divya Narendra recently sat down with The Daily Ticker's Aaron Task to discuss whether they use Facebook, what's Facebook's problem and how they would run the social network differently.

Aaron Task: Do you guys have profiles on Facebook?

Cameron Winklevoss: We are on Facebook. Our issue has never been with social networking the product; it was obviously an underlying ownership issue and the way Mark [Zuckerberg] behaved towards us.

AT: Are the lawsuits done now, is it all over?

CW: Yep, we're all concluded on that and we're moving forward.

AT: Did you all see the movie? What did you think of it?

Tyler Winklevoss: We actually went to the premiere in New York. It's a great piece of entertainment, there's a lot of truth to it, especially the overarching themes. At the end of the day we're proud of how we were portrayed.

AT: According to reports thesettlement you guys got with Facebook included $45M in private Facebook stock. Are you still holding the stock and what do you think about how it's performed?

CW: We are unable to answer that first question but as far as the second, [the Facebook stock hasn't] come out of the gates as well as most people expected.

AT: Where did you think Facebook went wrong?

CW: For starters you have to leave something on the table and that didn't happen. People naturally got burned. I think when you alienate a group of investors it takes time to build that rapport back.

TW: The rhetoric was probably not quite right. You have to embrace that you're a business in order to make revenue, in order to plow it back and build a better product.That [Zuckerburg's business model] might work in Silicon Valley with venture capital firms but when you go public and you're talking to the Street they're much more concerned with numbers and bottom line and accountability. I think that was one way they could have improved.

AT: What could Facebook have become versus what it is now if things had turned out a little differently for you guys?

CW: With respect to us being involved in the actual company? Well I think that the reality is that the core aspect of the site, which is a social network to connect people, has not changed at all and is still the same today. I think that you'd still be looking at a social network and I think that it could still scale to a billion users.

TW: I think Google's (GOOG) done a really good job of being a tech company that's friendly and that people like but that also does serious business. I think we would have steered it a little more in that direction. We live in the real world and you have to be a business like Apple (AAPL) or Google to grow and evolve and to be able to take those risks and keep things moving along. People shied away from that a little bit and almost thought, 'that's not a good thing to be' and I think that was probably a mistake.

AT: Do you think you could have morphed [Facebook] into a premium model site almost like SumZero is today? Do you think that's a legitimate model for a mass-market social networking site?

CW: One of the things that everybody has sort of seen is that they were caught flat-footed with mobile strategy.

TW: Which is ironic cause they were all over the S-1.

CW: Yeah, either the top management didn't understand that it had to go mobile or it didn't get the right feedback. I don't know the answer to that and I'm not saying that they could have necessarily had done it better but it seems like the transition from the website to mobile did not happen without losing the dollars online.

AT: To your point about it being in the S-1: Anyone who bought the stock, shame on them for not doing that even modicum of due diligence to see that those things were happening.

TW: There is a cognitive dissonance between an acknowledgement and actually putting it in your S-1 and not doing it. It's hard to reconcile how it wasn't achieved. I think the other issue was that the float was too large. Scarcity is important. I know it's easy to armchair quarterback it; I'm not trying to say that it was so obvious. I don't think anyone expected it to be where it is today but if you're asking about what went wrong I think there were a couple of glaring facts.

AT: You're running a social network now. Do you have any thoughts on what Facebook could be doing different, better, where they went wrong?

Divya Narendra: I think one of their issues has really been a PR issue. I think that it's very important that you communicate with your investors and in their case I think they certainly air on the side of secrecy more than transparency on how they plan on evolving. Maybe that's changing a little bit, we saw Mark speak at TechCrunch Disrupt recently; it obviously had a very significant impact on the stock price. It was great for the stock. And so I think probably more of that, more transparency on how they actually plan on evolving. Their mobile strategy, he obviously mentioned search, that was another big topic of discussion. And certainly after that speech people are wondering what that means for their bottom line. But communicating well, I think, is a big piece of the overall impression that's left on investors.

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