[wpietri]

You're right; that was probably the investor perspective, plus a slick sales job with a handwavey Big Idea (local! mobile! social!) and some hockey-stick curves. Pattern-matching and all that. But it's a little depressing that people will hand over $40m for that.

The core hypotheses could have been tested for far less. Indeed, the co-founders had enough dough that they could have tested them without VC involvement at all. There was no need to take investor money until they needed to scale.

Seems like a classic example of the Silicon Valley hype cycle, and the sort of idiocy that was a big feature in Bubble 1.0. "Internet! Shopping! Groceries! Can't miss!" And then we got WebVan. But I suppose Color should get some credit; they only blew tens of millions of dollars, not the $1 billion WebVan pissed away.