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Color: raising millions, failing badly. Instagram: fine thanks

A tale of two startups: Color and Instagram.

I've written enough about Kodak and its nosedive into bankruptcy by failing to understand digital, the Internet and what its modern customers were doing when snapping pictures. Today we take a look at how an Internet startup failed to get off the ground, at least for now. Say hi to Color, remember them? John Gruber at Daring Fireball doesn't temper his words about Color, he fairly spits them out: "Someone should make a list of every jackass tech site that took these Color idiots seriously simply because they raised dickety million dollars in VC funding." Cough.

Let's start here and work backwards in three quick steps: As of today Color has roughly 1000 daily active users. Color has been the butt of jokes since it flopped at launch. Color raised $41 million in venture capital.

Here's a TechCrunch take: "Sequoia saw the product and talked to the founders about their vision for it. They also saw Nguyen, a founder who just about everyone you ask will tell you is a genius with excellent foresight. And they saw the rest of the founding team and the extended team, most of which are ex-Apple or ex-Google. As Mathew Ingram implies on GigaOm this morning, it’s very likely that the team alone is worth $41 million to a would-be acquirer (though the true valuation has to be north of $100 million now). Hell, Google offered to buy Path for over $100 million just a few months post-launch for that very reason."

Meanwhile Instagram received $7 million in funding and has 14 million users according to the company blog.

Instagram is an extremely simple app to use and photos taken with it can be posted quickly to Facebook, Twitter, Tumblr and Flickr to name a few. Even though it's currently only available for iPhone (Android app coming soon apparently,) it roared out of the gate gaining 2 million users in its first few months.

And Color? Well, at its launch people were very confused as to what problem it was solving and what it was actually meant to provide for users. It didn't help that the $41 million round just created bad PR too. The company is apparently still alive as they just launched this glossy (if not weirdly creepy) commercial. As others have pointed out - yes, you can shoot video and post it to Facebook but Color doesn't record audio so I'm not sure what the result will be..

Pool Hopping Commercial 2011 from Color on Vimeo.

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