At least the domain name is worth some dollars. I actually quite like the concept - makes group photo sharing fun & easy. But worth $41m? Not yet
I wonder how much they paid for the @color Twitter account.
41,000,006 reasons why I think we're in a bubble
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Re: 41,000,006 reasons why I think we're in a bubble
#12One of the arguments I've heard that state that things are different this time around goes like this: it is far less capital intensive to do a startup now rather than in the late 90s because of open source software stacks and cloud computing providers. I agree with this statement but it means that the average software startup doesn't need a lot of cash to develop their product. Apart from ads and perhaps domain names…
Developers are not cheap.
Re: 41,000,006 reasons why I think we're in a bubble
#13One of the arguments I've heard that state that things are different this time around goes like this: it is far less capital intensive to do a startup now rather than in the late 90s because of open source software stacks and cloud computing providers. I agree with this statement but it means that the average software startup doesn't need a lot of cash to develop their product. Apart from ads and perhaps domain names…
Advertising. People are already bemoaning the network effect in the lack of content on color - I think maybe the plan is to buy their way into users.
Re: 41,000,006 reasons why I think we're in a bubble
#14What's the difference between proof of it being a bubble and these guys just making a ridiculous investment based on hype?
Re: 41,000,006 reasons why I think we're in a bubble
#15One of the arguments I've heard that state that things are different this time around goes like this: it is far less capital intensive to do a startup now rather than in the late 90s because of open source software stacks and cloud computing providers. I agree with this statement but it means that the average software startup doesn't need a lot of cash to develop their product. Apart from ads and perhaps domain names…
Just because there might be a bubble doesn't mean that all startups will autofail. However, if I ran a startup with ads as my main source of revenue, I would be worried as advertising budgets are the first thing to be axed in a crisis.
For entrepreneurs crashes are the best times to innovate and launch new ventures because while everyone else is angsting about cutbacks and surviving just another day, the entrepreneur can launch lean businesses and products AND usually get great deals on people, equipment, office space, services, etc.
Re: 41,000,006 reasons why I think we're in a bubble
#16I think the only thing I'd generally agree on is that "in general it is agreed upon" are weasel words of the highest order.
Re: 41,000,006 reasons why I think we're in a bubble
#17We might be in a bubble. But that bubble will continue to inflate as long as people are screaming Bubble! Bubble!! The danger moment appears when all those predictions appear false and everyone start to believe, maybe this time, for some reason, exponential growth will continue forever. The moment when everyone shut up and start to join the bandwagon is when the bubble bursts. <-- That's from my experience.
Your last sentence is very astute, and resonates with me personally. I thought valuations were insane in the late 90s but ultimately gave in. I think that was less than 6 months before the crash!
Regarding exponential growth. We need to think carefully what kind of efficiency improvements can SUSTAIN exponential growth. The adoption of the Internet to the mainstream was a major event. I guess people might be betting that mobile/tablet is another one. I thought this was already priced in about 2 years ago. I can't think of what has changed in fundamentals that justifies the current situation (except for inflation perhaps).
Re: 41,000,006 reasons why I think we're in a bubble
#18Hmph. If nothing else, posts like this are terribly offensive to the entrepreneurs that dedicate their lives to products like Color. Did anyone consider that maybe Sequoia, who have invested in companies that make up over 10% of the NASDAQ know what they are doing? Companies like Color, AdKeeper and Flipboard have "crazy" valuations based on the founders having ridiculous resumes. They have all created billions of do…
41 million for growth for an app before it launches?
Re: 41,000,006 reasons why I think we're in a bubble
#19Hmph. If nothing else, posts like this are terribly offensive to the entrepreneurs that dedicate their lives to products like Color. Did anyone consider that maybe Sequoia, who have invested in companies that make up over 10% of the NASDAQ know what they are doing? Companies like Color, AdKeeper and Flipboard have "crazy" valuations based on the founders having ridiculous resumes. They have all created billions of do…
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Re: 41,000,006 reasons why I think we're in a bubble
#20"A $41M investment at this stage in the life cycle of a business is normally associated with either something that is technologically complex and thus capital intensive or that requires new processes to be designed from scratch." This is what struck me when I heard about the deal. Color is cobbling together existing technologies and not creating anything new. This deal pushed me into the "There is a Bubble" group. Th…
don't focus on the features of the product - focus on the team. it might end up being something completely different (there is a word for that) from the perspective of 'can these guys spin a $40M investment into something that is worth more?', the answer is probably yes (probably enough to worth investing in) it isn't a bubble because this is still VC money, not crazy mom and pop shooting at the NASDAQ money. during…
From everything I read, Color has a fantastic team and the Techcrunch article is actually pretty positive on the idea. I'm sure that the company will succeed.
But saying a company will likely succeed and deserves an investment does not mean VCs shouldn't be making rational valuations based on real business metrics. And as the OP remarked, this is probably funding at a $80m+ valuation for a company with no product (when funded), no revenue, and plenty of competition.