Apple Alumnus Rejects Online Anonymity With New Social Network
Lala Founder Bill Nguyen
David McNew/Getty Images
Lala Founder Bill Nguyen.
Lala Founder Bill Nguyen. Photographer: David McNew/Getty Images
Bill Nguyen, who sold an online- music company to Apple Inc. (AAPL) in 2009, has a new startup with a different mission: making the Internet less of a haven for anonymous bullying and websites secretly tracking users.
The Internet wouldn’t be as “creepy” if more people were upfront about their true identities, Nguyen said. So he developed a social network called Color that’s completely transparent. Every time users turn on the application, which runs on smartphones, they will be able to see a live feed of all the pictures and videos of fellow users within 150 feet.
With Color, which debuted yesterday after raising $41 million in venture capital, there are no friend requests or privacy settings. By starting the app and entering their names, users are agreeing to share. Nguyen -- whose last company, Lala, was bought by Apple -- says that proximity and transparency will lead to more accountability and civility.
“I want you to say hello to your neighbors,” Nguyen said. “A lot of the things that have been recreated online have been virtual reality.”
Color, based in Palo Alto, California, opens up a new front in the debate over openness on the Internet. Facebook Inc. asks members to use their real names, making it harder to lash out incognito and bully people. On the other hand, advocates for anonymity -- such as Christopher Poole, the creator of message forum 4Chan.org -- say secrecy lets Internet users express true feelings and take creative risks.
Not Really Private?
Nguyen is trying to blaze his own trail. He wants people to reveal their real identities, though without using the kind of advertising on Facebook. On that site, marketers target their ads based on personal information from users, he said.
“They say it’s private, but it’s really not,” Nguyen said. “That disturbs me.”
Color says it’s developing an advertising system based mainly on location, rather than personal attributes. The ads would be like Groupon Inc.’s deals, offered by nearby businesses.
Nguyen has a track record of successful startups. Before creating online music service Lala, he started e-mail service Onebox, which was acquired in 2000 by Phone.com. After that, he began another e-mail company called Seven Network Inc., where he’s still on the board of directors.
His new service, which will be available on iPhones and Android devices, will need to build a critical mass of users to succeed, Nguyen said. The application will work best if groups of people are participating in the same area at once, and that may be hard to achieve, he said.
Venture Funding
Color’s venture financing includes $25 million from Sequoia Capital, a backer of Google Inc. in 1999. Sequoia partner Douglas Leone is joining the board. Bain Capital Ventures contributed $9 million, and Silicon Valley Bank provided $7 million, the company said.
Color has about 30 employees now, including engineers from Google, Twitter Inc. and Apple. Nguyen expects to double or triple that by the end of the year. DJ Patil, the chief scientist at LinkedIn Corp., has joined the company to build out its networking features.
The software works by taking advantage of technologies that are built into most smartphones. Color can determine when people are near each another by using the global positioning system, audio waves and cameras. If two phones are picking up the same ambient light and sounds, they may be in the same place.
‘Bit of Voyeurism’
When people are in the same vicinity, the application will unlock pictures, videos and text entered through the application.
“It’s a little bit of voyeurism -- it’s a little bit of real life,” said Michael Krupka, managing director of Bain Capital Ventures, who also invested in Lala.
Pictures taken outside the application aren’t visible to others. It also has a block feature if a person doesn’t want to see or be seen by somebody else.
Nguyen recently showed off the technology at the company’s office, a remodeled toy store that has a skateboard half-pipe in the basement. He was standing in an open area, wearing a bodysuit made out of a sleeping bag. Employees laughed and snapped pictures on their iPhones.
After taking the shots, they instantly scanned their phones to see the various pictures. Each person is able to keep the photos taken by others. Color developed an imaging algorithm to crop all photos around the face of the person who’s the subject in a photo.
Sharing Cameras
“Every camera around you that’s using the same app is yours,” Nguyen said. “The communication is real time. It’s not like posting up your holiday photos.”
For those who don’t behave, Color’s terms and conditions allow it to block the app from working on a specific smartphone. A new device would be needed to start a fresh account. Unacceptable behavior includes violence, bullying and pornography.
After the Lala deal, Nguyen stayed at Cupertino, California-based Apple for about a year. He said he learned a lot from that experience, including the kind of secrecy embraced by Chief Executive Officer Steve Jobs.
Even as he campaigns for openness online, Nguyen has kept a tight lid on the company until now. He required employees to sign offer letters before telling them what they would be doing. Brown paper covers the windows of the office, making it seem like vacant space.
Corporate secrecy aside, users in the social-networking realm need to consider whether they’re better off with a more open system, Nguyen said.
“I want people to talk about whether it’s more fun, more safe and does it feel better to be part of community when I’m open,” he said. “It’s the open-versus-private conversation.”
To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.
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