Sources tell us there is turmoil at the executive levels of Color Labs. As you may know, the startup launched with a focus on photo-sharing but quickly became the poster child of Silicon Valley hype after landing more than $40 million in funding but failing to gain any real user traction. In recent months the company’s leadership has been in a state of flux, we’re told — and some are attributing the instability to Color’s charismatic but controversial founder Bill Nguyen.
As with any startup drama, there are many moving pieces here. But after weeks of discussions with multiple sources very close to the scene, here is the situation as we understand it:
Attempts to reach Nguyen while researching this story over the past few months proved unsuccessful, as a company spokesperson repeatedly maintained all was fine with Color. The spokesperson confirmed that Mallet, Chokshi, and Steffens were all promoted to take on more responsibility, but said that it was not because Nguyen has been absent — that it was part of a “natural progression” of their career roles.
Today, however, when we contacted Color with an alert that this story would be published, we were finally able to reach Bill Nguyen by phone to discuss what our sources told us. Nguyen, who called while on his way to board a plane to Maui, confirmed that he has been absent from day-to-day operations at Color for months — but initially, he stressed that it was a non-issue.
“I do this historically. I take off for a little while and I vacation. It’s nothing new or exciting,” he said. “The roles of founders and CEOs is to get everyone engaged and give opportunities to people. And when things haven’t worked out as expected, the best way for me to recharge is to go on sabbatical.”
Nguyen said that he did the same thing at Lala, the online music startup he founded back in 2006. Weeks after Nguyen handed over the CEO role to Geoff Ralston to go on sabbatical, Lala sold to Apple for a reported $80 million.
But when we pointed out that he formally stepped down from the CEO role at Lala before ceasing day-to-day duties there, he acknowledged that this was the case. He also admitted that his retention of the CEO title at Color while being MIA could be seen as troubling to both the board and to rank-and-file employees — and could be a factor in recent departures at the company.
“I feel bad about that. It’s tough, any time you start a company with crazy high expectations and you don’t deliver. I totally understand why some people would depart from the company in these circumstances,” he said.
Nguyen also acknowledged that not all of Color’s board members are pleased with him keeping the CEO title while in absentia. He said that that will probably be discussed more at Color’s next upcoming board meeting — which he won’t be attending in person. “I’m going to have to call in, because I’ll be in Maui.”
When asked about Color’s plans to pivot, Nguyen said that it is not in the works — though he thinks it should be. “I don’t think there is a pivot happening now at all, but if I were there we would pivot,” he said. “I would say we’re at an interesting juncture, and Color needs to decide how it wants to proceed.”
One thing has been uncontested by all the sources we’ve spoken with: Color still has a good amount of money in the bank. Despite the drama, Color’s large Series A raise means that despite its missteps, the company still has plenty of gas left in the tank and room to maneuver — with or without Nguyen at the helm.
Mr. Bill Nguyen is a co-founder of Color Labs, Inc. and serves as its Chief Executive Officer. Mr. Nguyen founded Seven Networks Inc. in May 2000 and served as its co-Chief Executive Officer until April 2005. Before founding SEVEN, Mr. Nguyen founded Onebox.com in 1999. He also co-founded La La Media Inc. in 2005. Apple acquired LaLa in December 2009. The service shut down in April 2010 with users getting credits on the apple itunes store. Prior to starting Onebox,...