The real reason people are mocking Color, and why their investors should be worried

There's been much discussion around Color, their new mobile application, and the fact that they raised $41 million dollars in VC money.

Most of the criticism I've read has been around a poor first time user experience of the application, the fact that they were able to raise this much money without a single customer, and that their advertising revenue model is unlikely to succeed. I agree with pretty much all these things, but I'm also very intrigued by the use case of the application.

At it's heart, Color is intended to be a social network that works to bring people together, physically. I've written elsewhere that I believe the next generation of social networks is going to do just this, and so because of that I'm willing to buy that there is potential, and I actually kind of want them to succeed because of this.

But I think there's something much more ominous than a poor version 1.0 and being made fun of that their investors should be worried about. And that is that the founding team, regardless of their previous successes (which are large), are showing a general lack of creativity and a misunderstanding of the marketplace in which we currently live.

This is evident most clearly in the fact that they paid $350,000 for the domain name color.com and another $150,000 for the domain name colour.com. That's right, half a million dollars for two domain names.

The problem with this isn't necessarily the cost of the domains, but the fact that they even think domain names matter anymore. I was talking with a friend and he made a great point that if someone was selling diapers, and it was 1997, and they bought diapers.com it might actually make sense.

And that's just the problem. It's not 1997.

It's 2011 where people know, understand, and expect that domain names will be taken. We just don't care about them anymore, and if your product is awesome we're able to find it. I just registered two domain names over at GoDaddy: http://mycolorapp.com and http://mycolourapp.com. I paid $24.37, including tax, for both of them.

Are we really to believe that color.com and colour.com justify spending an extra $499,975.63?

And, let's pretend that domain names DO matter anymore, which again, they don't, but let's pretend. Then this should have been used as a reason to come up with a new, different, and unique name for their application.

Again, they're not selling diapers. Supposedly they are going to REINVENT THE WAY WE CONNECT WITH PEOPLE.

Seriously? You're going to reinvent the way we connect with people but you can't think of a creative name with an available domain so that you can hire another four software engineers to, you know, work on your awesomesauce?

Call me skeptical.

The investors in Color should be worried. Not because version 1.0 sucks. Not because people are making fun of their investment. But because the people they gave their money to are acting as if they have absolutely no regard for the opportunity they've been given.

And, they're already indicating that when a problem arises, they're going to attack it with the blunt instrument of more capital, instead of the creative labor that today's successes require.

That can only last for so long.

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Update: I was reading some of the comments and just noticed that I didn't link to the Tech Crunch article that referenced the domain prices. Updated, and sorry about that.

From the SignalKit blog

I've been writing a fair bit over on the SignalKit blog this week, so I wanted to post links to some of the articles over there. I'm trying to find the right balance between what goes up on the SignalKit blog versus what I post here; I'm not sure I've got it quite right, but I'll keep working on it.

Why Profits Matter: An article about how profits liberate individual business owners.

Is there a Rails Bubble?: Wondering how the current tech bubble will affect the Rails community in particular, if at all, when it bursts.

Could Facebook be Priceless?: Questioning whether we should be valuing Facebook like a piece of art as opposed to a business with normal revenues.

Strength isn't in numbers

I was at South by Southwest last week in Austin for the annual tech party. It was an absolute blast, and was the first time I've made it down there for the event. I know I know, I'm all late to the party.

What struck me though was the general feeling that there were a bunch of people just running around trying to meet as many people as they possibly could. Companies throwing parties with open bars to get as many people in as possible. People trying to get into the most happenings events. And everyone texting with someone they're going to meet up with, while talking to to the people they just met up with, after texting with them while they were talking with someone else.

The point for most people when it comes to networking seems to be to sell them on some product, or service, or to get them to use your web app, or to check out your super awesome API, or to raise money, or to find the next hot startup so you can give them money and then make a bunch of money.

But most people, it seems, are just trying to meet as many people as they possibly can.

I have come to believe that we'd all be a lot happier, and more successful, if we simply looked at business as the context through which we formed meaningful relationships. And from good relationships, good things in general tend to happen.

And while with this perspective, getting some form of help, or sale, or user, or funding, can't be the goal, I simply now understand and am aware that it is often a happy side effect. Let's look at some pictures to understand why.

This image above is how pretty much 99.9% of people network. They want to meet as many people as possible. Awesome, they think, I worked really hard and talked to a lot of people, and surely something good will happen. Problem is, they're also likely to be pretty weak connections.

How do I know this?

Easy. Ask yourself of these 30 connections, how many you would trust with your most important project, or client, or partner, or with your money?

They feel the same about you.

Now, let's look at another image. In this one, let's say someone made 3 really great connections, or truly strengthened existing connections. And, that these three people also did the same thing. These are people you didn't leave for the cool kids party. Or someone that sat and had coffee with you for an hour. Or someone who's web application you tried out, not because you had a web app problem that needed to be solved, but because you liked them personally and you wanted to see what they made.

In this image, I go only three levels deep. Do you know someone that can build my site? No, but I know Tom knows a guy. Three levels, that's it. And they trust each other, and vouch for each other, and they would put someone THEY NEVER MET on their project, or give them money, or recommend a client.

Why? Because their friend said they were good people. Done.

There are fewer direct connections, but the ones that do exist are strong, and, there are MORE people that you're connected with.

And we help our strong connections. Not because we expect anything in return, but because people usually like helping other people.

This isn't new, and this idea has been written about extensively as it relates to how companies leverage social media to reach new customers. The companies aren't selling, their customers sell on their behalf to their friends.

The irony though is that it seems the early adopters of social media are the very people that don't apply this lesson to themselves, and the way in which they network. They have so many "friends" that they can't possibly spend the time that's needed to actually curate their relationships.

Strength isn't in the number of our contacts, it's in the quality of our connections. Something to think about next time you're out networking trying to get someone to hear what you have to say.

Podcast Episode #9: Nate Kontny of Inkling Markets

I had the pleasure yesterday of Interviewing Nate Kontny, one of the founders of Inkling Markets, and co-creator of Tgethr and CityPosh, for my latest podcast episode.

Nate is one of my favorite bloggers, super intelligent, and a really nice guy to boot.  I had a blast talking to him about starting projects, running a business, and the creative process that goes into building software and writing great blog posts.

As always, you can listen to the podcast right here (just give it a moment to load), or by subscribing to the podcast in iTunes.

You can follow Nate on his personal blog, the Inkling Markets Blog, or on his twitter handle.

Thanks again for the time Nate, it was great talking with you!

Lastly, thanks to the Smashing Pumpkins for making their music available. I used "Lightning Strikes" as the intro and exit music for this episode.  You can check out what they're working on at their site SmashingPumpkins.com

 

Anti-Idol

One of my guilty pleasures is watching American Idol. I like it, not even necessarily because of the music, but because of the competition of it all.

I love watching people compete for something they care about so much. It's the same reason I like the Olympics, and the playoffs of pretty much any sport. Watching people compete is something that really gets me going.

What's fascinating though is that the world we live in today is actually the complete opposite of the one in which American Idol thrives. And you can understand the power of the internet and the way it works by simply looking at it as the antithesis of American Idol.

Idol is all about getting through the gatekeepers, just to get a chance to reach your audience. First you audition in a city with tens of thousands of other people. If you make the gatekeepers happy in that round, then you get to go to Hollywood to try and get through the gatekeepers again.

Then, if you get through those rounds, you're given a chance to perform directly in front of your audience, but not without the gatekeepers first having the opportunity to influence what they think about you with their commentary.

Then, as you progress through the rounds, you actually have to start doing things that are going to displease your original fans, the ones who got you this far, because you need to start appealing to a wider audience.

Stay too unique, don't get enough mass appeal, and you're gone.

What kills me is that every single person that made it through their first audition, and likely a lot of people that didn't, could probably make a living by singing if they were willing to spend a lot of time, energy and work building an audience on their own.

Yet they willingly give the gatekeepers full authority over whether they're going to be "successful." And in the end, even if they do win, they are sort of owned for a while by a record company. Maybe great. Maybe not.

There's nothing inherently wrong with wanting to be "American Idol" of course, but only if the people that are competing look at it as one of the many things they're doing to build their audience.

I don't know, but I would suspect a large majority of people that get booted from the show end up feeling like they have to give up. As if they've missed their one big chance and now they have to alter their dreams.

Nonsense.

Instead, each of us has the opportunity to bypass all the gatekeepers and go directly to our would be fans. Of course, there's no pre-built mass audience. There's no machine interrupting the people we want to reach in hopes they'll pay attention. There's no overnight success. No-one, let's repeat this a few more times, NO ONE, becomes an overnight success on the internet.

Instead, in the Anti-Idol world, things need to be curated, cared for, refined, and built slowly over time. But the result of those efforts, if one is able to persist, is a solid foundation upon which an entire career can be built.

I hope the people that audition for American Idol know this. Because as easy as it is to make fun of the show, there are real people, with real talent, with real dreams that are trying to do something with their lives when they audition for the show.

And that should be celebrated. Because putting ourselves out there, taking a risk, and having the guts to share our creations is exactly what we need to do.

But we don't live in a world of gate-keepers. Not anymore. Not unless we choose to.