Amid the news that Color was being acquired by Apple, there are some interesting angles about a startup that raised a staggering $41-million out of the gate to build a photo app.
Among them is how Color CEO Bill Nguyen was able to attract so many venture capital based on the fact he had started and successfully exited several startups before. With an impressive track record, investors were betting on Nguyen doing it again. But the harsh reality is success in the past does not guarantee success in the future.
That said, it is always curious to see the aura that surrounds entrepreneurs who been successful once. They’re regarded as startup superstars whose management skills, smarts and insight allowed to seize success and mega-riches, while rivals foundered.
This is the reason why entrepreneurs who have been successful at least once seem to have no problem attracting financial support for their next venture, seemingly irregardless of how much the potential it may have or the competition. I suspect it is based on the idea that investors don’t want to kick themselves if the entrepreneur hits another home run.
But is this misplaced hope?
Entrepreneurs succeed for lots of reasons. Sometimes, they’re great businesspeople. Sometimes, it’s a great product. Sometimes, it’s a great team. And sometimes, they get lucky.
But it doesn’t necessarily mean, their next startup is going to be a huge success, let alone modestly successful. In fact, I would suspect few entrepreneurs have a string of successes, even serial entrepreneurs. But this isn’t a surprise given startups are high-risk propositions.
One of the growing problems with the growing obsessions with entrepreneurs and startups is we’re guilty of building successful entrepreneurs into rock-stars who can create a string of hits. But the reality is there are a lot more one-hit wonders than bands that can put together a string of hits.
More: The New York Times’ Bits blog had a story looking at the struggles of Sean Parker’s newest startup, AirTime. As well, Jason Cohen has a post looking at Nguyen’s track record and how the VCs that continue to invest in his company are behaving rationally.