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.
Russia's strongman president has many Americans convinced of his manipulative genius. He's really just a gambler who won big.
I. The Hack
The large, sunny room at Volgograd State University smelled like its contents: 45 college students, all but one of them male, hunched over keyboards, whispering and quietly clacking away among empty cans of Juicy energy drink. “It looks like they’re just picking at their screens, but the battle is intense,” Victor Minin said as we sat watching them.
Clustered in seven teams from universities across Russia, they were almost halfway into an eight-hour hacking competition, trying to solve forensic problems that ranged from identifying a computer virus’s origins to finding secret messages embedded in images. Minin was there to oversee the competition, called Capture the Flag, which had been put on by his organization, the Association of Chief Information Security Officers, or ARSIB in Russian. ARSIB runs Capture the Flag competitions at schools all over Russia, as well as massive, multiday hackathons in which one team defends its server as another team attacks it. In April, hundreds of young hackers participated in one of them.
Russian billionaire Yuri Milner says if the space rock 'Oumuamua is giving off radio signals, his team will be able to detect them—and they may get the results within days.
The email about “a most peculiar object” in the solar system arrived in Yuri Milner’s inbox last week.
Milner, the Russian billionaire behind Breakthrough Listen, a $100 million search for intelligent extraterrestrial life, had already heard about the peculiar object. ‘Oumuamua barreled into view in October, the first interstellar object seen in our solar system.
Astronomers around the world chased after the mysterious space rock with their telescopes, collecting as much data as they could as it sped away. Their observations revealed a truly unusual object with puzzling properties. Scientists have long predicted an interstellar visitor would someday coast into our corner of the universe, but not something like this.
Students don't seem to be getting much out of higher education.
I have been in school for more than 40 years. First preschool, kindergarten, elementary school, junior high, and high school. Then a bachelor’s degree at UC Berkeley, followed by a doctoral program at Princeton. The next step was what you could call my first “real” job—as an economics professor at George Mason University.
Thanks to tenure, I have a dream job for life. Personally, I have no reason to lash out at our system of higher education. Yet a lifetime of experience, plus a quarter century of reading and reflection, has convinced me that it is a big waste of time and money. When politicians vow to send more Americans to college, I can’t help gasping, “Why? You want us to waste even more?”
The depiction of uncomfortable romance in "Cat Person" seems to resonate with countless women.
Recent months make it seem like humanity has lost the instruction manual for its “procreate” function and has had to relearn it all from scratch. After scores of prominent men have been fired on sexual-assault allegations, confusion reigns about signals, how to read them, and how not to read into them. Some men are wondering if hugging women is still okay. Some male managers are inviting third parties into performance reviews in order to avoid being alone with women. One San Francisco design-firm director recently said holiday parties should be canceled, as The New York Times reported, “until it has been figured out how men and women should interact.”
Into this steps “Cat Person,” a New Yorker fiction story by Kristen Roupenian that explores how badly people can misread each other, but also how frightening and difficult sexual encounters can be for women, in particular. “It isn’t a story about rape or sexual harassment, but about the fine lines that get drawn in human interaction,” Deborah Treisman, The New Yorker’s fiction editor, told me.
David Bentley Hart’s text recaptures the awkward, multivoiced power of the original.
In the beginning was … well, what? A clap of the divine hands and a poetic shock wave? Or an itchy node of nothingness inconceivably scratching itself into somethingness? In the beginning was the Word, says the Gospel according to John—a lovely statement of the case, as it’s always seemed to me. A pre-temporal syllable swelling to utterance in the mouth of the universe, spoken once and heard forever: God’s power chord, if you like. For David Bentley Hart, however, whose mind-bending translation of the New Testament was published in October, the Word—as a word—does not suffice: He finds it to be “a curiously bland and impenetrable designation” for the heady concept expressed in the original Greek of the Gospels as Logos. The Chinese word Tao might get at it, Hart tells us, but English has nothing with quite the metaphysical flavor of Logos, the particular sense of a formative moral energy diffusing itself, without diminution, through space and time. So he throws up his hands and leaves it where it is: “In the origin there was the Logos …”
The authors of a new book argue that government regulations have been giving an unfair advantage to those already on top.
Why has inequality increased so much over the past 40 years? Common answers to that question cite changes in trade, technology, globalization, and education. Cheap imports from low-wage countries, in particular China, sapped domestic manufacturing. Companies offshored jobs, fired people, and hired robots. Demand for skilled workers far outstripped the demand for unskilled workers, depressing earnings for those without an advanced degree.
In their excellent, slim new book, Brink Lindsey and Steven Teles—the former the director of the Open Society Project at the libertarian think tank the Niskanen Center, the latter a political scientist at Johns Hopkins—point to an important and overlooked additional cause. InThe Captured Economy: How the Powerful Become Richer, Slow Down Growth, and Increase Inequality, they argue that it is not just that technology and offshoring have wiped away middle-income jobs, but that high-income individuals and big-profit businesses have rewritten the rules of the economy, “capturing” the regulatory system and using it to squeeze out their competition. The result is both greater inequality, and a more sclerotic economy.
As the Alabama Senate race enters its final days, Doug Jones is making an all out push—while his rival is nowhere to be seen.
MONTGOMERY, Ala.—The dramatic contrast between the two Senate campaigns in Alabama grew even more stark during the final weekend before Election Day.
Doug Jones, the Democratic candidate, is holding multiple events every day, taking questions from the press, and campaigning with other Democratic politicians. His opponent Roy Moore has all but disappeared. Dogged by controversy following allegations by nine women of sexual misconduct or abuse when they were teenagers, Moore has not appeared in public since last Tuesday, and isn’t scheduled to do so again before Monday. Reports suggest that he was in Philadelphia on Saturday watching the Army-Navy football game, and a Moore spokesperson told me that he attended a Christmas gathering with supporters and friends on Sunday evening—closed to the press.
“The U.S. is now the most unpredictable actor in the world today.”
As conflicts ignite and burn and flicker out around the world, U.S. officials assess the dangers they represent back home. Not all of these conflicts directly threaten American interests, which is why the Council on Foreign Relations conducts an annual survey to help U.S. leaders prioritize threats in the year ahead. For the past decade, this survey has focused on the risks posed to America by foreign actors. Now it’s reckoning with the risks America poses to the world—and to itself.
“The U.S. is now the most unpredictable actor in the world today, and that has caused profound unease,” said Paul Stares, the director of CFR’s Center for Preventive Action, which produces the annual survey. “You used to be able to pretty much put the U.S. to one side and hold it constant, and look at the world and consider where the biggest sources of unpredictability, insecurity are. Now you have to include the U.S. in that. … No one has high confidence how we [Americans] would react in any given situation, given how people assess this president.” This president might welcome the development. “I don’t want people to know exactly what I’m doing—or thinking,” Donald Trump wrote in 2015. “It keeps them off balance.”
A conversation about inheritance, philanthropy, and aging with the philosopher Martha Nussbaum and the law professor Saul Levmore
What is the right way to age? It’s a question that isn’t explored enough in American society, where, seemingly, people are expected to be forever young, until, suddenly, they are not. Reflecting this binary, any writing about a long life’s final decades tends toward extremes. On one hand, there are the accounts of heroic men and women who still put in more than 40 hours a week on the job in their late 60s and early 70s (a genre I like to call “retirement porn”). On the other, there are the articles warning about the dangers of not adapting a home for aging bodies, or the plague of financial scammers targeting lonely or cognitively challenged seniors.
That leaves out a vast middle, the space where many older people actually, you know, live their lives. Luckily, Martha Nussbaum, the renowned philosopher and ethicist at the University of Chicago, and Saul Levmore, the former dean of and a current professor at the university’s law school, decided to explore that middle. The result? The recently published Aging Thoughtfully: Conversations About Retirement, Romance, Wrinkles, & Regret.
One person is in custody after Monday’s explosion. Three people suffered minor injuries.
Updated at 11:07 a.m. ET
A man wearing an improvised explosive device caused an explosion Monday in a New York subway tunnel near Times Square, authorities said. The state’s governor told New Yorkers what they already know: attacks like this one are inevitable in a city that is a permanent target for anti-American terrorists.
“This is New York,” Andrew Cuomo, the New York state governor, said Monday. “The reality is that we are a target by many who would like to make a statement against democracy, against freedom. We have the Statue of Liberty in our harbor, and that makes us an international target. We understand that.”
The blast occurred at about 7:20 a.m. in the passageway connecting the busy subways stations at Times Square and Port Authority Bus Terminal, officials said at a news conference. James O’Neill, the city’s police commissioner, identified the attacker as Akayed Ullah, 27, a resident of Brooklyn. Other news reports, citing unnamed police sources, said Ullah is an immigrant from Bangladesh who has lived in the U.S. for seven years. Ullah sustained serious injuries in the explosion, while three others in the vicinity of the blast had minor injuries, authorities said.