Yesterday I saw several messages in my twitter-stream about Sequoia investing 41 million USD in a start-up by the name of Color. My first reaction was quite simply “what the hell, 41 MILLION?! In a start-up?”
I did a bit of checking and yes, it was 41 million USD. So the next thing I did was read the blurb, check the Color website and see what this the skinny was. There is very little explanation on the Color website but on the Android market listing I found this snippet:
Use Color to take photos and videos with other people who have Androids or iPhones within 150 ft to create a group album
So hold on a minute, Color let’s me take pictures of my direct surroundings and share it with friends and strangers who are also in the same location?! More details: You get their photos, they get yours.
Hey I already have an app that does just that, it’s called the “finger & voice app”. I point at something and shout; “hey, have a look at that”.
But seriously if you look at the big picture and consider the recent “big thing” called Path. Path let’s you create an online picture album but only share it with your “real friends” and sharing is limited to 50 people. From their own website:
Path is the simple and private way to share life with close friends and family. Use Path to capture life’s moments in photos and short videos, make your moments beautiful and more personal, share your Path with the people you care about, add tags to remember context, and have intimate conversations around each moment.
Now consider this, We have all been sold on sharing everything we do and everywhere we are via Facebook, Twitter, Foursquare, GoWalla, GetGlue etc. We are constantly plugged in and share the most inane or sometime poignant information. I am on the bus, on the toilet, reading a book, watching people getting shot in Libya, whatever.
Now that this market has become increasingly crowded and less competitive we are now being told to share less. MORE IS LESS.
And off course the venture funds are frothing at the mouth to be sure they invest in the next big thing. Even considering that Color gets a huge uptake 41 million USD is an awful lot of money. Consider that a 10x return for an early stage investment (this is basically the largest angel-type investment ever) is a moderate profit and considering that the reported 61% equity is correct then in 4-5 years time Color should be worth about $672131147 (and that’s just a very off the cuff calculation). What’s more beside achieving that valuation there should also be a party willing to buy Sequoia’s stake at that price. Otherwise Sequoia has just made a less than smart investment.
Do I see this happening? Quite probably not. In my opinion Color is nothing more than a rainbow with someone hoping there’s a pot of gold at the end. Top of the morning to ya!