The Engadget Interview: Lala and Color founder Bill Nguyen

Bill Nguyen radiates enthusiasm. It's constant and infectious, and when he attempts to sell you on his latest project, it's hard not to get excited -- this alone seems reason enough to want the guy on your team. Nguyen also has more than his share of experience heading startups -- some have even gone so far as describing the Houston native as a "serial entrepreneur," certainly not a stretch, having founded and Seven Networks early in his career.

It was the creation of Lala, however, that really put Nguyen on the map. The service was founded in the mid-'00s, around the concept of CD swapping, users mailing physical discs to one another in little red and white Netflix-like envelopes. The site shifted gears soon after, being reborn as a streaming service. The concept was born from Nguyen's typically utopian vision of free music streaming, in hopes of spurring purchases amongst a dedicated audience -- the actual product, not surprisingly, was far more of a compromise, limiting the streams of users who didn't already have that music stored in their PC. Read our full interview after the break.

But while Lala never quite achieved Nguyen's perfect vision, the service racked up plenty of successes, signing partnerships with Facebook and Google, only to get snapped up by Apple a few months later. Nguyen and team were assimilated into the world of One Infinite Loop -- quickly by his own account, only to have him abandon the Cupertino mothership less than a year later, to begin his latest project.

Color was launched in March of this year, with the help of tens of millions of dollars in VC -- a fact that helped the company score the pricey domain. Thanks to the massive funding and Nguyen's own history, the location-based photo sharing service was met with a fair amount of excitement -- an enthusiasm that would fizzle out soon after. Nguyen acknowledged the company's failings when he stopped by our offices earlier this week, stating, simply, "we forgot the [social] network." The newly launched version of the service looks to remedy that oversight by jumping headfirst into Facebook -- and Nguyen, as ever, oozed enthusiasm as he outlined the changes to us.

We sat down with Nguyen to discuss the new site, the end of Lala and what it's like to have your company swallowed up by Apple.

The relaunch seems founded on the concept of Facebook as a microcosm of the Web.

It's a new operating system. When I was a kid, I couldn't imagine applications that didn't have WYSIWYG, that didn't have a GUI. When I was at Apple, I couldn't imagine applications that didn't have a touch UI. I can't imagine applications in the future that don't have a social layer built into them. So, when we built Color, we had a very clear vision which is: how do you build something where people can get to know the people around them, their co-workers or neighbors, so they can be more engaged or more open? And we thought it wasn't possible to build this on Facebook, because Facebook was just about your friends and the realities of the last six months. But working with them as partner, you can actually build anything on it. It's one of the most extensive fully open platforms that we've ever seen, that we've ever developed for.

Having started your own company and being bought by a larger company, I assume there's a certain amount of constraint. Were you worried that, had you immediately partnered or worked in a different ecosystem, that you wouldn't be as free to create things as you were with your own platform?

I never felt that way working at Apple, or even working as a partner with Facebook. You always have more things you can do because you have more resources and opportunities. The challenge is really a different one, which is why I have to pick some things to do and not everything. There's so many things you can do at Facebook, there's so many APIs. Same thing at Apple. Apple could have done anything, we came from Lala with this perception: we really think the cloud is going to change computing.

Apple clearly had a similar thought.

Absolutely, they are doing some amazing things in that area. So, you know, when we were at Lala, we had this early perception of where cloud computing was going to go. And it is really satisfying to see Apple do it and Spotify really innovate on top of it, as well, so we think that there's a lot of great innovation. I think that what we realized when we started Color was that there is just going to be a social implicit graph, and we thought that the phone was the core driving mechanic of it. I think we just missed out on the biggest ingredient: we needed Facebook. it was really the underpinning of all that stuff.

So you think it was a mistake launching the app as a stand-alone?

Oh, totally, without a doubt. We could have given users a much better experience. They wouldn't have had to open an application and create a new network, they could have had something to start with. When you want to meet new people, it's much easier when you say, "John is a friend of Bill and Bill is a friend of John," it makes it so much easier to make a connection with people. So, I think that even when you use friends of friends and not straight friends, Facebook allows you to do these things, they have a pretty broad graph.

There was a lot of excitement when Color first launched, and seemed like it went away pretty quickly.

We knew fairly quickly when we launched Color that we forced people to do too much. We wanted them to get to know new people, we wanted to give them functionality. but in order to get there you had to have an iPhone, you had to have downloaded Color, you had to have been in the same place, and you had to create a brand new network. We made people do a lot. So we had a choice, the moment we realized we could start iterating Color slowly and get people on board, or we could actually just kinda go semi-dark and rebuild from scratch with Facebook, and I think that what would have happened we would have iterated slowly from the first application and it would have taken a year and a half to get there. It took us six months. We literally stopped doing everything, and for the last six months all we've been doing is developing on Facebook. So, we got there a year faster than we would have.

So is this going to be a hard sell for people since they've already downloaded the Color app and it didn't quite take off? Is it gonna be hard to sell it again as a new product?

The first time we launched Color, there were so many early adopters. People were really excited about jumping onto a new network, whether it is Foodspotting or Twitter or anything else. I think it's a very different opportunity this time. You are going out to an audience that has 750 million people, so one person on Facebook that sees this application can provide really great functionality for their 500 friends. It was very different the first time, 500 people had to get it and they might not even be able to use it together.

The idea is that these people are accidentally opting into it, not from a privacy perspective, but just not realizing that they are using this whole new service. They just have a new feature at their disposal.

That's exactly what we are trying to do. We want to give people a new gesture on Facebook. We want to tell people "look, you already know about photos on Facebook, they're awesome. But when you use Color, you get a brand new gesture -- not just a like, not just a comment, you're gonna get something called a 'visit.' "

When you launched Lala, was the hope to eventually be bought up by a larger company?

No, we wanted to build an independent company. I think in the end , we weren't patient enough. I think we built something really cool, and people loved it. We had Google as a partner, we had Facebook as a partner.

You built two different services.

Yeah, totally different services. Actually, maybe even three. We started CD trading, which became an online radio station, and then we did the cloud. We were searching what we wanted to become. We expected it to happen so fast. I give all the credit in the world to Daniel [Ek] and the guys at Spotify, because they're persistent. Where we had some great ideas, they had an amazing persistence to survive.

So, you can point to Spotify as a model of what Lala might have become in an ideal world?

We had all kinds of crazy ideas of what we wanted to do. But I'm really proud of what they built. I like the service, i use it, and I really think the world of it. As Bill Gates said, "every time you try to predict the future you are five years too early, and when you try to predict the impact of it you're five times under." The impact of it was much greater than you could have imagined or dreamed of, but it just happened a lot later than you thought. So, when we started Color we said "we're gonna raise enough money so that we can make this thing happen." We strongly believe this post-PC world is going to affect how we live socially. Our phone is going to become our best friend. And for us, the first version was like, let's go all in and create our own network. Well, now we know that doesn't work.

So, in the back of your mind there isn't maybe a hope that Facebook will love this integration and want to buy it?

I hope they don't want to buy it. We love the path that Zynga took. It's great to be an independent company. I think Facebook is much more interested in having developers push their platform than trying to buy their apps. I think they want to see a really great ecosystem develop out and we're purely focused on that.

Do you have any regrets about letting Lala out of your hands?

No, i think that if Lala didn't happen, I never would have had the opportunity to be at Apple. That was the single greatest learning experience in my life.

How so?

One of the things you learn really quickly at Apple is that they focus so much on providing the users with a complete experience. It sounds so much easier than it actually is. Even though I knew that lesson coming out of Apple, when I started Color I still tried to do everything, so we were kind of going back to some real fundamentals, which is how do you provide people with a really good experience with something they already love which is Facebook?

How long were you at Apple?

Just short of a year.

It sounds like you enjoyed the experience, why didn't you stick around a little longer?

When we saw what the Apple devices could do, from the iPad to the iPhone to the iPod touches and everything else, I just realized that this post-PC thing was happening, and I just had to build something.

The perception of Google is that it's an environment where you can work on you own pet projects, and some day they might become part of the larger company. Is that not the case as much within Apple?

I think that it's a different culture, but a really unique one. One of the things about the Apple culture is that whatever you build will hit a mainstream audience.

From the outside, it seems that all of the directives come from the top down.

I don't think so. One of the things I learned at Apple was that everyone had an audience. Everyone had a chance to contribute their ideas and input into making great things. That's how a lot of the folks have risen to the ranks that they did. They're really creative people. When I think about the Apple experience, what I loved was that it achieved scale. If I design a company like Color or Lala or anything else, and hundreds of millions of people don't use it, then what was the point of creating it? So, I think that Apple is absolutely right from that perspective. It's fun when people use what you do.

Apple has one phone and two notebooks. It ultimately doesn't produce a lot of products, but they're all part of one ecosystem. Google, on the other hand, has a million things happening at the same time. So, it seems a lot harder to do something that's coming out of left field in the context of Apple.

It depends on how much you love making things really great for consumers. Have you ever taken the Air and put an iPhone up to the corner of it? [Places the edge of his iPhone into the indentation near the Air's trackpad.] See how it fits? They've done so many little things, and that's not easy to do. Making this device as sleek as it is and making the mechanical tolerances it has and making the software work the way it does, it's not easy. A lot of times a startup can go out and spend three months and make this really grand vision. I know a company like that, it's called Color. We tried it, but we forgot all the nuances. We didn't do all the finishes that people should. We left out the social network. I look back, and I'm kind of ashamed, because I was at the place that could have taught me that better than any other place in the world: "finish what you started".

At the time of Color's launch, this didn't seems like something you'd accidentally "missed." The plan was to create an ethereal social network.

Yes, but in retrospect, by working with Facebook for the last six months, it would've been so easy for to have worked with the site at launch.

Facebook makes the whole thing less ethereal, offering up the context of five years worth of images.

Color's goal is really simple: to help you meet new people. Let's get you to broaden your horizons a little bit. So in order to do that, I can use two things: all the sensors on an iPhone and say "hey Bill, you're by this guy named John," so I max out the technology and I've determined something interesting. But John and I may never talk to each other because of one little piece of friction which is, why should we talk? But if all it did was say, "Bill, here's John and he has similar friends as you, and you guys have these common interests," we got Bill to meet John.

You've just created a temporary network in the context of a larger social network

Yeah. And i think that is the part that over the next five to ten years, applications will change. Applications are going to become not just things that used Facebook to drive traffic, they're going to be things built on Facebook.

Facebook as a platform.

Yeah, we'll look back and say, how did I ever use that without Facebook? A perfect example is going on to Amazon and reading reviews. I have no idea if the company sent someone to write this review. I don't know who this person is. I don't know anything about them. I have no context. But if you take all those historical reviews on Facebook and you apply to an Amazon purchasing experience, that's gonna be an awesome purchasing experience.

You're harvesting this metadata that's just been sitting in these photos waiting for someone.

They're giving API access to everything. It's amazing. App developers will add the social layer to everything. We took all that amazing power of your iPhone and 3G networks and you can literally create the Truman Show from your cellphone. You can literally broadcast to all of your friends based on their demand.

Are you happy with what Lala turned into after the Apple acquisition? We're seeing bits and pieces of it incorporated into other products, can you point to products and say this was.

Well, I can't give specifics, but I can say that it's really fun to see how quickly Apple assimilated the team we had at Lala. I'm really proud of that.

So there's still several people over there?

The vast majority. I think they love their jobs and they're excited about what they're building Apple is a company that grew slowly, it's had a lot of up and downs, and in the last 10 years. But they're always very cautious. They bring in people, and it takes a while for them to assimilate into their culture. But they really embraced us in. The things that we cared about were things that they listened to. They had a clear plan of how they wanted to get to the future.

From our perspective, it seemed to take forever for iTunes to get the cloud treatment, after the acquisition of Lala.

I think in a weird way, maybe the cloud is not even ready. I think, even everyone else is still a little bit early.

The infrastructure isn't in place?

Not the infrastructure, just the concept. We're still used to plugging crap into a machine. I think Apple's implementation is one of the best I've seen. It's gonna be really good because it begins with a really basic premise: let's start with the media that you bought from us and the photos that you've taken on our device. I think that they've taken it at exactly the right pace. Any faster and people would've gone, "what do I do with my storage?" There's a lot of stuff that consumers have to learn and assimilate with. We were a little bit too early. I'm really glad, because if it weren't for Apple, a lot of the ideas that we tried to foster would have just died.

[Nguyen's phone lights up -- something he assures us wasn't planned.] Oh my god! My kids! [Holding up his phone, which is broadcasting a low-resolution video of his children in his kitchen.] So, this is how we use it. This is how it works. The magic of this is that one of her friends requested to "visit" her because of a photo she took. That's the stuff that i'm excited about. It's that serendipity, that's all we ever wanted to create. Facebook made it possible, so what else can i possibly ask for from Facebook?