A bit of one, a bit of the other.
A zip file is an excellent analogy for DNA by the way, so yes, everything starts with the extraction of the data.
To answer the other part of the question, the cells that make up an early embryo are ‘undifferentiated’. They’re basically all the same and have no specialist roles, what we popularly call ‘stem cells’, but can be persuaded by the instructions within DNA to become specialised. Some will become skin, others parts of organs, bone, basically whatever is required to build a person.
Every single cell contains a full copy of the code needed to make any type of cell found in our bodies. (I must admit I don’t know what the triggering mechanism is that decides what any given cell is going to be)
Edit: Almost every cell. Eggs and sperm carry only half of the code-base and must be paired to produce a full script (and a human being)
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