Color raised 82 times more money than Instagram. Why did it lose so badly?
It was supposed to be a Facebook killer. Mobile, social, and photos? Those are the kind of trends that drive cool billion-dollar valuations. In other words, the kind of trends that get venture capitalists to hand over blank checks. Okay, not exactly blank. But close enough. For the startup Color, it was $41 million, a record-setting pre-launch figure -- and from blue blood firms Sequoia and Bain Capital, no less. It was a perfect storm of hype.
And then they actually released their app.
There's a tension inherent to most startups. You're usually building something that doesn't already exist, and that people don't already know they want -- and then you have to iterate on what they tell you they want. To translate that into business jargon, you have to PIVOT. It's a messy, exciting process -- and a messy, exciting process that's best done in the dark. It's hard enough to make something that some people like. It's even harder to iterate and make something that some more people like. Just look at Instagram.
Before it became the go-to destination for rich kids to post photos of themselves, Instagram was not Instagram -- it was Burbn. What was Burbn? Good question. It was a location-based service kind of like Foursquare and Twitter. But there was a small problem. People didn't want it. But people did want to share photos -- that part of Burbn was taking off. So founder Kevin Systrom PIVOTED and Instagram was born.
Of course, it's not as if Systrom got a billion dollars from Facebook the next day. It just seems that way. Instagram had plenty of competitors, even ones that let you add filters to photos -- remember Hipstamatic? -- that it had to beat out. And it did, by taking what its competitors did and making it a little simpler and a lot more social. It helped that Systrom (and later co-founder Mike Krieger) started in stealth mode, figured out which parts of their intuitions were correct, built and tested their new app in private, and then launched. It was the right product, in the right market, at the right time. Which brings us to Color.
It's hard to do much in private when you raise $41 million before doing anything else. The good news is that kind of raise buys you gobs of attention -- and startups certainly need attention. The bad news is that that kind of raise buys you gobs of attention -- maybe before you're ready for it. Color definitely wasn't ready for it. When they actually did launch, nobody could figure out how to use their app, or even why they'd want to. (It had a two-star rating on iTunes). Rather than connecting you with people you knew or people you thought were interesting -- like Instagram -- Color connected you with people around you. It's an interesting idea -- the kind of interesting idea that might get you venture funding! -- but not the kind of interesting idea that people wanted. At least not now. That wouldn't have been such a problem if its user interface wasn't quite so indecipherable. It was. Users came, they saw, and they didn't come back. Color was stuck in what Y Combinator's Paul Graham calls the Trough of Sorrow -- and it was especially sorrowful because so many people had already written them off.
So Color pivoted. Well, not quite. There's a very fine line between "pivoting" and "flailing". The former is when you take the part of your business that is working, and focus on that. Think Instagram. The latter is when nothing about your business is working, and you frantically grasp for something new. That was Color. Less than three months after its launch, Color decided it might scrap the whole photo-sharing thing. Or it might not. In either case, CEO and founder Bill Nguyen -- who had just fired his co-founder -- told the New York Times he had a bold, new, grandiose plan:
Mr. Nguyen outlined an ambitious plan to compete with Apple, Google and Facebook by tying together group messaging, recommendations and local search, all while making money through advertising. He plans to build applications that will use data from Facebook to create temporary social networks, say at a conference or sporting event, to help users meet people who grew up in the same town or like the same band.
"It's literally going to turn your Facebook network from 500 people to 750 million people," Mr. Nguyen said.
Photos might not even be a part of Color in the future....
The only company Nguyen apparently didn't want to take on was the one that had just crushed him in mobile photo-sharing -- Instagram. I'll give you one guess how well this plan that substituted buzzwords for details turned out. Within six months, Color was pivoting again, this time into mobile video-sharing. In other words, Color went from trying to beat Instagram to trying to become the Instagram of video. It was quite a fall for Nguyen, who a year earlier had compared Instagram to "mice nuts." No, not like peanuts.
Still, obituaries for Color are a bit premature. But only just. They can certainly afford to flail pivot. Sure, they've burned through piles of cash -- Nguyen dropped $425,000 on the domain names color.com and colour.com -- but they still have piles of cash because they started out with such a huge pile of cash. That's how math works. Thanks to this looooong runway, Color has managed to reach a deal with Verizon over its video-sharing. Maybe Color will still end up making it. Or maybe not. This video explaining what Color is (now) and how to use it has a very sad 22 views as of pixel time. According to AppData, around 110,000 people use it every day. That's better than where they were back in March, but it's about two orders of magnitude below the big boys.
It turned out the hype was justified ... for Instagram. It was a Facebook killer, potentially. It took Facebook's killer app -- photo-sharing -- and created a new social graph around it from the post-PC web. In other words, big bucks. Facebook thought it enough of a threat to make a Godfather offer of $1 billion in stock and cash. (Which is admittedly worth quite a bit less now). Instagram was the perfect product in the perfect market at the perfect time. Color was ... not. It had bad execution, worse marketing, and a conceit that was at best ahead of its time. Its massive pre-launch raise didn't create those problems, but it did make them more likely. Color felt like it had to move quickly -- beta testing, what's that? -- and justify its big valuation with big talk. This was a company that Google tried to buy for $200 million before they even had a product! These massive expectations made its launch much higher stakes than if it been in stealth mode.
Although it's not as if the little-startup-that-could in our story was some kind of underdog. Instagram raised half a million in funding themselves, including from top firm Andreessen Horowitz. But staying in stealth mode let them do a lot of the dirty work of figuring out what people want without the inevitable missteps that occur getting dissected under the spotlight. That's not to say that Color would have succeeded with less money, but that having more money can make you think you can skip steps -- and you usually can't.
A magnitude 7.8 earthquake struck Nepal early on Saturday, centered 10 miles below the surface, less than 50 miles from the capital of Kathmandu. At least 1,100 are already reported to have been killed by the quake and subsequent avalanches triggered in the Himalayas. Historic buildings and temples were destroyed, leaving massive piles of debris in streets as rescue workers and neighbors work to find and help those still trapped beneath rubble. Below are images from the region of the immediate aftermath of one of the most powerful earthquakes to strike Nepal in decades. (Editor's note, some of the images are graphic in nature.)
In her new book No One Understands You and What To Do About It, Heidi Grant Halvorson tells readers a story about her friend, Tim. When Tim started a new job as a manager, one of his top priorities was communicating to his team that he valued each member’s input. So at team meetings, as each member spoke up about whatever project they were working on, Tim made sure he put on his “active-listening face” to signal that he cared about what each person was saying.
But after meeting with him a few times, Tim’s team got a very different message from the one he intended to send. “After a few weeks of meetings,” Halvorson explains, “one team member finally summoned up the courage to ask him the question that had been on everyone’s mind.” That question was: “Tim, are you angry with us right now?” When Tim explained that he wasn’t at all angry—that he was just putting on his “active-listening face”—his colleague gently explained that his active-listening face looked a lot like his angry face.
Four hours after learning about Saturday's devastating earthquake in Nepal, I received a Facebook notification I had never seen before: Sonia, a journalist friend based in northern India, was "marked safe." An hour later, the same notification about a different friend popped up. Then another. Soon, several of my friends wrote that they, too, had learned via this strange new notification that their friends in Nepal were okay.
A few hours later, the mystery was solved. On Saturday afternoon, Facebook CEO Mark Zuckerberg announced on his timeline that the notifications came from Safety Check, a service the company launched last fall. "When disasters happen, people need to know their loved ones are safe," he wrote, "It's moments like this that being able to connect really matters."
Today was the latest installment of the never-ending Clinton scandal saga, but it won’t be the last. Yet in some ways, the specifics are a distraction. The sale of access was designed into the post-2001 Clinton family finances from the start. Probably nobody will ever prove that this quid led to that quo … but there’s about a quarter-billion-dollar of quid heaped in plain sight and an equally impressive pile of quo, and it’s all been visible for years to anyone who cared to notice. As Jonathan Chait, who is no right-wing noise-machine operator, complained: “The Clintons have been disorganized and greedy.”
“All of this amounts to diddly-squat,” pronounced long-time Clinton associate James Carville when news broke that Hillary Clinton had erased huge numbers of emails. That may not be true: If any of the conduct in question proves illegal, destroying relevant records may also have run afoul of the law.
After more than a year of rumors and speculation, Bruce Jenner publicly came out as transgender with four simple words: “I am a woman.”
“My brain is much more female than male,” he explained to Diane Sawyer, who conducted a prime-time interview with Jenner on ABC Friday night. (Jenner indicated he prefers to be addressed with male pronouns at this time.) During the two-hour program, Jenner discussed his personal struggle with gender dysphoria and personal identity, how they shaped his past and current relationships and marriages, and how he finally told his family about his gender identity.
During the interview, Sawyer made a conspicuous point of discussing broadly unfamiliar ideas about gender and sexuality to its audience. It didn't always go smoothly; her questions occasionally came off as awkward and tone-deaf. But she showed no lack of empathy.
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
Our patient—we’ll call him W.B.—is a 56-year-old father of three who, until last year, had always been healthy. He had worked his entire life, in jobs ranging from automotive repair to sales, taking great pride in providing for his family, even though doing so had recently meant combining three part-time positions. All of that ended in February 2014, when he was diagnosed with amyotrophic lateral sclerosis, or ALS, commonly known as Lou Gehrig’s disease. A neurodegenerative disease characterized by progressive muscle weakness, ALS leads to the loss of all voluntary movement, difficulty breathing, and, in the end, death.
W.B.’s life was turned upside down by the diagnosis. But once the initial shock passed, he began researching his condition intensively. He learned that he was unlikely to survive five years, and that in the meantime his quality of life would diminish dramatically. With limited options, many patients retreat. But, quite bravely, W.B. had other ideas. After much consideration, he decided that if he was going to die, he would like to try to save another person’s life in the process, even if that person was a stranger. And so last May he approached the University of Wisconsin’s transplant program, where we are surgeons, as a prospective organ donor.
Freddie Gray's death on April 19 leaves many unanswered questions. But it is clear that when Gray was arrested in West Baltimore on the morning of April 12, he was struggling to walk. By the time he arrived at the police station a half hour later, he was unable to breathe or talk, suffering from wounds that would kill him.*
Gray died Sunday from spinal injuries. Baltimore authorities say they're investigating how the 25-year-old was hurt—a somewhat perverse notion, given that it was while he was in police custody, and hidden from public view, that he apparently suffered injury. How it happened remains unknown. It's even difficult to understand why officers arrested Gray in the first place. But with protestors taking to the streets of Baltimore since Gray's death on Sunday, the incident falls into a line of highly publicized, fatal encounters between black men and the police. Meanwhile, on Tuesday, a reserve sheriff's deputy in Tulsa, Oklahoma, pleaded not guilty to a second-degree manslaughter charge in the death of a man he shot. The deputy says the shooting happened while he was trying to tase the man. Black men dying at the hands of the police is of course nothing new, but the nation is now paying attention and getting outraged.
CHELSEA, Ma.—The woman Barry Berman saw sitting in the dining room of the nursing home was not his mother.
Or, at least, she was his mother, but didn’t look anything like her. His mother was vivacious, or she had been until she was felled by a massive stroke and then pneumonia, so he’d moved her into a nursing home so she could recuperate. He knew he could trust the nursing home, since he ran it, and knew it was lauded for the efficiency with which it served residents. But when he went to look for his mother a day or two after he moved her in, he barely recognized her.
“I’ll never forget the feeling as long as I live,” he told me. “I said, ‘Oh my God, there’s my mother, this old woman, in a wheelchair, lifeless. Look what my own nursing home did to my own mother in a matter of days.”
When healthcare is at its best, hospitals are four-star hotels, and nurses, personal butlers at the ready—at least, that’s how many hospitals seem to interpret a government mandate.
When Department of Health and Human Services administrators decided to base 30 percent of hospitals’ Medicare reimbursement on patient satisfaction survey scores, they likely figured that transparency and accountability would improve healthcare. The Centers for Medicare and Medicaid Services (CMS) officials wrote, rather reasonably, “Delivery of high-quality, patient-centered care requires us to carefully consider the patient’s experience in the hospital inpatient setting.” They probably had no idea that their methods could end up indirectly harming patients.