It’s no secret that there’s been a major amount of controversy surrounding Color, the photo sharing app that launched earlier this year with $41 million in funding from Sequoia Capital, Bain Capital, and Silicon Valley Bank (Sequoia apparently put $25 million in). Color’s debut was one of the most-hyped launches the tech world has seen over the past year, and since then the company has been plagued with executive departures, and a struggling product. Sequoia partner Doug Leone, who sits on Color’s board and led the investment, sat down with us last week at TechCrunch Disrupt to talk about what he refers to as his most exciting investment in the past year (he begins talking about Color at the 4 minute mark in the video below).
Leone says of Color and its founder Bill Nguyen, the startup has a “passionate founder who had a loud introduction of a product that didn’t hit the market or bulls-eye,” he says candidly. “But give me an entrepreneur with a lot of courage, gusto and who iterates rapidly, and I will back that person day in and day out.”
Clearly Leone doesn’t have any regrets about his investment. But he also admits that things did go wrong with the launch of Color. He revealed that Sequoia only invested three days before the scheduled launch of Color, and that the debut of the app had some weak points.
He says of the negative press Color received post-launch—”The main reason the company received that feed back is because of a big splash announcement with not a lot to show for it early on.” He adds that Nguyen and his team have been iterating in the public eye, which is especially hard for a startup.
But Leone still seems bullish on Color’s future. He said that Sequoia is “thrilled” to be an investor in the company, and cautions us to “stay tuned about what Color has up its sleeve.” He’s referring to Blue, which is Color’s next project. We don’t have too many details on what Blue is, but we do know that it’s a new mobile app with deep ties into Facebook Photos. We could find out more this upcoming week at Facebook’s developer conference F8.
Nguyen has to be feeling massive amounts of pressure with this upcoming launch. Color’s fate could be tied to Blue. One failed product is acceptable, but two failed products can be tough for any startup (even with $41 million in backing) to rebound from. Leone actually told me after the interview that he’s been testing Color’s new product and said “it’s awesome.” Clearly he’s biased, but the positivity he has for the company overall makes me think that whatever Color does have up its sleeve could be compelling. We’ll hopefully find out more this week.I'm Lena Rowell, we're here backstage at TechCrunch Disrupt, with Doug Leone, partner at Sequoia Capital. Doug, how long have you been involved with Adventure capital?
So this is your career. Well you were an entrepreneur and a developer. And all of that prior, correct?
I was a sales guy, that's what I was, not a developer.
What in sales brought you to venture capital? Meeting the venture investors and the CEO Sub-Micro systems opened my eyes to a whole new world in Silicon Valley. And the beauty of sales, it keeps you near the customers, so in the last 23 years I've always had the customer view of things. So when I look at a company, I right away think, is this a product that I could sell, is this a product that one of my Customers would want to buy.
So 23 years, in your day to day experience, what are the challenges of being a VC. We always see how great it is to meet all these different companies, and invest, really invest in the future of where technology is going, specifically. What are the challenges?
I think there are two challenges. Challenge one is keeping your brain in software. As you get older, you get a sense of confidence that you know what you're doing. And the moment you do that and you fall prey to that, I think your brain becomes more hard wired, and you become less at tune to the next idea of a 22 year old.
And some of these ideas are kooky, but some of these ideas changed the world.
How do you know?
I don't think you do know, and sometimes you make an investments and five months later you say my God, what was I thinking. And other The time, you make another investment and it turns out to be Google or Youtube, but you know, some of these ideas, when they come to Sequoia. They found pretty far fetched, so you have to be incredibly careful, open minded, listening, and really pay attention to the brutal sheer logic of the entrepreneur.
What is an investment that you've made recently, certainly in the past few year where you feel like it's been spot on.
Spot on. A couple of them.
One was Aruba Wireless. It was a very easy investment for me to make because we had been investors in Cisco and many of the technology companies in communications, we all understood wireless was going someplace. And when I met the founders of Aruba, it was a one meeting and commit, or Rackspace. We understood the hosting market.
It was a one meeting and commit. So those are very easy investments, that if you will, played within the market maps that we had drawn. Now, there's a whole bunch of other investments that completely break the market maps that we draw.
So they need a couple meetings? No, couple meetings, those are just as fascinating because you build a preconceived notion of the world from the best knowledge you can come up from industry experts and then a 23 year old comes and punches a hole and he doesn't know he or she is doing this, punches a hole right in that logic.
And those tend to be even more interesting.
And it's tough to know where future is going.
Tough to know. Tough to know.
What's one of those where you didn't know where the future is going personally and then it ended up being what this is an enormously successful company.
Netezza was a wonderful success company. It wasn't clear back seven years ago.
The move to big data. And now big data has a name on it.
Back then it didn't have a name on So that was one.
Is it a computer system, is it a big data, what is it?
But that lead up to be a very successful Recently, what's been your most exciting investment in the past year or two?
My most exciting investment right now is a little company called Everyone probably knows about Color.
Everybody knows about Color, and everybody knows that the passion
I've found had a very loud introduction of the product that didn't really hit the market the bulls eye.
But give me An entrepreneur with a lot of courage, a lot of gusto and a lot of vision, who iterates very rapidly, and I will back that person day in and day out.
Well, I think that's really fascinating, because So much attention has been drawn to color, you know, based on its funding when it first launched. And then it pivoted. But there are so many very, very successful companies. That have pivoted, and they just happened to pivot maybe a couple months in, and could easily grow into something in a different way.
Why do you think they got so much criticism off the bat?
Oh, I think a lot of it was. And keep in mind, we invested three days before the announcement.
So, we didn't have a chance to affect the announcement, but I think the main reason the company has received the feedback that has, it is because of the big splash announcement with not a lot of things to show for it, early on versus taking them much more gentle approach and coming up and finding the market from the bottom up.
So that cause some of the pain the people of Color and we have felt. But I will tell you, and I'll say it again, we're thrilled to be an investor, and we're iterating very rapidly. Just as many times when you're iterating, what you do is, you do it in private--nobody has heard of you. Here we're iterating in public, which makes the whole thing a little more difficult.
It's hard. And experienced entrepreneurs, it's not like no one knows who they are. So, we're excited to see what Color has up its sleeve.I think we're going to hear about that soon.
Thanks so much for joining us, Doug. It's really been a pleasure.
CrunchbaseCompany:Color LabsWebsite:color.comLaunch Date:September 18, 2011Funding:$41M
Color is a social app for photos. You take photos and then the photos appear on the fly with other photos in your vicinity. You get to see the photos your friends are taking as well as other people within 100 feet of your photo. The app will group photos based on who your friends are so you are more likely to see photos that you are interested in. The service is available on Android or iPhone.Learn more