Conversation with Sam Altman from Loopt

The 25-year-old co-founder and CEO of a mobile platform software company talks about Facebook Places, Apple’s iPad, and the challenges of convincing small businesses to advertise.

December 29, 2010

The 25-year-old co-founder and CEO of a mobile platform software company talks about Facebook Places, Apple’s iPad, and the challenges of convincing small businesses to advertise.

Location Services is a $ 1.9 billion business that research firm Gartner predicts will hit the $ 3.8 billion mark by 2012. Since its launch in 2005, Loopt, a pioneer in software that allows people to find each other on cell phone maps, has competed mainly with other similar startups such as Foursquare Labs and Gowalla.

Conversation with Sam Altman from Loopt   Today, the Mountain View-based, California-based 45-employee company 11 Harsh Facts About Entrepreneurship comes face to face with a monster of half a billion users, Facebook, which launched its own geolocation service on August 18.

Sam Altman, 25-year-old co-founder and CEO of Loopt, was recently interviewed by Bloomberg reporter Anton Gonsalves about how his company, which serves 4 million users and has over $ 17 million in venture capital, is responding to Facebook’s innovation, why the iPad is from Apple is unlikely to have much of an impact on Loopt, or the difficulty of convincing small businesses to advertise. Further – excerpts from their conversation.

Anton Gonsalves: How did you internally react to the news that Facebook is preparing to launch its own location service?

Sam Altman: They talked about this before, rumors circulated for about two years, so my reaction was this: finally, people will stop being interested in this and asking me a bunch of questions. And then I thought, “Wow, this is getting scary, but if we play the cards right, it will take us to the next level.”

How will Facebook change the marketplace?

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It will be the best event ever for Loopt. Facebook will bring information to a wide range of people who have never heard of such services before. Considering that Facebook plans to become a platform for the entire global network, now the amount of data to which we have access has increased 100 times. Whereas before we could show you where 11 of your friends are, now we can show you where 110 are. Thus, Loopt will offer unique services based on what Facebook has to offer. It would be suicide for everyone in the industry not to integrate with Facebook, so I think over time, everyone will. And here the question already arises, which of us will be able to offer users the most valuable and differentiated services based on these minimal basic data.

Do you plan to integrate with many web platforms in the future: today with Facebook, tomorrow, perhaps with Google – and become an information aggregator?

According to our forecasts, it will be Facebook that will become the dominant platform, while Google still mainly specializes not in social. Social rating is dying out? services. We will collect information from many different sources to provide you with the most accurate information about what is happening around you. However, I still cannot say exactly what role Google will play in this.

Do you think tablet computers like the iPad will have a big impact on the location services market?

I don’t think that much. In my opinion, tablet computers are a big trend and they will play a very important role in the industry. But location-based service is especially useful when you are away from home and have a cell phone with you. You can’t put a tablet in your pocket, so many people don’t carry it with them everywhere and always. So I am confident that the basic form of service delivery will remain the same, that is, via a mobile phone.

What challenges do you face when inviting local businesses to advertise on Loopt?

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The most difficult thing is simply to convey information to them. Imagine a small family business, a company that may not have a computer, much less an iPhone. How do I get my message across to them, how can I convince them that they need it?

The second problem is how to find out that the person who sent me a letter and wants to advertise really has a business at the specified address. How can I be sure that the person who contacted me to offer a 25% discount at the restaurant is really the owner of the restaurant, and not his competitor who wants to harm. We are still in the process of developing our strategy, but we are definitely not going to hire hundreds of sales agents. It will be a more automated process.

Why haven’t location services like Loopt become popular with people in their 30s? Why isn’t the mainstream consumer audience interested in the new technology?

Very often people over 29 who do not trust new technologies make two mistakes. They exaggerate the negative aspects. They cannot clearly explain why it is so bad to have a photo on the Internet – they are simply uncomfortable with the thought of it, and therefore they underestimate the benefits. They do not notice the positive aspects. As the next technology becomes more popular among young people, the older generation takes note of it, begins to try it out a little, and, in the end, also masters it. We’ve seen this already with five or six technologies on the Internet: instant messaging, photos, and now location services. Over the past six months, we have seen an upward trend in the average age of our users.

In your opinion, is there a difference in privacy settings between younger and older users?

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Young people most often share their location information with a large number of people. For the average youth, the default setting would be “I will share with everyone but a few people I block.” The older generation tends to share their location with fewer people. Their default setting is “I will block everyone and then give access to a few people.”

Why such difference?

Young people feel more at ease in the world of modern technology. We are the first generation to grow up in the Internet age. We don’t know how else it is – we just got used to it. It is also important for us that our friends know where we are. It is important for us to know more about our friends. And I don’t even know why this is.

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