Color Will Shut Down on December 31st(color.com)
color.com
Color Will Shut Down on December 31st
http://www.color.com
65 comments
This might be a good time to point out that they could have built the same app for a tiny fraction of the amount spent. If they had done that, they'd still be moving down the road looking for traction.
Ok, to be contrarian, "Why is this a good time?"
Here is what I don't agree with in this statement, you take the app they shipped and the money they raised and you then assert they could have done it for so much less.
The flaws in that claim are that the shipped application is probably not particularly close to the 'vision' of what they wanted it to be, no doubt it was a minimum viable product to test the basic concept, and you and I don't really know how much money they spent, we know how much they raised, they could have most of it still in the bank, less real estate and salary costs.
I don't think there was anything at all wrong with the color "concept" or what they were trying to achieve. The two things that failed were; they raised too much money and their management collapsed.
Raising too much money is a well known risk for serial entrepreneurs, after a few 'hits' you find a lot of people want in on your next project. (apparently this is true in Hollywood too but I've no personal experience with that). The 'right' thing to do is get your minimal funding and move on, use the extra leverage to improve the term sheet, not get more money. Rule #1 for any startup is have a plan for every single dollar you raise.
I can assure you that even if they had the printing money [1] product having that much dysfunction at the top level is going to kill it dead. Further its really impossible to ship something if your leadership isn't at least somewhat aligned and sharing the same goals. That is particularly true of the CEO. As its one of the CEO's primary responsibility to guide the train to its destination, if they are compromised the train stops. That is what you have a board of directors, having only the overall success of the company as their motivation they are supposed to recognize this and toss the CEO. Say what you want about Yahoo's board but they certainly have the 'fire the CEO' process down.
Color was a spectacular failure, but not because the app they shipped could have been shipped for less, rather their failure is that they executed so poorly against their original vision.
[1] http://techcrunch.com/2010/10/05/stupid-questions-vcs-ask/
Here is what I don't agree with in this statement, you take the app they shipped and the money they raised and you then assert they could have done it for so much less.
The flaws in that claim are that the shipped application is probably not particularly close to the 'vision' of what they wanted it to be, no doubt it was a minimum viable product to test the basic concept, and you and I don't really know how much money they spent, we know how much they raised, they could have most of it still in the bank, less real estate and salary costs.
I don't think there was anything at all wrong with the color "concept" or what they were trying to achieve. The two things that failed were; they raised too much money and their management collapsed.
Raising too much money is a well known risk for serial entrepreneurs, after a few 'hits' you find a lot of people want in on your next project. (apparently this is true in Hollywood too but I've no personal experience with that). The 'right' thing to do is get your minimal funding and move on, use the extra leverage to improve the term sheet, not get more money. Rule #1 for any startup is have a plan for every single dollar you raise.
I can assure you that even if they had the printing money [1] product having that much dysfunction at the top level is going to kill it dead. Further its really impossible to ship something if your leadership isn't at least somewhat aligned and sharing the same goals. That is particularly true of the CEO. As its one of the CEO's primary responsibility to guide the train to its destination, if they are compromised the train stops. That is what you have a board of directors, having only the overall success of the company as their motivation they are supposed to recognize this and toss the CEO. Say what you want about Yahoo's board but they certainly have the 'fire the CEO' process down.
Color was a spectacular failure, but not because the app they shipped could have been shipped for less, rather their failure is that they executed so poorly against their original vision.
[1] http://techcrunch.com/2010/10/05/stupid-questions-vcs-ask/
There was IMO a third failure: they released an app with no clear purpose and no indications of what it was meant to do. I downloaded it after the hype about the acquisition, had to guess what the different icons did, I made a profile image and took some photos that were maybe uploaded somewhere?
I've no idea what was actually meant to happen, except it was supposed to share photos somehow.
I've no idea what was actually meant to happen, except it was supposed to share photos somehow.
Agreed the app had no clarity. At the time it released (the first app) it seemed like a real-time mash-up of that wedding thing where there is a camera on every table, and the guests are supposed to shoot candids of people around them, and then at the end of the event folks go through all the candid shots and create an album which captures the 'essence' of the event for your memory book.
Take that model, apply technology where everyone is already walking around with a phone, and boom you've got the 'color' app.
And it was a cool idea but the whole "its doing this all the time" thing really was weird. Our CEO was getting pictures of people's friends from Oracle across the street because we happened to be geographically "close." That was more creepy than interesting.
Take that model, apply technology where everyone is already walking around with a phone, and boom you've got the 'color' app.
And it was a cool idea but the whole "its doing this all the time" thing really was weird. Our CEO was getting pictures of people's friends from Oracle across the street because we happened to be geographically "close." That was more creepy than interesting.
This might also be a good time to reflect on the opportunity costs squandered by Color. Surely other companies did build the same app for a tiny fraction, who are either struggling or dead by now.
I remember color, their photo sharing app, never actually working... even in their 'best case' scenario. If somebody makes an app that actually works then we would know, I still think Color tried to solve a problem.
This might be a good time to reflect on the flawed ides that simply because a prior company failed with a similar idea or product, that you too are destined to fail.
This might be a good time to reflect on the individuals who bootstrap a product without any outside investment in a seemingly dead or toxic market and still succeed.
I doubt they spent $45MM on the app. Actually, I wouldn't be surprised if they returned most of the money to investors OR are doing another type of app/business.
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In 1.5 years, $41 M gone. This company was full of so much drama. It's a shame that really good investors had to deal with a lot of grime.
Investors in startups are making bets. If they deserve the huge payouts they get when they bet correctly, then they don't deserve pity when their bets go wrong.
In this particular case, Bill Nguyen had a whole bunch of red flags, including exiting shortly before his previous companies failed. I, for one, am not happy that investors continue to give such large amounts of money to such obvious carpetbaggers. The Bill Nguyen's of the world thrive because they are allowed to.
In this particular case, Bill Nguyen had a whole bunch of red flags, including exiting shortly before his previous companies failed. I, for one, am not happy that investors continue to give such large amounts of money to such obvious carpetbaggers. The Bill Nguyen's of the world thrive because they are allowed to.
Put yourself in his shoes. You have seen that the team is not working well together. The product vision is getting executed badly. Lot of VC money went down the drain. What would you do? Wouldn't you exit while the sun is up?
Not let it get so dysfunctional in the first place. You are right that down the track after everything the best thing was to exit.
As investors, isn't it part of their job to ensure the people they are giving boatloads of money to aren't grime?
I agree that the whole story of Color was a "shame", but the whole thing sounded like an overhyped pipedream to most onlookers to begin with, so when it turns out that's what it was I'm not going to cry a river for the investors.
I agree that the whole story of Color was a "shame", but the whole thing sounded like an overhyped pipedream to most onlookers to begin with, so when it turns out that's what it was I'm not going to cry a river for the investors.
Bluntly, that's the point of investing. The investor assumes the risk that their invested capital vaporizes. The risk assumption predicates the possibility of higher returns than a less risky investment. It's not a savings account with guaranteed returns.
Last time I heard vague numbers thrown around, 90% of VC-funded startups fold, 9% go into some kind of functional equilibrium, and 1% make it big. Ergo, you should actually reckon on failure being the norm.
Last time I heard vague numbers thrown around, 90% of VC-funded startups fold, 9% go into some kind of functional equilibrium, and 1% make it big. Ergo, you should actually reckon on failure being the norm.
Company still has a significant amount of cash left in the bank that they're returning to investors. Someone below quoted 25m? I wouldn't be surprised if it was even higher.
Who's to say that they spent the $41.m million? What ever's left will be returned. The fact that Apple bought them for $9M hints that Apple may be covering the amount they spent but even that is pretty hefty. The investors won't be able to reinvest it in their current funds though.
Where did all that money go? How many employee did the company have?
Who said the money was all used up? Last I heard they had a lot of it in the bank ($25M or so) and since they sold off assets to Apple it's likely they were able to return a pretty decent chunk (in the neighborhood of 70%).
http://www.fastcompany.com/3002341/color-failed-what-happens...
http://www.fastcompany.com/3002341/color-failed-what-happens...
I would also love to know this. Where did the money go? In an era where infrastructure cost is cheap, the big expense should be labor. But seriously, $41m?
Will we ever know how much Apple paid for Color?
The missed a trick here they should have said that they were closing down on 21 December 2012. Then no one would be sure....
Maybe Color is finally sick of playing jokes on the industry.
The Mayans would be sure.
But really, who didn't see this coming after the first launch went sour? I read the indictment yesterday and there's some pretty hairy stuff in there, but one has to wonder.
I think most people will think twice before climbing into bed with Bill Nguyen again.
But really, who didn't see this coming after the first launch went sour? I read the indictment yesterday and there's some pretty hairy stuff in there, but one has to wonder.
I think most people will think twice before climbing into bed with Bill Nguyen again.
I didn't see the article about the indictment - but here it is if anybody else wants to read it.
http://www.sfgate.com/technology/businessinsider/article/Ex-...
http://www.sfgate.com/technology/businessinsider/article/Ex-...
...aaaand the world continued not caring.
I remember reading about Color from the get-go and being astounded by the inordinate amount of money invested in this idea. Not surprised to see how it turned out.
What was the idea, again?
Something like live mobile streaming? http://color.com/about :
At Color, we believe in the opportunity that the new mobile era presents and are excited about developing products that transform the way people share the stories of their lives.
We work collaboratively, iterate often, and enjoy problem solving. Color is a company of entrepreneurs and innovators, highly skilled in their respective specialties, constantly striving to learn and grow.
We’ve cultivated a very relaxed and informal culture and enjoy our extra curricular activities, which include but are not limited to: ping pong tournaments, ball pit acrobatics and impromptu poker nights.
It seems like someone with a modicum of jargon, zero ethics, and balls of brass would be able to suck a nearly unlimited amount of cash out of the herd mentality that rules VC. Perhaps there's a startup idea in there.
> Perhaps there's a startup idea in there.
Bill Nguyen, Inc. for the last two-odd years...
Bill Nguyen, Inc. for the last two-odd years...
It was a geolocation social network w/ pictures that are tied to locations. Then it pivoted extremely quickly to live video streaming.
Initially, Color was for photo sharing around a place and time. For example, if you and I are using the Color app at the same party we would see each others photos even if we aren't "friends". It's a little abstract, but a very interesting take social sharing.
Didn't it used to listen through your microphone and match signatures of the sounds up with data from other people's phones to figure out if you were in the same room?
That and a number of other clever things. The tech and talent acquisition was likely a good one. As a product, Color was launched so clumsily, and squandered its one good shot at a relaunch.
Google Plus has a similar functionality that is pretty neat, however it requires people to "Attend" an event.
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Was the original idea for you to take a picture at an event and see other people at the event taking the same pictures? What is is now? And is anyone implementing the original idea? I think it is pretty cool, not 30/40 million cool
The original idea was to build an implicit or 'implied' network with a social graph based on your behavior rather than social graph you manually select yourself (like on Facebook, Twitter, Path, etc). I think that was a pretty big idea, and it's a shame they couldn't get it to work.
( The photo app was just an MVP if I understand correctly. )
( The photo app was just an MVP if I understand correctly. )
Not quite Color, but Google announced something similar at the last I/O:
http://support.google.com/plus/bin/answer.py?hl=en&answe...
http://support.google.com/plus/bin/answer.py?hl=en&answe...
What did Color do again?
Does anyone else know of open source (or not) tech that would easily allow live streaming like color did? I'm sure it needs some kind of beefy backend, no? Use case: Local sporting events with smartphone holding spectators capturing different "views".
Given that they had the cash, Akamai's iPhone streaming service or they rolled their own. It's fairly well documented, search for HTTP Live Streaming. The kicker is building it out to manage thousands of connections without dropping quality, and getting low-delay if you want a genuine 'live' experience. There's also OpenTok.
Why didn't Color read PG's essay on startup ideas?
Because it was published on November 2012?
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