Color Labs
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Color Labs was the 2011 startup of Bill Nguyen (who had sold Lala to Apple for $80 million in 2009) and Peter Pham, best known for the photo-sharing app Color. Launched with an astonishing $41 million in pre-launch funding led by Sequoia Capital, the app flopped with users; co-founder Pham exited three months after launch and chief product officer DJ Patil one month later. Nguyen pivoted to a new video-sharing app for recording and posting 30-second silent videos to Facebook, which landed a distribution deal with Verizon in May 2012.
02 / Color Labs FAILURE REASONS
Failure factors supported by the current evidence
The Next Web (19 Nov 2012), quoting the Adam Witherspoon complaint, states that after Color’s product failed to perform well in the marketplace around September 2012, Bill Nguyen brokered a deal in which Apple wanted only Color’s IP and engineering team—i.e. the consumer app did not find a market.
The lawsuit as reported by TNW says Color’s product failed to perform well in the marketplace around September 2012.
TNW reports Apple was interested only in Color’s intellectual property and engineering team.
03 / EVENT HISTORY
Events in the structured record
- Asset sale
The Verge (19 Nov 2012) reports the Witherspoon lawsuit confirms ‘the company failed’ and that key assets were sold to Apple. TNW the same day quotes the complaint that Apple wanted only IP and the engineering team.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Raised approximately $41 million in a pre-launch round led by Sequoia Capital — far above the typical $1 million seed rounds of the era.
- 02
In October 2012 the board and majority shareholders voted to shut the company down; Apple acqui-hired about 20 of its engineers for roughly $2–7 million while the technology, patents and domain stayed with the company.
- 03
About $25 million in cash remained on the books and began being distributed to shareholders; the Color app stopped serving after December 31, 2012.
- 04
No audited loss figure was publicly disclosed; neither the $41 million raised nor the roughly $25 million returned to shareholders counts as a loss.