When news of the $41m funding for pre-launch startup Color broke a couple of weeks back there was widespread debate about why so much money would go into such an early stage business and (predictably) what it means for the ‘we’re in a bubble’ hypothesis.
Shortly afterwards Jason Calacanis issued an email newsletter detailing what he saw as the rationale, which I’ve been meaning to share ever since.
Firstly the background. In Jason’s words:
Facebook’s social network is getting long in the tooth for the digerati, who are looking to spend their social cycles somewhere else. Twitter, Path, Foursquare, Gowalla, Yobongo and most recently GroupMe have shown that people are looking for an alternative to "The Facebook."
Intelligent VCs have been building a psychological profile of the company that would "kill"– or at least compete with — Facebook for the past year or two. So far, this magical company will:
* be mobile first, since Facebook sucks at mobile.
* have some new spin on how the social network is formed.
* be lead by a hungry entrepreneur (or two) coming off a big hit.
* leverage one or both of the primary drivers of Facebook traffic: photos and social games.
And of course, the site will have a killer domain name.
For me the most important of these five characteristics is the ‘new spin on how the social network is formed’. One of the clever ideas behind is that the social network is formed implicitly by sharing photos. Much has been written on the subject of implicit social networks, particularly by Fred Wilson (and even by me), and with good reason. Manually built social graphs are slow to create and cumbersome to maintain, and as a result we will each only have a small number which will then be shoehorned into a bunch of different use cases, as anyone with work-private social network crossover problems knows only too well. Implicitly formed social networks, however, are by definition zero hassle to build and maintain, and hence we will be able to have many more which are tailored to specific use cases.
Finally, no matter what Jason says, for me ‘Color’ is not a killer domain name, except in the sense that it kills me every time I have to write it. The anglo-American spelling difference undermines its simplicity and subtle appropriateness for a photo sharing app.
To close, some humour. If you’re winding down for the weekend already you might enjoy this parody pitch deck for Color.