Why Color will fail (and how your social startup can succeed)

Written on March 27, 2011

Color, the latest golden child of Silicon Valley, has recently received $41 million in venture capital. Pre-launch. Despite this gargantuan show of monetary support from some of  the Valley’s biggest names, there are a number of inherent faults within the service which will make it very difficult, if not impossible, for this fledgling startup to succeed.

Color is an all-new application for iPhone and Android which automatically shares photos between users in close physical proximity to each other. It uses GPS, triangulation, your accelerometer and even your phone’s microphone to find other Color users nearby. Unlike other photo-sharing services like Instagram, Color does not use friend lists, or followers to share your photos. Instead, every photo you add to the application is automatically shared with those around you, and you are automatically shown the latests snaps of other Color users nearby.

To explain  the first, and primary flaw within Color, there is a very simple test you can try out yourself. Download the application (for free) onto your phone, and just launch the app. Were you expecting to be overwhelmed by the beautiful photography of other Color users? You would be mistaken. For the large majority of users, when launching the app there is quite literally nothing to look at – just white space. There is an excruciatingly simple reason for this: nobody is using it yet. In order for social apps like this to succeed, they require a critical mass of users for it to work – which Color does not (yet) have. This presents a major problem for the company: if, after running the application once, a user doesn’t genuinely enjoy the service, it’s very unlikely the same application will be launched a second time. Now as the majority of initial users will not enjoy the application on first launch (due to there being no content) Color will lose users fast: and this is highlighted in the extremely low two star rating for the application on the iPhone App Store. It is vital that, with the huge amount of media attention the application has received following it’s launch, the service gains and holds onto that initial user base. Right now, the company is losing hundreds of thousands of the most enthusiastic first adopters – and they will pay the price for that in the long run.

A staged release would have resulted in a far more successful launch: so the application would be made available to users from only one city or region at a time. This would have allowed the service to expand steadily while maintaining a happy user base: similar to how Facebook expanded by one university at a time. Alternatively, the application itself could increase it’s proximity radius dynamically: so if enough photos aren’t available with a 100m radius, it would expand to 1km and so on until the photo feed could be filled. This would also result in the application making itself more accessible for those in more sparsely populated areas. The application either requires an extremely active user base (which they don’t have at the moment) or they need to ‘fake it until they make it’ by expanding the proximity radius dynamically.

The practical usefulness of the system itself has been debated, however it seems that the photo sharing aspect of Color is just the beginning of a much larger ecosystem of localized sharing. As Daring Fireball discovered:

Color is not about photo sharing. It’s a new way to build spontaneous social networks — and collect massive amounts of data about what people are doing and where they’re doing it — without collecting any personally identifiable information like last names, addresses, or even passwords.

The idea in itself is revolutionary, and potentially game-changing: but this initial launch will likely fail to maintain the large user base which Color requires to succeed. Make sure your social or location-based startup does not make the same mistake: as you won’t have $41 million in the bank to keep you going.

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