top | item 2362159

Sequoia gives photo-sharing startup more money than they gave Google

193 points| parth16 | 15 years ago |techcrunch.com

175 comments

order
[+] flyosity|15 years ago|reply
I just tried out the iPhone app and I'm pretty disappointed.

Color seems like one of those ideas that would be pretty rad if 1 million people already used it. Because no one has the app yet, if you fire it up it's totally blank. You take a picture of yourself, post it, then the rest of the UI is whitespace. There's nothing to look at or do. It's possibly the worst first-run user experience I've ever seen.

I wonder if the Color engineers were always using the app together and always seeing each other's photos. If that's the case the UI was always full of stuff to look at, and they probably demoed it to journalists like this as well. Did they ever actually see the app as an empty slate like everyone will see it the first time they use it? My guess is: no.

[+] rokhayakebe|15 years ago|reply
When you mix location + user generated content, you need to deploy city by city.
[+] olivercameron|15 years ago|reply
Right on, a ton of these new social apps have this same problem. I remember Path 1.0 was a similar experience.
[+] desigooner|15 years ago|reply
I feel the same. Unfortunately, after spending a few minutes with such an app and not having a positive impression, it's pretty rare that I would revisit the app again later in the future. Most of the people I know behave the same way: if it catches their attention, it stays on the phone or else the app's gone.

The best launch scenario for them would have been SXSW .. instead, all the group messaging apps got the limelight and these guys seem to have missed that boat ..

Also, what's the privacy aspect of this app?! I could think of a few concerns.. e.g. someone's photos popping up when the user doesn't intend to be seen at a particular place ..

[+] melvinram|15 years ago|reply
Yea, similar to initial Google Wave experience.
[+] dereg|15 years ago|reply
I have a question for those who know better than me: What's the critical mass for a social network to be self-sustaining?

Even if 1 million people used Color, I could those users concentrated in a few cities. Not only does the app require a vibrant, heavily active user-base that's willing to sacrifice their privacy, but it seems only useful in areas where the population density is relatively high. A 100 foot radius is an extremely limited area.

Furthermore, what's the point of seeing other people's pictures? I find very little "social" value in the realm of location sharing. I, for one, would not approach anybody that I see in my stream. Even in Twitter, I use location based services little to never. What am I missing out on?

Someone please tell me that I am wrong, but the success of Color requires far too many assumptions and is riding on a trivial purpose. I don't see how it deserves $41 million in funding... Color would work as a novel Facebook feature but, on its own, seems pointless.

[+] csel|15 years ago|reply
I personally think they just solved a huge problem. Oh wait..what problem were they solving again?
[+] ehsanul|15 years ago|reply
It would seem pretty short-sighted for the developers to not have realized this though (though I wouldn't say the same for venture capitalists and media). I'm guessing they must have figured this out, but just don't have a solution for it yet.

For my own startup-wannabe, I had to pivot because of the same problem: the app would only be useful if millions of people were using it, the way it was originally conceived.

[+] rivo|15 years ago|reply
Maybe it would help to increase the proximity radius dynamically so you always get results. It probably would have made your first-run user experience better, even if the photos had been taken farther away (same city, same state, or same country).
[+] JMiao|15 years ago|reply
color's cold start issue reminds me of the zune's wi-fi sharing feature, even before it got neutered by the recording industry.
[+] kalvin|15 years ago|reply
Title doesn't do it justice. The photo-sharing part isn't what's novel. They seem to be building a social graph automatically weighted on physical proximity+frequency, using smartphone sensors (the most important one of which happens to be a camera). That's cool, and potentially game-changing.

"All of your contacts are presented in a list of thumbnails ordered by how strong your connection is to that user. Whenever Color detects that you’re physically near another user (in other words, that you’re hanging out), your bond on the app gets a little stronger. So when you fire up the app and jump to your list of contacts, you’ll probably see your close friends and family members listed first. But if you don’t see a friend for a long time, they’ll gradually flow down the list, and eventually their photos will fade from color to black-and-white.

...If you fired up Color in that restaurant example from earlier, you’d only be able to see photos that had been taken by friends and strangers within 100 feet of that restaurant. That is, unless you jump to your social connections. Tap on your best friend’s profile photo, and you’ll then be able to see all of the photos that have recently been taken within 100 feet of them. In other words, Color is trying to give you a way to see everything that’s going on around you, and everything that’s going on around the people you care about."

"Color is also making use of every phone sensor it can access. The application was demoed to me in the basement of Color’s office — where there was no cell signal or GPS reception. But the app still managed to work normally, automatically placing the people who were sitting around me in the same group. It does this using a variety of tricks: it uses the camera to check for lighting conditions, and even uses the phone’s microphone to ‘listen’ to the ambient surroundings. If two phones are capturing similar audio, then they’re probably close to each other."

[+] jkincaid|15 years ago|reply
Yeah, based on what they said they have some much more ambitious plans than just photo swapping. Unfortunately (but unsurprisingly) they were vague about what those plans entail — they made some references to heavy data crunching, but I couldn't really get a straight answer as to exactly what they were crunching or what it would be used for.
[+] geoffw8|15 years ago|reply
How, why and when would I want to do this?

I don't understand it from neither a sharer, or a browsers perspective.

[+] waterlesscloud|15 years ago|reply
If there's no cell signal, how do the phones know they're capturing similar audio?
[+] bdclimber14|15 years ago|reply
Based on this description, I envision the Dark Knight situation where the world is seen through phones.
[+] Splines|15 years ago|reply
> you’ll then be able to see all of the photos that have recently been taken within 100 feet of them.

Why are they restricting it to time? Given such a focused physical proximity, seeing what people were doing where you're standing a year ago might be interesting.

[+] zyfo|15 years ago|reply
Maybe I'm missing something here, but how is "Let all the people you know find out all about your current surroundings" a selling point?
[+] nostrademons|15 years ago|reply
It's mobile, it's social, and it's local! They managed to hit all the buzzwords in one startup!
[+] crux|15 years ago|reply
'Say you walk into a restaurant with twenty people in it. You sit down at a table with four friends, and start chatting. Then one of your friends pulls out their phone, fires up Color, and takes a snapshot of you and your buddies.

That photo is now public to anyone within around 100 feet of the place it was taken. So if anyone else in the restaurant fires up Color, they’ll see the photograph listed in a stream alongside other photos that have recently been taken in the vicinity.'

Correct me if I'm wrong, but when it comes to photo sharing, aren't the people in your immediate vicinity at the time you take a photo the people who are going to be the least interested in getting that photo shared to them?

[+] dstein|15 years ago|reply

  "But how exactly is Color going to make “wheelbarrows of
  cash”... the company is still very early on, but it 
  eventually plans to offer businesses a self-serve platform
  for running deals and ads
$41 Million for a photo sharing app and this is the best they came up with? You gotta be kidding me.
[+] Joakal|15 years ago|reply
I'm guessing when the user takes a picture of yourself near a logo/brand, it automatically offer deals/ads based on the fancy proximity guessing thing. The company seems to be trying to build up eyeballs at this stage.

The high price tag mean they have several patents + trusting investors + solid plan, etc. It's similar to Facebook (Zuckerberg has patents of his own I believe).

[+] phlux|15 years ago|reply
Here is some tinfoil for you...

Assuming they have a back-door API - this could be a freaking BOON for intelligence gathering arms that are seeking to know the surrounds of anti establishment types.

Further - wait until you apply spatial modeling capabilities (what was that MS tech demo called?) where you can start building 3d navigable models of spaces that all the data collected in that 100' radius allows.

Dont think the military is doing CRAZY things with optical intel:

"The system can also be used for general night vision; it can follow bats five miles away in darkness."

http://www.wired.com/science/discoveries/news/2007/02/72632

the military now has autonomous robotic helicopters that can visually track bullets in flight.

http://www.wired.com/dangerroom/2009/02/gigapixel-flyin/

Now they just need the general public to be a part of the larger sensor intel fabric.

[+] jfager|15 years ago|reply
The underlying technology sounds like it was inspired by The Dark Knight - sensors in cell phones streaming data back to a central server where it can all be processed together into a cohesive view of what's going on in the world.

The photo-sharing aspect just sounds like a hook to get consumers to actually put it on their phones. I'd imagine that the bigger play is trying understanding where people go, who they go there with, when they go, all of that. Facebook has the data to reconstruct that information after the fact, when people come home and upload their pictures, but this looks like an attempt to see it unfold in real time.

Advertisers are already getting used to having this kind of information on the web, with tracking cookies, twitter, and real-time ad auctions giving them immediate, constant feedback from and control over people's online experience. The company that figures out how to get a similar datastream out of and targeted advertisements into meatspace is going to make mad money; if these guys have a legitimate shot at doing it, $41M probably isn't so crazy.

On the other hand, just downloaded the app, and the first cut is kind of crap.

[+] Cherian_Abraham|15 years ago|reply
Disclaimer: Three of us are building a pet project that has some similarities with Color. One big difference - all user generated content is private by default.

That out of the way, we are certainly envious about the 100-200 million dollar evaluation they got on day one. With about 4k spent so far, in our case and with three of us chipping in any extra time we have (me - any extra time I have outside of lurking here), we are still a couple of months away from a MVP that will make us cringe ever so slightly when we see how far we will have to go. Till then, no real sleep, and a lot of heartburn. Still, its good to see Color validating some of what we do, but in the end, we both will have to prove there is a market. We however can afford to fail early and not give any VC's any heartburn, just our own families.

One thing is for sure, we do not plan to build sonar capabilities. We dont have the knowhow and I am not sure that will be the make or break for us anyway.

We also dont have the same pedigree, and therefore its clear that VC's will not be snapping at our heels (But we go back six years, all three of us). We are ok with that, but heck..41 million is a lot of money.

As the weeks peel away, I hope to share here on HN where we stand with the product and hopefully even line up some kind souls here who will be willing to beta test for us in return for some good karma. We cant afford to pay (please refer back to the 4k burn total).

We however have some ideas on how we plan on monetizing. We plan on finding out as early as we can, whether our ideas coincide with real needs from local businesses.

Right now, I am shamelessly stopping people on the street, as they veer away, ignore, stare, and sometimes stop and tell me what they need and what they want. I do this as behind the scenes we toil away on building something that in the end we can be proud of.

In all fairness, right now, they have a far more capable app, employing 9 times our current strength and vastly more capital and brain power. In the end, may the best viable product and company win.

[+] arfrank|15 years ago|reply
A couple of things stick out from this numbers wise:

* 7 founders (~14% split evenly, unlikely though)

* 41M raised

* Staff of 27 (obviously get some equity)

Some valuation math:

(Dilution) Pre-Money Post-Money (Founder dilution from ~14.28%)

  15% 232.3M 273.3M  12.1%

  20% 164M   205M    11.4%

  25% 123M   164M    10.7%

  30% 95.6M  136.6M  9.99%

  40% 61.5M  102.5M  8.57%

  50% 41M    82M     7.14%
I realize the percentages are essentially a wild guess, but I feel its a good data point to add in.
[+] dools|15 years ago|reply
Hey Color dudes, if you're here - presumably those photos are being stored on a server, can I browse a timeline of photos taken in my area? Like if I'm in some place on a Saturday and want to see what it was like last Saturday, or what it's like on a Friday night?

Think of a bar conversation, or a restaurant or something "It's quiet now but check it out on a Friday night! It goes mental!".

[+] nostromo|15 years ago|reply
I'm curious how a proximity-based social network is going to keep from placing me closer to my upstairs neighbor than, say, my brother on the other coast.
[+] geoffw8|15 years ago|reply
I'm curious as to why Facebook won't just add a "photos your friends have taken around this place" feature and make these guys a distant memory
[+] jkincaid|15 years ago|reply
I'm pretty sure that Color also takes interaction within the application into account (i.e. if you frequently comment on a user's photos, view their stream, etc., then it also boosts your social connection).
[+] stoney|15 years ago|reply
I agree, it's an interesting problem.

Thinking about it maybe there's a kind of bathtub curve of photos that I'm interested in

- I'm highly interested in photos around me and of close friends

- I don't really care about photos of acquaintances and people I went to school with but haven't seen in years, etc,

-I'm highly interested in photos of people I am close to but that live far away.

[+] hammock|15 years ago|reply
Yeah, or the idiot in the cube next to me that I spend 10 hours a day with.
[+] hammock|15 years ago|reply
Creepiest part- "it uses the camera to check for lighting conditions, and even uses the phone’s microphone to ‘listen’ to the ambient surroundings."

The auto-social network based on proximity is awesome, though. I can't wait for this and the creep factor will be gone in five years anyway since we are all moving to a more open society.

[+] jonmc12|15 years ago|reply
$1m for product, $3m for marketing, $37m for curation of a constant stream of chatroullette-esque pornographic images?
[+] danssig|15 years ago|reply
This is a good point. If I'm sitting in a very densely populated area the odds that some couple within 100' are exhibitionists must be pretty high.
[+] VladRussian|15 years ago|reply
>Nguyen has visions of fundamentally changing some aspects of social interaction and local discovery with the app, which he considers part of the so-called Post-PC movement.

webvan anybody?

[+] olivercameron|15 years ago|reply
Sounds technologically impressive, I'm just wondering if a dynamic friend list is really an advantage over a static list. The last thing I want to be doing when hanging out with friends is to be on my mobile phone checking out what they've posted to Color. I'd rather, you know, interact with them in real life. Maybe I missed a vital point of it, though.
[+] jarin|15 years ago|reply
The best part about a dynamic friend list: instead of friend requesting a cute girl on Facebook, you need to take lots of photos of her and be near her location all the time.
[+] kongqiu|15 years ago|reply
But you can look at photos of them! On your phone! Sorted magically!!!
[+] geoffw8|15 years ago|reply
I'm gonna just go ahead and say this, does anyone else think this is a bit silly? $41m.

There's no getting away from the fact this is just an app that shows you photos taken near you, by strangers.

I just don't get it. I might be wrong, in 12 months I might be kicking myself, I just cant imagine it.

[+] ChuckMcM|15 years ago|reply
Absolutely, but that is what makes the speculating fun. You have to ask, what possible story could you spin around what they have that justifies $41M pre-revenue. Even assuming a healthy multiple of 20, and investor exit of $250M you're talking about projected earning of $12.5M with a gross margin of say 60% that's like $21M/yr in revenue. And I'm assuming an ABC round (which is to say the would expect to not do another round prior to some liquidity 'event').

But they clearly have a good story and their investors are happy. So silly or not, its the path they've chosen. It reminded me of this blog posting I ran across:

http://www.gamesbrief.com/2011/02/50-questions-why-too-much-...

[+] melvinmt|15 years ago|reply
I don't care what it does, $41 million at pre-launch for a mobile app is ridiculous.

I sure believe they've hired a staff of 29 very talented people. But even if you give each of them a salary of more than 1 million dollars it would still take a year to burn that money.

[+] nir|15 years ago|reply
If you're trying to evaluate based on how useful it is, how cool, potential income etc you're missing the point.

The goal is to flip this to the next sucker. A cool domain name, a celeb team, an app that's bound to attract media hype (look for "The Color.com Revolution" coming from Tehran University in 2012) - a year or two from now, provided the bubble doesn't burst, Sequoia can unload this on Google or Facebook and make a tidy profit.

[+] avichal|15 years ago|reply
Any "there isn't a bubble" believers want to comment on this one...?
[+] greendestiny|15 years ago|reply
I've previously been in the camp that there isn't a bubble. This seems like its a valuation of 1 or 2 hundred million for a company that hasn't launched yet. It's very hard to see how this deal could make sense in a traditional way.

Don't get me wrong I think this sounds like an excellent idea that could turn out to be an excellent company. It's just such a large amount of money to raise that it kind of raises the question of what game the VCs and/or founders are really playing.

It seems like at this point there might be a possibility of VCs planning on Facebook and Twitter going public and either being acquired at an inflated price with all that new capitalization or going public themselves in the wake.

[+] sks|15 years ago|reply
This is the deal which firmly cements my belief that there is a big big bubble.

Anyone with the technical skills and idea to launch a tech startup should collect the cash now. Act fast, at this rate the foolish money wont last long.

[+] joshhart|15 years ago|reply
41 million??? No part of me believed there was another bubble. About-face!

I'm considering building a clone on android and GPLing it. Who's in?

[+] newhouseb|15 years ago|reply
The article makes it seem as if Color hasn't launched yet but it actually has (presumably today). I downloaded it and am pretty stunned at how confusing of a UI $41 million can buy you.