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.
The internet’s favorite fact-checkers are caught in a messy dispute.
On Monday, the editorial staff of Snopes.com wrote a short plea for help. The post said that the site needed money to fund its operations because another company that Snopes had contracted with “continues to essentially hold the Snopes.com web site hostage.”
“Our legal team is fighting hard for us, but, having been cut off from all revenue, we are facing the prospect of having no financial means to continue operating the site and paying our staff (not to mention covering our legal fees) in the meanwhile,” the note continued.
It was a shocking message from a website that’s been around for more than 20 years—and that’s become a vital part of internet infrastructure in the #fakenews era. The site’s readers have responded. Already, more than $92,000 has been donated to a GoFundMe with a goal of $500,000.
There were numerous attempts to establish contact with the campaign and the transition team.
In trying to fend off suspicion of collusion with the Kremlin, Donald Trump Jr. and Jared Kushner have recently provided the public with two very interesting documents. Shoving responsibility for any outreach onto the Russian side, the two men have given us with a partial account of Russian methods in approaching the Trump camp in 2016.
If the accounts are true—and, given that their accounts have changed in the past, these latest accounts could change too—then, taken together, the Trump Jr. emails and Kushner’s statement show a Russian side that is experimenting with ways of getting the Trump team’s attention. They show a side that really is, as one former Obama administration official told me, “throwing spaghetti at the wall and seeing what would stick.”
As Donald Trump’s troubles deepen, he keeps trying to shift attention to his old rival—but finds it no longer works like it used to.
Donald Trump’s brand-new communications director got a glimpse of the challenge he faces this weekend. As Anthony Scaramucci toured the Sunday shows, promising a new era of better relations and positive vibes, his boss was firing off his most active string of Twitter complaints in some time, taking shots at Democrats, Republicans, the press, James Comey, Robert Mueller, and—for the second time in less than a week—his own attorney general:
So why aren't the Committees and investigators, and of course our beleaguered A.G., looking into Crooked Hillarys crimes & Russia relations?
The president’s choice of words to describe Attorney General Jeff Sessions is bizarre, though the condescending mockery matches the tone he often uses for adversaries. To paraphrase Trump, somebody’s doing the beleaguering, and that person is Trump himself, who railed at Sessions during an interview with The New York Times last week, saying he wished he hadn’t appointed him, and that Sessions’s decision to recuse himself from the Russia investigation was unfair to Trump.
Terminating the special counsel would show recklessness, imply corruption, and irrevocably damage the country.
Last week, President Donald Trump fueled speculation that he might work to oust Robert Mueller, the former FBI director appointed to probe Russian interference in the 2016 presidential election. Trump could do so today, or tomorrow, or three months from now; the news could be announced in a televised speech, through a spokesperson, or even in a late night tweet sent on an impulse after his advisers have gone to bed.
If Trump fires Robert Mueller, few will be surprised. But if that happens, as the Department of Justice is thrown into chaos, as the American public sees its clearly expressed support for the special counsel disregarded, as the vital inquiry into the integrity of American elections stalls, as protesters take to the streets in a show of outrage at the affront to the rule of law, as the 2018 midterms morph into a referendum on the administration, and as American democracy reels into unknown territory, the House of Representatives should immediately impeach the president.
Thirty-one-year-old Ezra Cohen-Watnick holds the intelligence portfolio on the National Security Council—but almost everything about him is a mystery.
Just 24 days into his tenure as Donald Trump’s national-security adviser, Michael Flynn was forced to resign, having reportedly misled Vice President Mike Pence about his contacts with Russian officials. When Flynn departed, the men and women he’d appointed to the National Security Council grew nervous about their own jobs, and with good reason. The new national-security adviser, General H.R. McMaster, promptly began clearing out Flynn’s people, among them Dave Cattler, the deputy assistant to the president for regional affairs, Adam Lovinger, a strategic affairs analyst on loan from the Pentagon, and KT McFarland, Flynn’s deputy, who was eased out with the ambassadorship to Singapore. Even Steve Bannon, among the most powerful people in the White House, was removed from the meetings of the NSC Principal’s Committee, where he had been installed early on in the administration.
Three Atlantic staffers discuss “Stormborn,” the second episode of the seventh season.
Every week for the seventh season of Game of Thrones, three Atlantic staffers will discuss new episodes of the HBO drama. Because no screeners were made available to critics in advance this year, we'll be posting our thoughts in installments.
Half a century ago, a senator battling a brain tumor took to the Senate floor, and secured his legacy.
None of us can choose how we are remembered. Most of us are not remembered at all. Senator John McCain knows that he will be remembered. He faces a choice about how his remarkable career will be noted in its autumnal phase.
McCain will of course be remembered most of all for his service, and sacrifice and bravery, as a naval aviator and then as prisoner of war in Vietnam. He should also be known for his efforts in his early days in politics to heal divisions within the United States over the Vietnam war, and then between Vietnam and the United States.
In the world of politics he is known and will probably be remembered as a steadfast personal friend, despite disagreements of party. Michael Lewis’s remarkable tale of McCain’s loyalty to the disabled and mostly forgotten one-time liberal champion Morris Udall is, well, an unforgettable example. More than most politicians, McCain has had dramatic moments of principle-above-party high-road stands, as when he told a Republican questioner that she should stop suggesting that his then-opponent for the presidency, Barack Obama, was “an Arab.” As Colin Powell later pointed out, McCain’s response fell an inch short of perfection, in that he answered the questioner by saying that Obama wasn’t “an Arab—he’s a decent family man.” Still, in real time and near the end of a bitter campaign it was brave, right, to his credit—and in character.
Many point to unromantic 20-somethings and women’s entry into the workforce, but an overlooked factor is the trouble young men have in finding steady, well-paid jobs.
TOKYO—Japan’s population is shrinking. For the first time since the government started keeping track more than a century ago, there were fewer than 1 million births last year, as the country’s population fell by more than 300,000 people. The blame has long been put on Japan’s young people, who are accused of not having enough sex, and on women, who, the narrative goes, put their careers before thoughts of getting married and having a family.
But there’s another, simpler explanation for the country’s low birth rate, one that has implications for the U.S.: Japan’s birth rate may be falling because there are fewer good opportunities for young people, and especially men, in the country’s economy. In a country where men are still widely expected to be breadwinners and support families, a lack of good jobs may be creating a class of men who don’t marry and have children because they—and their potential partners—know they can’t afford to.
Biology textbooks tell us that lichens are alliances between two organisms—a fungus and an alga. They are wrong.
In 1995, if you had told Toby Spribille that he’d eventually overthrow a scientific idea that’s been the stuff of textbooks for 150 years, he would have laughed at you. Back then, his life seemed constrained to a very different path. He was raised in a Montana trailer park, and home-schooled by what he now describes as a “fundamentalist cult.” At a young age, he fell in love with science, but had no way of feeding that love. He longed to break away from his roots and get a proper education.
At 19, he got a job at a local forestry service. Within a few years, he had earned enough to leave home. His meager savings and non-existent grades meant that no American university would take him, so Spribille looked to Europe.
Sometimes when I observe someone doing their job, I can't help but think, "Man, that must be hard." Maybe it's a retail worker dutifully leading a customer to the linens aisle for the umpteenth time. Maybe it's a cab driver who's shuttling passengers around at 5 a.m. It's always hard to say who truly has it harder; perhaps that retail worker and that cab driver have themselves come away from other interactions thinking the same thing I did.
Now, some psychiatrists have spoken on which jobs are actually more of a grind, at least from the standpoint of mental health. A study published last month in the journal Social Psychiatry and Psychiatric Epistemology suggests that some jobs have much higher rates of depression than others.