9 ms·

More trouble for Color: shareholders and board vote to wind down company

72 points by waterlesscloud 14y ago

duiker101 14y ago
I wasn't expecting it.....that it took this long.
- Pirate-of-SV 14y ago
  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.
antr 14y ago
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.
- arkitaip 14y ago
  The danger of raising so much money - $41+ M - is that you risk being hold hostage by your investors.
  - ojbyrne 14y ago
    This seems backwards. If you had invested significant sweat equity and then raised $41 million then perhaps so. But in this case it's more like you took your investors hostage and live in constant fear that they will escape.
- TillE 14y ago
  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 14y ago
    You can develop a-lot of features and hire some (a-lot of) pretty fucking good people for $200m
  - waterlesscloud 14y ago
    There's something in the idea of ad hoc social networks. Someone will find some gold there eventually.
- deleted 14y ago
  [deleted]
- MatthewPhillips 14y ago
  Google also, allegedly, offered GroupOn 6 billion.
cpeterso 14y ago
Pop!
nicholassmith 14y ago
I wonder if even the employees are surprised, I thought they'd already folded up given how quiet it's been from them.
hammock 14y ago
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-san-francisco-2012/location-technology-change-publishing-pay-content/237443/ http://adage.com/article/special-report-digital-conference-s...)
- danso 14y ago
  > (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 How is that location data? The sync operation is the same whether you're at home or at work.
  - evan_ 14y ago
    It knows you're leaving a location, that's how.
    - danso 14y ago
      ...no it doesn't. Instapaper, AFAIK, syncs as soon as you open the app. It can't wait sync based on your relative movement from home (or the office) because it doesn't know when you will actually leave wifi/network range.
      - 14y ago
tomasien 14y ago
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 14y ago
  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 14y ago
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 14y ago
  > 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.
rheide 14y ago
It 'only' has 440.000 active users? I'd be quite happy with a failure like that.
- brk 14y ago
  Given the amount of funding it required to get that many users, and the lack of a clear business model, I think that their active user count is about as relative as where they leased their copier from.
- mibbitier 14y ago
  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.
- topbanana 14y ago
  Even if each one lost you money?
- desigooner 14y ago
  I wonder how many of those 440,000 "Active" users were a result of their partnership with Verizon to install Color on a bunch of their phones. Also, does "active" mean # of installs in this case?
jrmg 14y ago
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. ?
- devindra 14y ago
  The company as it is may get shut down, but with the leftover cash it could easily rebrand under another name and a new product.
- jpdoctor 14y ago
  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.
parfe 14y ago
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.
protomyth 14y ago
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 14y ago
  >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.
aneth4 14y ago
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.
Irishsteve 14y ago
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 14y ago
  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"
Kilimanjaro 14y ago
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 14y ago
  >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 14y ago
    > 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.
bane 14y ago
This isn't trouble; this is the end.
bane 14y ago
relevant http://news.ycombinator.com/item?id=4586946 http://news.ycombinator.com/item?id=4586946
vijayr 14y ago
This is somewhat similar to Cuil.
timmclean 14y ago
See also: http://techcrunch.com/2012/10/17/color-says-not-shutting-down/ http://techcrunch.com/2012/10/17/color-says-not-shutting-dow... https://news.ycombinator.com/item?id=4665928 https://news.ycombinator.com/item?id=4665928
vegas 14y ago
hooray!

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

Pirate-of-SV 14y ago
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.

antr 14y ago

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.

arkitaip 14y ago
The danger of raising so much money - $41+ M - is that you risk being hold hostage by your investors.
- ojbyrne 14y ago
  This seems backwards. If you had invested significant sweat equity and then raised $41 million then perhaps so. But in this case it's more like you took your investors hostage and live in constant fear that they will escape.
TillE 14y ago
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 14y ago
  You can develop a-lot of features and hire some (a-lot of) pretty fucking good people for $200m
- waterlesscloud 14y ago
  There's something in the idea of ad hoc social networks. Someone will find some gold there eventually.
deleted 14y ago
[deleted]
MatthewPhillips 14y ago
Google also, allegedly, offered GroupOn 6 billion.

cpeterso 14y ago

Pop!

nicholassmith 14y ago

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

hammock 14y ago

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-san-francisco-2012/location-technology-change-publishing-pay-content/237443/ http://adage.com/article/special-report-digital-conference-s...)

danso 14y ago
> (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 How is that location data? The sync operation is the same whether you're at home or at work.
- evan_ 14y ago
  It knows you're leaving a location, that's how.
  - danso 14y ago
    ...no it doesn't. Instapaper, AFAIK, syncs as soon as you open the app. It can't wait sync based on your relative movement from home (or the office) because it doesn't know when you will actually leave wifi/network range.
    - 14y ago

tomasien 14y ago

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 14y ago
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 14y ago

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 14y ago
> 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.

rheide 14y ago

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

brk 14y ago
Given the amount of funding it required to get that many users, and the lack of a clear business model, I think that their active user count is about as relative as where they leased their copier from.
mibbitier 14y ago
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.
topbanana 14y ago
Even if each one lost you money?
desigooner 14y ago
I wonder how many of those 440,000 "Active" users were a result of their partnership with Verizon to install Color on a bunch of their phones. Also, does "active" mean # of installs in this case?

jrmg 14y ago

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. ?

devindra 14y ago
The company as it is may get shut down, but with the leftover cash it could easily rebrand under another name and a new product.
jpdoctor 14y ago
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.

parfe 14y ago

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.

protomyth 14y ago

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 14y ago
>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.

aneth4 14y ago

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.

Irishsteve 14y ago

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 14y ago
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"

Kilimanjaro 14y ago

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 14y ago
>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 14y ago
  > 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.

bane 14y ago

This isn't trouble; this is the end.

bane 14y ago

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

vijayr 14y ago

This is somewhat similar to Cuil.

timmclean 14y ago

See also: http://techcrunch.com/2012/10/17/color-says-not-shutting-down/ http://techcrunch.com/2012/10/17/color-says-not-shutting-dow... https://news.ycombinator.com/item?id=4665928 https://news.ycombinator.com/item?id=4665928

vegas 14y ago

hooray!