The Apple note is just a one part of a bizarre story outlined in the court filing below. The document also contains jarring accusations leveled by Color’s cofounder, Adam Witherspoon, against CEO and founder Bill Nguyen. In his suit against the company, Witherspoon accuses Nguyen of retaliation and causing him emotional distress.

The details are pretty awful: Witherspoon accuses Nguyen of  ”creating an extremely hostile, unsafe and harassing atmosphere” and of bringing an “armed crony” into the office to intimidate anyone participating in an internal investigation into Nguyen’s alleged misuse of company funds. He also says Nguyen ”threatened violence against Witherspoon’s young son,” and blocked Witherspoon’s job opportunities at Apple when the company was sold.

There are a lot of other accusations as well, including Nguyen pressuring an employee not to file a workers’ comp claim, of Nguyen beating his children, and monitoring Witherspoon’s child’s behavior at school and through a counselor — it just gets weirder as you read it. The accusations are just another chapter in Color’s increasingly bizarre history.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Forecast: Tablet App Sales To Hit $8B by 2015
• How consumer media will change in 2013
• The state of cross-platform media measurement

And yet, the man is unfazed. Here is what he told Liz Gannes:

Running a start-up is like eating glass. You just start to like the taste of your own blood. We are iterating on our approach… Airtime is finally getting around to some of the bigger ideas that got me interested in this project in the first place… Now is the most toxic time ever in Silicon Valley…Startup team are always in flux, so like all startups we’re always talking to candidates for various key roles… At this point nothing definitive has been decided….It’s only 12 weeks from launch…I’ve only been running the company since March.

I added up all those random quotes from Gannes’ post so you can see what he is saying: absolutely nothing. Airtime really is a house of cards standing on a handful of matchsticks. The company has 10,000 monthly active users — and that is generous by any stretch of imagination. There is a steady exodus of executives, co-founders and smart people. Madness, I say!

And no, it is not just an opinion. I have talked to folks intimately familiar with the company and have heard similar stories Liz has outlined in her post. Parker in the past has attached himself to working and growing concepts, most famously Facebook and lately with Spotify. His talents helped those companies, but frankly, starting a product from scratch and building into a have-to-use fast growing service is easier said than done. In other words, let’s just face the facts: growth happens, for inexplicable reasons and you can’t draw it on a whiteboard.

Airtime suffers the same malaise as Color, the other liberally-funded startup: they don’t really solve a problem that is acute or hasn’t been solved before. Sarah Lacy in a post about Color wrote:

People no longer get told what products to use in a Web 2.0 era, they use them and spread them to their friends if they’re good. Color wasn’t– as was evidenced by its two-star rating. Money and grand articulations of a vision can’t shortcut that. The Web has become too crowded and users are too smart.

She might just be writing about Airtime. If Color’s Bill Nguyen boasted about the $41 million he raised from Sequoia Capital, then Airtime talked about its $33 million in funding, celebrity launch event and bold claims that sounded hollow from day one.

I didn’t really see what Airtime was for when it launched — I am sorry, there are already many tools that do a better job than that service. Skype, Facebook and Twitter – they were like nothing before and hence they grew so fast and swept the world. They were communication revolutions and the consumers rewarded them with attention.

For now, Airtime wants to be a next generation Skype! Sure, and I want to be a latin lover. The fact is that in today’s attention starved world, if you miss the chance to make an impact, the world moves on to something new. It doesn’t matter who you were, how great your resume is and how many billions you have in the bank.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• NewNet Q1: Content Farms and Niche Networks on the Rise
• Startup growth and the new recruiting ecosystem
• Defining work in the digital age: an analysis by GigaOM Pro

The report said that CEO Bill Nguyen has been absent from the company for months now, and that others had taken over his responsibilities while he was on frequent vacation. The story also said Color would be going through a product pivot soon, although Nguyen denied this was the case. Color has not responded to a request for comment. Before founding Color, Nguyen sold his music-sharing service LaLa to Apple in 2009.

VC firms including Sequoia Capital invested $41 million in Color before the product even launched in March 2011, raising serious questions about those investments and what kind of impact the photo-sharing app could have. Investors loved the product, but users were less sure, and it had trouble gaining traction, as Om Malik wrote: “I downloaded the location- and socially-aware photo-sharing app, but found it as barren as the endless sands of the Sahara.” In September 2011 the company pivoted from a location-based photo-sharing site to one that let users to connect live photos and videos to Facebook.

Verizon partnered with Color in May to offer customers live video streaming options, but now more than a year after its launch, Color has largely faded from the startup landscape. Alyssa Solomon, Color’s former CFO and co-founder, joined CakeHealth in June, and others, including co-founder Peter Pham, had left last summer.

This morning, Pham tweeted his reaction, cc’ing another former co-founder, DJ Patil.

"No Comment" cc: @dpatil—
Peter Pham (@peterpham) September 28, 2012

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Controversy, courtrooms and the cloud in Q1
• CES 2012: a recap and analysis
• 12 tech leaders’ resolutions for 2012

The exclusive partnership is just the first step for Color, which will later this year embed its app even closer to the hardware of Verizon’s 4G phones, allowing users to broadcast in live 720p at first and potentially 1080p in about a year. Users will be able to pick out particular frames from the video that can be shared as photos. That, said Color’s CEO and co-founder Bill Nguyen, will enable users to experience live moments in high-quality video and will change the way people think about sharing through pictures and video.

“What you really want to get to is a point where the video camera can show what you’re seeing and act like a teleporter for people,” said Nguyen, who sold his previous start-up Lala to Apple.

30 seconds of live video

Color launched in March last year as a proximity-based photo-sharing network, but the service never caught on, in part because it was trying to create a new network for people to use. The company changed course in September, announcing that it was integrating its app into Facebook. That’s when it showed off the ability for users to share 30 seconds of live but silent video to their friends, who would get notified when a user was broadcasting live. Users can view live video on Facebook or their Color app or they can come back to the video and view it if they missed it live.

Technically, anyone with a 3G or 4G Verizon phone will be able to make use of the enhanced Color features. The app is available in the App Store or Google Play or users can call “COLOR” on their phones and get a text message link for downloading the app. Verizon is looking at pre-loading the app on select phones.

Showing off the network

Verizon’s strategy is to highlight examples of what faster 4G wireless networks can allow people to do, reminiscent of the work the carriers did to show off 3G networks years ago. And it’s also harkens back to the big push Verizon gave to the Droid lineup of phones, which became a big seller thanks to Verizon’s marketing muscle. There should be lot of similar marketing support for the Color integration as well.

Lewis said we can expect more partnerships in the future aimed at highlighting Verizon’s network. The company last year opened an app innovation center in San Francisco to encourage more app development.

Photos vs. video

Nguyen said he was inspired to reach out to Verizon because of the emergence of high-end video cameras like the RED digital camera, which can shoot in 4K and can produce high quality still shots as well. That helps solve the question of how to capture moments because one device can produce both video and stills, he said. Since photos are still preserved, it opens up the potential for live video to become more of a unit of sharing. Ultimately, he believes this type of live video will displace pictures as the way we preserve moments. This is what Nguyen wrote in a blog post about the news:

There’s something special about live. It’s spontaneous. You never know what to expect so you watch in anticipation. Live is also shared. A feeling of community, you’re experiencing something in real-time with other people. Family reunions, concerts, or ball games, we come together for live moments.

Questions ahead

There are still a lot of questions to be answered. It’s unclear which phones will get the deeper integration of Color, though it will likely be quad-core Android devices. It’s also not how Facebook will feel about the upgrades to Color, which will mean a lot more storage of videos and pictures. Also, we still have to see how well Nguyen and his team of 50 engineers can pull this all off. Lewis said some of the more ambitious plans are somewhat experimental so there’s no guarantee that it will happen exactly like Nguyen is describing.

But it’s still an intriguing future that Nguyen is proposing. I’m personally interested in sharing more live video but I’m not sure I’m ready to have that replace photo sharing. With photo sharing, I get to self-edit and choose what images go out. Live video sharing means you don’t know what people will see at the end of those 30 seconds. It could be completely boring or very embarrassing. Of course, you can choose to delete after broadcasting. But the idea that we can move to a model where the distinctions between video and photos get blurred has a certain logic to it. Why capture just one or the other when we can capture both?

If this works, this could be a big turnaround for Color, which still hasn’t shed its rap as an overhyped bubble startup with its $41 million in funding. Though Color still has a lot to prove, its second act is proving more promising thanks to a big assist from Verizon.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• LTE-Advanced: what it is and isn’t
• Mobile Q4: The scramble for spectrum continues
• LTE changes everything; LTE changes nothing