Color Me Badd

Come inside, take off your coat
I’ll make you feel at home
Now let’s pour a glass of wine
‘Cause now we’re all alone.

The opening lines of Color Me Badd’s seminal “I Wanna Sex You Up” sort of perfectly encapsulates Color — the company/photo-sharing app, not the band. After one of the most-hyped launches in recent memory, it was supposed to be the app that changed proximity-based sharing. Instead, it was an app used to share a lot of drinks, often with yourself or one other person.

Unfortunately, also like the song, it was all foreplay. No sex. And now even Color is admitting that.

In an interview with The New York Times over the weekend, Color founder Bill Nguyen essentially admits defeat — at least with regard to their eponymous first app. This follows our story from last week that co-founder Peter Pham had left the company. While we had heard conflicting stories about the exit, Nguyen doesn’t beat around the bush, telling NYT that Pham was fired.

Whether Pham was a fall guy or not doesn’t really matter. What does matter is that Color has to figure out what the hell they’re doing now. NYT suggests they know:

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.

If you thought the initial Color idea was crazy, this must sound absolutely insane. Talk about setting a high bar! Color will apparently release such an app later this summer. The original photo-sharing idea? That has likely been totally scrapped.

But the truth is that I’m not sure that a lot of people thought the original Color idea was all that crazy — they just ran head-first into a poor initial experience. And that was compounded by the almost comically absurd $41 million pre-launch funding round.

Fundamentally, there’s still an interesting concept there. Using the location element baked into all of our smartphones to automatically create implicit networks is something that we’re going to keep seeing startups working on. Others, like Yobongo, are already working in this space as well.

I’m still not convinced that if Color had simply launched a couple weeks earlier, at SXSW, it wouldn’t have been a hit (for that week, at least). Certainly, it would have been the perfect environment to showcase the impressive technology being utilized behind the scenes. Instead, the app ran into the problem where early-adopters were often trying it out with no one around them.

It often looked like ghost town. And because of that, that’s exactly what it became.

Imagine for a second if Foursquare hadn’t launched at SXSW a few years ago. The early-adopters would have booted it up for the first time and not seen any friends checking in around them and would have wondered what the hell the app was good for? Foursquare has since expanded the product to add a lot more value. But remember that at first, there weren’t deals or recommendations — there was just the check-in (and yes, the badges and game element related to it).

Further, while this isn’t a popular sentiment, I actually quite like Color app itself. I completely agree that the initial version had some major UI/UX issues, but the more refined version is actually pretty slick. It’s well-made. It’s fast. It’s not like these guys are a bunch of jackasses who took $41 million and built nothing. So part of me is sad that it’s already time to die.

At the same time, there’s no denying that the $41 million was jaw-dropping. But I also thought the company was being unfairly pre-judged because of that. As Nguyen tells the NYT, they took that much money because they could. He’s had success in the past when he’s had a lot of capital to work with. Had the company raised the $14 million they originally intended to, people would have buzzed, but we would not have seen the same level of backlash.

I’m just not sure how you can hold that against the entrepreneurs. An insane amount of pre-launch funding is on the investors. For whatever reason, Sequoia wanted to put in $25 million by themselves. Maybe Color shouldn’t have accepted all of it, but again, Nguyen has had success doing just that in the past. Kids don’t turn down candy. It just doesn’t happen.

So now we move into the really interesting time for Color. They’re essentially working with a gun against their head. Working on an app, mind you, that’s going to be a Facebook/Apple/Google-killer. Or something.

The mulligans are over. They’ve still (hopefully) got $35 million+ in the bank, but that won’t save them if they flop in a similar manner.

They really need to sex us up this time.