"The premise was to create a mobile social network of people you didn't know, rather than ones you already did. Nguyen believed Color would be the Facebook killer."

I have a theory that conflicts with his thinking. If an app connects people it will trump an app that requires people to physically connect themselves. My test for this is "does this app work for users coming from a rural setting?". Facebook works amazingly well because it connects people. Color works horribly. Your app can be profitable and cool not working in a rural area, but it won't be a Facebook.