

As a VC, how is a $41 million investment in Color justified? - pclark
http://www.quora.com/Color-Labs-startup/As-a-VC-how-is-a-41-million-investment-in-Color-an-unproven-social-media-application-justified/answer/Yishan-Wong

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pclark
I really enjoyed Yishans answer if for no other reason than it was _positive_
about Color.

I wish Hacker News members, who have zero vested interest in other people's
startups, would be a bit more optimistic when it comes to publishing comments.
Between Color, and various YC startup launches here - the place feels rather
mean spirited, frankly.

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nickbp
Not mean spirited; realistic.

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alexqgb
You don't need all the details to be unimpressed by creepy data mining
operations.

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il
This seems reasonable, except that the #1 rule of investing is that past
performance does not guarantee future results.

If the team is so great and VCs are investing in the team, then why is the
UI/usability of Color so bad?

I think the reason startup people are so down on Color is that they believe
that $41M distributed among many different startups would be better for the
tech ecosystem/community as a whole, resulting in more innovation and progress
than a single photo sharing app.

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alphaoverlord
> $41M distributed among many different startups would be better for the tech
> ecosystem/community as a whole

In what ways? How would that be true? It's a free market - you get what you
can get. You can argue fb doesn't deserve its valuation either, but there
doesn't seem to be same amount of disbelief and schadenfreude-seeking.

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FirstHopSystems
For the Love of GOD who cares about how much money Color raised. It was nice
to hear about, oh..the first 4 times here.

Deleting the huge rant I just typed up.

Anyone want to throw in ideas on why Color is such a hot topic? I might be a
little blind to it due to my attitude reading it on here so many times.

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geoffw8
Everyone whose on this "are we still talking about color" thing is starting to
get on my nerves. Theres still LOTS of mileage in it - more write ups, VC
opinions, yada yada.

Its how the world works. They just raised $41m, one of the largest pre-launch
rounds. Expect to hear about them.

Saying "are we still talking about color" doesn't make you cool. Nobody cares
if your "over it because your so hooked in to the tech scene".

If you don't want to read about it, don't click on the link.

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_delirium
If there's something insightful to say, sure. But the bubble/not-bubble,
talented-team/questionable-product, smart-VCs/dumb-VCs, can't-use-$41m/can-
use-$41m debates don't seem to be getting anywhere, as far as I've seen. Not
just that it's repetitive, but that _none_ of the discussions, even if they
were the first and only one you saw, has a lot of substance. They all seem to
be some combination of ridicule and "it's not worth ridiculing but maybe is
good" defensiveness, with both sides mostly based on speculation rather than
any solid facts.

Am I missing the insightful writeups where this case study can help me learn
something about either technology or the technology business? I click to the
HN discussion in hopes of finding such things!

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mweatherill
I see a lot of similarity between the Color discussions and anything written
about Fukushima; a small number of facts are being drawn together to produce
wide-reaching conclusions. It is a lot less interesting to say "we don't know
all the facts so lets just wait and see how this turns out". These days I find
it much harder to find people who are undecided about a topic - everything is
polarising.

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zaidf
Simple:

(1) spend 30M acquiring bunch of high-usage apps with lil revenue

(2) collect anon user data

(3) license / sell data to ad firms on ad exchanges and more

Most of HN has _no idea_ how crazy the ad exchange business is because they
are pretty tightly controlled and require high minimums to play. I wouldn't
know if I didn't have a brother working inside day to day.

Suffice to say, there is a _flourishing_ market where anon user data is bought
and sold for millions to improve ad targeting.

One great example is rapleaf. When they launched, I was like "meh, another
reputation management co." Turns out they are doing alright doing what I
describe here. Yet if you simply judged them when they launched or from their
consumer front they put up, you'd never know.

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alanfalcon
A good time to mention the NAI Opt-Out page:

<http://www.networkadvertising.org/managing/opt_out.asp>

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zaidf
On the topic of opting out, I personally _like_ that the ads have become a lot
more targeted in the past year or so.

Especially the re-targeting stuff...I'd much rather see ads for products I
already have some level of interest in than the days of random punch-the-
monkey and drugstore.com ads.

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dataminer
Sequoia invested in youtube and it turned out very well for them. Color is
more likely the next youtube instead of next facebook.

I haven't tried Color yet, but from what I have read it makes it dead easy to
share photos and form social groups. Remember the real breakthrough of youtube
was you click on a link and the video starts playing, it was and still is the
most hassle free way of watch videos, there were no codecs to download, no
heavy flash pages to load just fast and easy. People like easy and Color is
making it easy to share photos and form social groups.

About $41 million, yes that is high but now the company can go to work instead
of worrying about the next round of financing.

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kalvin
Slightly off topic, but if you're ever somehow lacking for great reading
material, just read yishan wong's other answers on quora. Lots of insight, not
just about startups, and often hilariously entertaining.

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chr15
I just submitted a story where you can see a video of Color in action:
<http://news.ycombinator.com/item?id=2376602>

The UX is better once you have a lot of people using it. I can see how it's
useful if you're at a concert, basketball game, or any other event.

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jayzee
TL;DR: Sequioa is awesome and invests after due deliberation. Color's next
release is going to fix UI issues.

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nickconfer
Can anyone name a situation where a company received record funding or major
pre-release hype and wasn't heavily criticized for it?

I can see why groups like KickStarter chose to have their funding stay silent
while they grew.

