

Color Will Be The Pin That Bursts The Startup Bubble - goldham

I'm going to be quick.<p>-Friend showed me app on iPhone<p>-Noticed similarities between Color and Path, does not provide any usefulness to me<p>-Realized I can now creep on people nearby without having to ask their name and friending them on facebook<p>-Excitement grew with media frenzy over Color and a few friends downloading app<p>-Downloaded app<p>-Constantly crashed when uploading photo<p>-App lost its novelty<p>-App deleted from phone<p>-Startup that created app has 41MM funding
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dstein
No, the burst will come after the Facebook IPO when they can't find a way to
make the $5,000 per user per year that their stock valuation will suggest it
can earn. When Facebook stock crashes and it's plastered all over the news,
that'll be the start of the bust. We're a long way from that.

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DanLivesHere
Where are you getting $5k/user/year?

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noodle
i see ~$83b valuation, and ~500m active users, putting it at around $166/user

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damoncali
you really think there are 500m _active_ users? My BS detector goes off when I
hear that number. Unless they have a couple billion total users...

Edit: just to be clear, that's not a rhetorical question. Anyone know how they
define "active"?

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kgermino
An "active user," by their definition, is someone who has logged on in the
last 30 days.

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sunkan
How come everyone misses the fact that the app doesn't make the company. I
think color actually redefines "social". If these guys are successful in
executing their vision, their current valuation will seem a no-brainer. I
seriously don't understand all the negativity and backlash around their
launch.

This is coming from a guy that couldn't get their app to work. Every time I
try to take my picture, the app crashes. But I don't think that really
matters.

Isn't this the same community that proclaims, if you are not embarrassed with
your initial product release, then you haven't released it early enough. ?

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pclark
All of the startup mantras hacker news recites go out the window if you raise
lots of capital, apparently.

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plamb
And they should. There's a big difference between two guys renting a house and
living of their savings accounts pre-launch and 41 million dollars and 27
employees pre-launch.

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pclark
Why?

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plamb
Well for one, you shouldn't have issues like the app crashing when someone
tries to take a photo. 27 employees means you have plenty of QA and a testing
environment. Two guys in a house means you maybe have one iPhone version to
test on and no time to do thorough QA.

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pcolton
To be fair, the funding probably came sometime after the app development
started.

I tried it as well. I can see the novelty of it -- watch in real-time what
people are doing around you. It definitely has a voyeuristic aspect to it.

I think all that money could also be used to consolidate the market a bit --
do we really need 30+ photos apps?

PS - I'm working on a photo app. :-)

------
curt
Facebook valuation is only $20/user each year (profit).

Simple Valuation Breakdown: Take $80 billion and divide it by an EBITDA
multiple of 10 = $8 billion. Divide that by 400m users, for $20 profit/user
each year.

EDIT: EBITDA: Earning before income tax depreciation and amortization.

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calebmpeterson
i doubt Color will burst the bubble, but it sure seems to be a strong
indicator that there is a bubble of some sort...

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phlux
Assuming the premise of your title is correct, that the bubble bursts.. what
would this mean?

Funding dries up because all these ideas cant make money. Valuations plummet -
nobody hires and we have bust 2.0.

except it is different because this time around we have a glut of seasoned
developers that can build a hell of a lot of stuff.

So I cant see this burst being the same -- but I see a lot of stuff being
built for no / little funding.

