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"A $41M investment at this stage in the life cycle of a business is normally associated with either something that is technologically complex and thus capital i

"A $41M investment at this stage in the life cycle of a business is normally associated with either something that is technologically complex and thus capital intensive or that requires new processes to be designed from scratch." This is what struck me when I heard about the deal. Color is cobbling together existing technologies and not creating anything new. This deal pushed me into the "There is a Bubble" group. They had better have an ace up their sleeve.

nikcub 16y ago
don't focus on the features of the product - focus on the team. it might end up being something completely different (there is a word for that) from the perspective of 'can these guys spin a $40M investment into something that is worth more?', the answer is probably yes (probably enough to worth investing in) it isn't a bubble because this is still VC money, not crazy mom and pop shooting at the NASDAQ money. during the bubble this company would have already IPO'd and been worth $5B, and you parents would have called you up to ask about it.
- dclaysmith 16y ago
  From everything I read, Color has a fantastic team and the Techcrunch article is actually pretty positive on the idea. I'm sure that the company will succeed. But saying a company will likely succeed and deserves an investment does not mean VCs shouldn't be making rational valuations based on real business metrics. And as the OP remarked, this is probably funding at a $80m+ valuation for a company with no product (when funded), no revenue, and plenty of competition.
  - MatthewPhillips 16y ago
    Right, this puts their valuation above those of already very successful companies.
    - MatthewPhillips 16y ago
      Actually it puts their valuation around the same that Lala was purchased for!
- mkr-hn 16y ago
  Cuil had Googlers behind it. The people behind it can make a difference if the other fundamentals (market viability especially) are in place. Is there a $40m+ market for a group photo album app? This app is free, so they'll need a great monetization model even if the market is there.
  - nivertech 16y ago
    For $40M+ investment it should be $1B+ market. I guess they probably pitched something, like: "COLOR - the Facebook for Mobile"
  - nikcub 16y ago
    Cuil was trying to solve a problem that was already solved, and they were so arrogant in their media briefs you could just tell that they were on another planet Color, on the other hand, if they at least solve the problem of figuring out where somebody is I can see someone paying 200M+ for that (fb or google)
- toddmorey 16y ago
  The team behind it makes the work I've seen so far all the more surprising. Have you played with the app? It's horrible. It's really bad. It's not fun to use--it's confusing and frustrating. The UI is a nightmare. It's buggy. I know some of those things can be smoothed out over time, but it doesn't feel like those early apps you see that have tons of promise but a few rough edges. As an investor, I'd be worried.
  - nikcub 16y ago
    I'd probably never install the app, but then I don't even use a smartphone - but they have enough money to make this mistake 10 times over who knows, they might end up powering location for foursquare, facebook, and google etc. in 3 years time as the new GPS.

nikcub 16y ago

don't focus on the features of the product - focus on the team. it might end up being something completely different (there is a word for that) from the perspective of 'can these guys spin a $40M investment into something that is worth more?', the answer is probably yes (probably enough to worth investing in) it isn't a bubble because this is still VC money, not crazy mom and pop shooting at the NASDAQ money. during the bubble this company would have already IPO'd and been worth $5B, and you parents would have called you up to ask about it.

dclaysmith 16y ago
From everything I read, Color has a fantastic team and the Techcrunch article is actually pretty positive on the idea. I'm sure that the company will succeed. But saying a company will likely succeed and deserves an investment does not mean VCs shouldn't be making rational valuations based on real business metrics. And as the OP remarked, this is probably funding at a $80m+ valuation for a company with no product (when funded), no revenue, and plenty of competition.
- MatthewPhillips 16y ago
  Right, this puts their valuation above those of already very successful companies.
  - MatthewPhillips 16y ago
    Actually it puts their valuation around the same that Lala was purchased for!
mkr-hn 16y ago
Cuil had Googlers behind it. The people behind it can make a difference if the other fundamentals (market viability especially) are in place. Is there a $40m+ market for a group photo album app? This app is free, so they'll need a great monetization model even if the market is there.
- nivertech 16y ago
  For $40M+ investment it should be $1B+ market. I guess they probably pitched something, like: "COLOR - the Facebook for Mobile"
- nikcub 16y ago
  Cuil was trying to solve a problem that was already solved, and they were so arrogant in their media briefs you could just tell that they were on another planet Color, on the other hand, if they at least solve the problem of figuring out where somebody is I can see someone paying 200M+ for that (fb or google)
toddmorey 16y ago
The team behind it makes the work I've seen so far all the more surprising. Have you played with the app? It's horrible. It's really bad. It's not fun to use--it's confusing and frustrating. The UI is a nightmare. It's buggy. I know some of those things can be smoothed out over time, but it doesn't feel like those early apps you see that have tons of promise but a few rough edges. As an investor, I'd be worried.
- nikcub 16y ago
  I'd probably never install the app, but then I don't even use a smartphone - but they have enough money to make this mistake 10 times over who knows, they might end up powering location for foursquare, facebook, and google etc. in 3 years time as the new GPS.