

More trouble for Color: shareholders and board vote to wind down company - waterlesscloud
http://venturebeat.com/2012/10/17/more-trouble-for-color-shareholders-and-board-vote-to-wind-down-company/

======
jrmg
How does:

 _A source within the company tells us that the company’s shareholders and
board last week voted to shut the company down._

Become, by the end of the article:

 _Color as a company still has plenty of cash in the bank, which means we’re
likely to see another product from it before long._

?

~~~
jpdoctor
_Color as a company still has plenty of cash in the bank, which means we’re
likely to see another product from it before long._

Sounds like cluelessness on the part of the reporter: You don't have a board
meeting involving the words "shut down" and then decide it was really "pivot"
after the fact.

The money will first go to any bondholders/accounts-payable, then the
remainder back to the investors.

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antr
I still remember when Google allegedly offered $200m for this business-less
startup. I know I'm playing Monday morning QB, but to reject such offer simply
demonstrates lack of economic judgement - both at the management and investor
level (and a lucky strike for Google).

We tend to complain plenty about Wall Street's greed but this represents no
different behaviour.

~~~
TillE
I think Google (or Facebook) would have done well with their technology and
people. Color is a great feature, to paraphrase Steve Jobs. Though maybe not a
$200m feature.

~~~
rikf
You can develop a-lot of features and hire some (a-lot of) pretty fucking good
people for $200m

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hammock
As troubled as Color is, it represents the future direction of location data.
No longer will location data be just for its own sake- apps that answer "Where
am I?" "Where are you?" "Where's lunch?" It's evolving to be something bigger.
The future is integrating it into new uses, to answer questions we haven't
even asked yet. For some examples, see:

News.me and Instapaper - Sync your articles to your phone as you leave your
house, so that when you're underground on the train, you have all your content
right there

Now - Combs instagram for clustered activity in your area, and then notifies
you of what's going on (i.e. movie in the park that people are enjoying)

Dark Sky - Alerts you when it is going to rain in your precise location, based
on radar

Square - Automatically logs you in as soon as you arrive at the coffee shop or
wherever

What it boils down to is location is automating various parts of user
interface. Making your life better in the process. (this post a tldr version
of [http://adage.com/article/special-report-digital-
conference-s...](http://adage.com/article/special-report-digital-conference-
san-francisco-2012/location-technology-change-publishing-pay-content/237443/))

~~~
MatthewPhillips
> The future is integrating it into new uses, to answer questions we haven't
> even asked yet.

Actually, I think that's the exact wrong lesson to take from this. That's what
Color did: look for something that hasn't been done before and did that. It
was a solution to a problem that doesn't exist: meeting strangers. People
don't want to meet strangers, unless they're looking to hook up. That's why we
construct amazing home entertainment systems; so we can avoid being around
strangers. Ditto for Highlight and Airtime.

The takeaway from Color is not to go searching for the next big thing, but
rather solve a problem that you yourself have (warning, you are probably not a
normal person so don't spend too much time solving the problem before
releasing something).

~~~
eta_carinae
> Actually, I think that's the exact wrong lesson to take from this. That's
> what Color did: look for something that hasn't been done before and did
> that. It was a solution to a problem that doesn't exist: meeting strangers

Color has never been about meeting strangers. Never.

v1 of the application allowed people who happen to be at the same place at the
same time to share photos (still a great idea in my opinion, imagine concerts
or random birthday parties where you hardly know anyone but everybody is
taking pictures).

v2 was about live broadcasting (interesting tech but uninteresting product).

~~~
MatthewPhillips
Your description of v1 sounds exactly like meeting strangers; am I missing
something?

Yeah, v2 was about a different non-problem (normal people broadcasting their
everyday lives).

~~~
jfernandez
v1 To me sounds more like a way to facilitate sharing. I suppose this could
lead to fostering relationships between strangers but for example I would get
immense benefit from just having additional/better photos for an event that
another person decided to share.

------
tomasien
Color was coming out right as I was starting my first company. I was just
becoming aware of Valley culture, and I found the Color story really, really
confusing. As other things have started to click and I've moved from "not
knowing anything" to "being consulted professionally on these matters" the
whole story of Color remains pretty confusing to me.

~~~
tomasien
I don't mean to use hindsight to say I knew they were going to fail, just that
I'm just as confused as to how this happens as I was the first day I got
interested in startups.

------
cletus
This represents a rare (AFAICR) failure for Sequoia. I don't mean to be the
naysayer but even at the time, for me, Color had disaster written all over it.
All flash, no substance.

I wonder how much of that $40+ million is left and will be returned to
investors. Anyone know how many employees Color has (had?)?

It's been said that the military is always busy planning for yesterday's war.
The lessons of the past often don't reflect the change in circumstances. I
think the tech sector suffers from a version of this, particularly for VCs.
Facebook is big. Instagram sold big. Lots of people are chasing social. But
IMHO social is largely yesterday's war.

Take one of my current bugbears: social search. Many view it as the Next Big
Thing. Social is seen as a key future driver to recommendations and the like.
IMHO this is completely overhyped. This is something that's been much-
discussed already but a month or two ago I had an interesting conversation
that I think shed some light on the problem.

Let's say Alice is friends with Bob. Bob likes a particular movie. We as
programmers and entrepreneurs see an opportunity to use technology to solve a
"problem" here: namely, how to allow Bob to express that information in such a
way as to expose it to Alice, who it is argued, may well be interested in
that.

The problem here is that the view of the "problem" here is backwards. We see
social interactions as an inefficient way of disseminating information but in
most cases in the real world, it's the opposite: that movie recommendation is
simply a way of enabling and facilitating a social interaction. In other
words, the movie recommendation is a means to an end not an end in and of
itself. Too many social startups (IMHO) view the social interactions as a
means to an end when in fact it is the end.

Anyway, my condolences in particular to the employees of Color, who I have no
doubt worked hard over the last year or so. Luckily we're in a market where
you should easily be able to move on to bigger and better things.

~~~
eta_carinae
> Color had disaster written all over it.

Hindsight is 20/20, it's easy to criticize now, but look at it from the
investors' perspective:

\- A CEO who not only sold his latest startup to Apple but who built about
eight companies in the past twelve years, three that he sold and three that
went public.

\- A co founder team made from engineers that came from Google and Apple

... and you have a very solid foundation for a startup with much higher
success odds than any other.

~~~
heyitsnick
It's not just hindsight; a lot of people, commentators here and elsewhere,
were bemused by the entire Color story. A ridiculous amount of money for a
product that didn't exist, had no market, likely had niche interest at best,
and had no clear business strategy.

It did have disaster written all of it, and a lot of people called them on it
at the time.

As just one example, a quick google first turned up, but i read mountains of
commentary like this: <http://news.ycombinator.com/item?id=2655652>

edit:the parent thread is better to read. this was after shit started hitting
the fan, but i can't turn up earlier convos atm
<http://news.ycombinator.com/item?id=2655592>

~~~
MatthewPhillips
I remember reading those threads and you're right. The positive spin was built
around

1) That it was an interesting idea.

or

2) That it was a talented team which justified the funding.

or

3) That being a "fat" start-up they had plenty of chances to get it right.

I don't remember many (any?) people saying it was a good idea that would
succeed on its own merits.

~~~
cube13
Re: 1

It was an "interesting idea" in that most people really didn't know what the
heck they were doing, or what problem they were trying to solve.

All anyone really knew was that they got a boatload of money, and spent a lot
of money to get color.com.

------
duiker101
I wasn't expecting it.....that it took this long.

~~~
Pirate-of-SV
Same here. Maybe they should have been making something people would use
instead of playing around with their ball pit and foosball table in their
downtown Palo Alto office.

------
protomyth
I think Color shows one of the problems faced when people think about location
and geo-locking of data. Color (V1 - no idea about V2) didn't bring people
together or let distant people experience something that was happening to
their friends, it created a pool of photos at a geo-locked location among
friends with you and strangers.

Facebook works because it brings people together. Color only worked in places
where dense numbers were expected. Targeting things that only work in a urban
setting seems to be leaving out a lot of people including friends who just
aren't there.

~~~
bduerst
>brings people together

Facebook, and instagram, worked because they fed into the "braggart" mentality
that has seized social media.

By allowing users to post doctored photos to their friends, you've tapped into
their motivation to have better social standing in their "tribe". Few people
care what complete strangers think about them.

------
parfe
Does this mean Verizon will allow me to uninstall Color? They bought their way
onto my phone and I never even opened the app. You won't be missed.

------
Irishsteve
I really liked the first colour, its just no one else used it meh. Tough luck
for the guys hope everything works out as best as possible.

~~~
tomasien
I LOVED the first Color, if it had gotten any adoption I think it would have
been awesome. Unfortunately (or perhaps fortunately) that's not how the world
works, and it forces us to think beyond "hey wouldn't it be cool if everyone
did THIS"

------
timmclean
See also:

[http://techcrunch.com/2012/10/17/color-says-not-shutting-
dow...](http://techcrunch.com/2012/10/17/color-says-not-shutting-down/)

<https://news.ycombinator.com/item?id=4665928>

------
aneth4
How is it possible that Color has 120k daily active users. And certain that
doesn't mean "no one is using the app."

Something is wrong here, either with facebook's numbers or this conclusion.
That's not a small number.

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rheide
It 'only' has 440.000 active users? I'd be quite happy with a failure like
that.

~~~
mibbitier
Would you still be happy if you'd spent millions getting those 440k users?

For $41m investment, you could pay 410,000 people $100 to become a user.

------
Kilimanjaro
Color was (and still is) a great idea.

Giving them $40M was not. Right there you killed the greatest force to do the
undoable.

Motivation.

~~~
tatsuke95
>Giving them $40M was not. Right there you killed the greatest force to do the
undoable.

If motivation and investment capital are negatively correlated, then the
Valley has bigger problems than I thought.

~~~
Kilimanjaro
> If motivation and investment capital are negatively correlated

At early stages, yes.

PG has it right, small investment enough to keep motivation high = food.
Deliver and get another round = toys. Grow your user base and get another
valuation = perks. Then you are ready to sit on the big table, with your
balls, your morale and your thick skin.

If you give it all at once in the beginning, you lose motivation, morale, and
your balls too.

Early money is the machete that will castrate you and turn you into a digital
eunuch.

------
nicholassmith
I wonder if even the employees are surprised, I thought they'd already folded
up given how quiet it's been from them.

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bane
This isn't trouble; this is the end.

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vijayr
This is somewhat similar to Cuil.

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bane
relevant <http://news.ycombinator.com/item?id=4586946>

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vegas
hooray!

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cpeterso
Pop!

