5. Color App Raises $41 Million, Does Nothing Afterwards

Date: March 21, 2011

Serial entrepreneur Bill Nguyen seemed to be light years ahead of the social media game when he formed Color—a smartphone app that created social groups around photos you take on your phone and your current location. Nguyen miraculously managed to pull in $41 million in venture capital funding, allowing him to hire a team of world-renown engineers lead by LinkedIn's former chief scientist, D.J. Patil. Color was tagged to become the next Facebook or Twitter. But it wasn't. With a confusing launch and no business model, Color left no impression whatsoever on today’s social media market and is considered a sign of when hype goes wrong.  The company has now shifted direction and transformed Color into a video-sharing app.