I remember the movie mentioning that they tried some other Matrix setups before they went with 1990. What I can't imagine is what day one was like. They took a bunch of humans, maybe making babies, maybe from some storage. Then then stuck them into a world. How did these people start their fake lives? I have a few guesses, like false memories, or for a long time all adults were programs. Is this even explained in any of the Matrix franchise?
We don't know exactly how the first Matrix, the Paradise Matrix, was initialized. The history of the early versions of the Matrix is not known well enough.
We do know that the machines experimented on humans near the end of the Machine War. These experiments helped them learn how to manipulate human brains. For example, in The Second Renaissance the machines are seen manipulating humans' emotions:
It is very possible that they learned how to manipulate humans' memories as a result of these experiments, thus making it possible for them to plant false memories into the minds of the first humans inserted into the Matrix. The machines certainly acquired the capability to manipulate humans' memories eventually because they display this capability during later events. For example, bluepills possessed by Agents have no memory of their possession after Agents leave their bodies, and Agent Smith promised to re-insert Cypher into the Matrix with his memories outside of the Matrix erased. The machines are also capable of reloading the Matrix after each cycle of the One; this requires a massive change in the Matrix "reality" and thus the memories of every human inside the Matrix must be changed by the machines in order to reflect this new "reality".
It is also possible that the machines populated the first Matrix with children and used programs to stand in as adults since the machines are certainly capable of creating programs that make convincing humans (most notably the Oracle, but also the Agents, Sati, etc.). This is particularly supported by a scene in The Second Renaissance in which a child playing in the snow is called by his parents to come inside, but the child later perceives his "parents" to be Agents. (Though this possibility still leaves in question what the machines did with all the human adults if they weren't in the Matrix, too.)
It is even possible that the first humans in the Matrix were entirely aware of their previous existence outside the Matrix; the first Matrix was designed to be a paradise, and the machines may have relied on the happiness and pleasure of this Paradise Matrix to convince humans to prefer the Matrix over the real world. This could be why the Paradise Matrix was such a "disaster" in which "entire crops were lost", though this disaster can also be explained as a simple rejection of the false "reality" of the Matrix.
Overall, given the machines' experimentation on humans before the end of the Machine War and the fact that they later proved capable of manipulating human memories, it is most likely that the first humans in the Matrix were given false memories. The machines may have also planted a number of programs posing as humans in order to populate the first Matrix as well.