Ideas are funny things: From ridiculous Color to Meerkat love

Good ideas take time to be understood. There are usually three stages.

Meerkat, a live video streaming smartphone app, is the startup of the month judging by screen upon screen of media love for all things Meerkat. But Color, a very similar smartphone app, was ridiculed four years ago.

Color Labs, founded by serial entrepreneur Bill Nguyen, raised a $41 million round in March 2011-- and triggered a cacophony of clueless criticism in the media.

For some reason, Color became a viral symbol for Silicon Valley's reckless funding, and it was used as a sign that a "bubble" was likely developing. For gleeful Silicon Valley outsiders, Color's funding was a heaven-sent example of how Silicon Valley's "smart money" VCs were as dumb as a dumbass.

Color was not any of those things. It was a bold attempt at creating a new type of shared social experience, it went far beyond Meerkat in capabilities and ambition.

Color Labs initially raised a $14m funding round but then Sequoia, the iconic Silicon Valley VC firm, wanted a slice, saying, "Not since Google have we seen this." Sequoia reversed the numbers on Color's round from $14m to $41m -- and that's when a tidal wave of ridicule by the clueless media began.

Money too small to mention

These days, $41m funding rounds are too small to mention and so are their novice startup teams. But investing in a Bill Nguyen venture is always going to be a smart move because of his excellent track record.

He's founded several companies and sold two of them: Onebox for $850m and (my favorite music service) for $80m.

Meerkat Love

Meerkat recently raised $12 million. Founder Ben Rubin has no track record, he is a former "fashion trends" importer based in Israel. And nobody laughed.

Instead, there has been a tidal wave of media love towards Meerkat and Rubin, from the very same news sites that ridiculed Color.

The evolution of good ideas often follows a three-stage progression: first, everyone laughs at the idea; then they accept it and love it; then everyone considers the idea so blindingly obvious that it's not even worth mentioning.

Was Color too early? Probably, but as Dan Scheinman, when he was head of M&A at Cisco once told me about startup failure: "You can be too early, too late . . . or right on time." It's tough building a successful startup -- it's not just about the timing.

Color Labs failed but that's part of the Silicon Valley game: if you don't play you can't win. Bill Nguyen will be back and I'm looking forward to hearing about his next startup idea.


You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All