Every new feature starts with a test. The main objective of this test is to focus on requirements and code design before writing the code. A test is a form of an executable documentation and can be used later on to get an understanding of what the code does or what are the intentions behind it.
At this point, we are in the red state since the execution of tests fails. There is a discrepancy between what tests expect from the code and what the implementation code actually does. To be more specific, there is no code that fulfills the expectation of the last test; we haven't written it yet. It is possible that at this stage all the tests are actually passing, but that's the sign of a problem.