Color Will Be The Pin That Bursts The Startup Bubble

https://news.ycombinator.com/item?id=2365556

by goldham • 15 years ago

15 24 15 years ago

news.ycombinator.com

I'm going to be quick.

-Friend showed me app on iPhone

-Noticed similarities between Color and Path, does not provide any usefulness to me

-Realized I can now creep on people nearby without having to ask their name and friending them on facebook

-Excitement grew with media frenzy over Color and a few friends downloading app

-Downloaded app

-Constantly crashed when uploading photo

-App lost its novelty

-App deleted from phone

-Startup that created app has 41MM funding

pcolton• 15 years ago

To be fair, the funding probably came sometime after the app development started.

I tried it as well. I can see the novelty of it -- watch in real-time what people are doing around you. It definitely has a voyeuristic aspect to it.

I think all that money could also be used to consolidate the market a bit -- do we really need 30+ photos apps?

PS - I'm working on a photo app. :-)

calebmpeterson• 15 years ago

i doubt Color will burst the bubble, but it sure seems to be a strong indicator that there is a bubble of some sort...

phlux• 15 years ago

Assuming the premise of your title is correct, that the bubble bursts.. what would this mean?

Funding dries up because all these ideas cant make money. Valuations plummet - nobody hires and we have bust 2.0.

except it is different because this time around we have a glut of seasoned developers that can build a hell of a lot of stuff.

So I cant see this burst being the same -- but I see a lot of stuff being built for no / little funding.

dstein3• 15 years ago

No, the burst will come after the Facebook IPO when they can't find a way to make the $5,000 per user per year that their stock valuation will suggest it can earn. When Facebook stock crashes and it's plastered all over the news, that'll be the start of the bust. We're a long way from that.

DanLivesHere2• 15 years ago

Where are you getting $5k/user/year?

noodle2• 15 years ago

i see ~$83b valuation, and ~500m active users, putting it at around $166/user

dstein3• 15 years ago

I just pulled it out of the air for dramatic purposes.

sunkan• 15 years ago

How come everyone misses the fact that the app doesn't make the company. I think color actually redefines "social". If these guys are successful in executing their vision, their current valuation will seem a no-brainer. I seriously don't understand all the negativity and backlash around their launch.

This is coming from a guy that couldn't get their app to work. Every time I try to take my picture, the app crashes. But I don't think that really matters.

Isn't this the same community that proclaims, if you are not embarrassed with your initial product release, then you haven't released it early enough. ?

pclark3• 15 years ago

All of the startup mantras hacker news recites go out the window if you raise lots of capital, apparently.

plamb2• 15 years ago

And they should. There's a big difference between two guys renting a house and living of their savings accounts pre-launch and 41 million dollars and 27 employees pre-launch.

dglassan2• 15 years ago

ya, it applies to a team of founders living off their savings who need to push their product out and get quick feedback from initial users to set their product/service in the right direction.

A team of 20+ people with $41 million in the bank has the luxury of not having to worry about missing a rent check and they have the resources to do thorough QA testing and run a beta program to get initial feedback (maybe color ran a beta program I'm not sure).

Color definitely has the resources to run a 6 month beta program to get feedback and test their app....a founding team of two living off their savings may not have the time or money to do this.

curt• 15 years ago

Facebook valuation is only $20/user each year (profit).

Simple Valuation Breakdown: Take $80 billion and divide it by an EBITDA multiple of 10 = $8 billion. Divide that by 400m users, for $20 profit/user each year.

EDIT: EBITDA: Earning before income tax depreciation and amortization.

Color Will Be The Pin That Bursts The Startup Bubble

Related Stories