Color - mobile video - wireless startups - Fierce 15 2012

Where it's based: Palo Alto, Calif. 
When it was founded: 2010
Website: www.color.com

Why it's Fierce: Founded by serial entrepreneur Bill Nguyen (formerly of mobile email company Seven and cloud music service Lala), Color was originally launched as a location-based social networking app that would take on Facebook. With $41 million in funding, including $25 million from Sequoia Capital, the company's launch was unimpressive, leaving users dissatisfied with the app.

Color has since revamped its original vision to become something that we think is even more compelling. Instead of a social network a la Facebook, Color is touting itself as a video broadcasting app that allows users to share video content via Facebook, Android and iOS.

Last month, Color unveiled a new multi-year partnership with Verizon Wireless, providing Color's live video and audio capabilities exclusively to Verizon (NYSE:VZ) LTE customers. The app will come preloaded on Verizon LTE devices. The deal seems like a win-win. Verizon wants to tout the speed of its new LTE network and Color wants to demonstrate the ease with which customers can share 30-second live clips with Facebook friends.

At the recent CTIA Wireless 2012 show, Nguyen was the star of the Verizon media party, showing off the Color app to all the media at the event. Nguyen said that the company has doubled its size and now has 60 people working on the Verizon initiative.

But when asked about the business model--how Color will make money--Nguyen was less revealing. "I'm just a product guy," he said.

Having the backing of Verizon Wireless is certainly a win for Color. But it doesn't guarantee that all LTE customers will use the app. Because Color transmits video over the network, it likely consumes significant bandwidth and might cause users to quickly use up the available data on their tiered plans.  

What's next: Color will need to build its traction with Verizon customers and prove that its app is compelling with users--lots of users. At the same time, the company needs to work to optimize its technology to make sure consumers are using as little bandwidth as possible to upload their videos.