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.
She lived with us for 56 years. She raised me and my siblings without pay. I was 11, a typical American kid, before I realized who she was.
The ashes filled a black plastic box about the size of a toaster. It weighed three and a half pounds. I put it in a canvas tote bag and packed it in my suitcase this past July for the transpacific flight to Manila. From there I would travel by car to a rural village. When I arrived, I would hand over all that was left of the woman who had spent 56 years as a slave in my family’s household.
The condition has long been considered untreatable. Experts can spot it in a child as young as 3 or 4. But a new clinical approach offers hope.
This is a good day, Samantha tells me: 10 on a scale of 10. We’re sitting in a conference room at the San Marcos Treatment Center, just south of Austin, Texas, a space that has witnessed countless difficult conversations between troubled children, their worried parents, and clinical therapists. But today promises unalloyed joy. Samantha’s mother is visiting from Idaho, as she does every six weeks, which means lunch off campus and an excursion to Target. The girl needs supplies: new jeans, yoga pants, nail polish.
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At 11, Samantha is just over 5 feet tall and has wavy black hair and a steady gaze. She flashes a smile when I ask about her favorite subject (history), and grimaces when I ask about her least favorite (math). She seems poised and cheerful, a normal preteen. But when we steer into uncomfortable territory—the events that led her to this juvenile-treatment facility nearly 2,000 miles from her family—Samantha hesitates and looks down at her hands. “I wanted the whole world to myself,” she says. “So I made a whole entire book about how to hurt people.”
The office was, until a few decades ago, the last stronghold of fashion formality. Silicon Valley changed that.
Americans began the 20th century in bustles and bowler hats and ended it in velour sweatsuits and flannel shirts—the most radical shift in dress standards in human history. At the center of this sartorial revolution was business casual, a genre of dress that broke the last bastion of formality—office attire—to redefine the American wardrobe.
Born in Silicon Valley in the early 1980s, business casual consists of khaki pants, sensible shoes, and button-down collared shirts. By the time it was mainstream, in the 1990s, it flummoxed HR managers and employees alike. “Welcome to the confusing world of business casual,” declared a fashion writer for the Chicago Tribune in 1995. With time and some coaching, people caught on. Today, though, the term “business casual” is nearly obsolete for describing the clothing of a workforce that includes many who work from home in yoga pants, put on a clean T-shirt for a Skype meeting, and don’t always go into the office.
The American president has surprised everyone with his enthusiasm for the Israeli-Palestinian peace process. But he might not understand what he's getting into.
JERUSALEM—Is Donald Trump the last best hope for the peace process?
As a candidate, Trump was an iconoclast in many ways, but by and large he hewed to the positions on Israel typical of Republican presidential candidates. Trump promised to move the United States Embassy from Tel Aviv to Jerusalem and railed against the Iran deal.
Trump’s promises reassured the Israeli right and the pro-Israel American right. He earned rave reviews from figures like the Jewish Home leader Naftali Bennett, who declared after the election that “Trump's victory is a tremendous opportunity for Israel to immediately announce its intention to renege on the idea of establishing Palestine in the heart of the country—a direct blow to our security and the justice of our cause.”
President Trump’s former national security adviser won’t comply with the Intelligence Committee’s demand for Russia-related documents, his lawyers said Monday.
Michael Flynn, President Trump’s former national security adviser, told the Senate Intelligence Committee on Monday he won’t comply with their May 10 subpoena of materials related to the Russia investigation, invoking his Fifth Amendment right against self-incrimination.
“The context in which the committee has called for General Flynn’s testimonial production of documents make clear that he has more than a reasonable apprehension that any testimony he provides could be used against him,” Flynn’s lawyers wrote in a letter to the committee. “Multiple Members of Congress have demanded that he be investigated and even prosecuted.”
Flynn’s response comes less than a monthafter the committee issued a formal demand for any documents “relevant to the committee’s investigation into Russian interference with the 2016 election.” The committee noted it had asked him to voluntarily turn over the documents in April, but his legal counsel declined.
Isabel Caliva and her husband, Frank, had already “kicked the can down the road.” The can, in their case, was the kid conversation; the road was Caliva’s fertile years. Frank had always said he wanted lots of kids. Caliva, who was in her early 30s, thought maybe one or two would be nice, but she was mostly undecided. They had a nice life, with plenty of free time that allowed for trips to Portugal, Paris, and Hawaii.
“I wasn’t feeling the pull the same way my friends were describing,” she told me recently. “I thought, maybe this isn’t gonna be the thing for me. Maybe it’s just going to be the two of us.”
At times, she wondered if her lack of baby fever should be cause for concern. She took her worries to the Internet, where she came across a post on the Rumpus’ “Dear Sugar” advice column titled, “The Ghost Ship that Didn’t Carry Us.” The letter was from a 41-year-old man who was also on the fence about kids: “Things like quiet, free time, spontaneous travel, pockets of non-obligation,” he wrote. “I really value them.”
“Having a slave gave me grave doubts about what kind of people we were, what kind of place we came from,” Alex Tizon wrote in his Atlantic essay “My Family’s Slave.”
A thousand objections can be leveled against that piece, and in the few days since it was published, those objections have materialized from all quarters. It’s a powerful story, and its flaws and omissions have their own eloquence. For me, the most important failure is that Tizon seems to attribute Lola’s abuse entirely to another culture—specifically, to a system of servitude in the Philippines—as though he believes, This doesn’t happen in America. But that system is not only in America, it’s everywhere. It ensnares not only immigrants, but everyone.
The president’s tax-and-spend plan isn’t just a reversal of his campaign promises. It’s also a deeply unpopular blueprint for the country.
President Donald Trump’s first major budget proposal comes out on Tuesday, but many of the details are already public. The budget would reverse several of Trump’s campaign promises—like his pledge to preserve Medicaid and Social Security—by dismantling welfare for the poor and sick, while ensuring that rich Americans keep more of their income.
At this point, the proposal is just that—a proposal, and Congressional Republicans, some of whom have balked at the president’s blueprint, hold the power of the purse. But if followed, the plan would reportedly cut anti-poverty programs by $1.7 trillion over the next 10 years in an attempt to balance the budget, according to the The Washington Post and Axios. In addition to $800 billion in cuts to Medicaid—which comes directly from the House’s Obamacare replacement—the budget would also let states use “work requirements” to limit eligibility and spending on programs like SNAP (the Supplemental Nutrition Assistance Program, previously known as food stamps), CHIP (the Children’s Health Insurance Program), and Social Security Disability Insurance. There is little question that these policies would raise the number of uninsured Americans (the Congressional Budget Office’s estimates suggest by more than 20 million), expose more households to medical bankruptcy, and push more families into poverty.