The latest app making a big buzz seems to be one simply called Color. Why the hoopla about what is, at best, a location-based photo sharing app? Because they raised a whopping US$41 million dollars in funding before even launching. Before you say "bubble 2.0," let's take a look at what Color does. Although I have to wonder how much of that went to procuring the URL www.color.com -- and if this really is the peak of the new bubble. [Update: According to Gizmodo they paid $350,000 for the domain. Thanks, commenters!]
Color, as an app, is nicely designed. When you first start it up you'll be asked to give your name. I entered Victor, but it seems you can enter anything here, and you might want to consider your Twitter handle. I have no idea how Color will handle duplicate names. Will I become Victor1138 when I encounter another Victor? We shall see.
Naturally, you'll have to agree to use your location, and (if you wish) push notifications. I found both dialogs came up at the same time, which was annoying. Then you take a picture of yourself, and it is appropriately tagged with a location (invisible to you), which creates a new group. Upon taking the required picture of myself, the app crashed and did not save my name.
The concept appears to be that if you and your buddies are all taking pictures at the same event, those will all be grouped together in the app, automagically, and you'll get to see one big album. Just like a photo party! That's basically it for the app. Pictures are grouped by location, within 150 feet of each other. There's even a cute warning on the app description page: DON'T USE COLOR ALONE! Once you take your first pic, you are encouraged to go out into the world and take pictures with friends who are using the app at the same location.
The app is free, so try it yourself and see if it is your cup of tea. But is this worth $41 million dollars in funding?
Mathew Ingram at GigaOM asked the funding question and answered it quite well, I think. It goes back to what smart investors do: invest in the team, not necessarily the dream. Color has an all-star lineup in management. Veterans of Lala, LinkedIn and BillShrink are running the company. Each one of those companies, let alone the men behind them, are fantastic (remember Apple bought Lala) and easily could parlay their networking experience into a powerful social network based on location-grouped photos.
Except, in my opinion, this team has a real challenge. They have to rapidly build a social network before competitors flip a switch and enable this very same function. Ignoring, for the moment, the fact that the Facebook app is mediocre at best, how much effort would it take to get this same functionality in the Facebook app? Even Instagram, which is enjoying some level of success in building a photo-based social network, could do this quite readily.
Just because you have an A-Team of managers and a kewl domain does not mean you will make a 10x return on investor's money. I like Color, and it's always great to see new things, but in this case, color me skeptical of its success for investors. Before passing judgement yourself, be sure to look at this hilarious satire of Color's "pitch" deck -- a great parody of the mentality behind VC funding in general. Good luck, Color, you're gonna need it.