Apps Firm Keeps Customers in the Loopt

You've heard this story before.

A young computer whiz has an idea, drops out of college and changes an entire industry. Meet Sam Altman. In 2006, Altman, now 23, dropped out of Stanford his junior year to launch Loopt, a mobile application that turns your phone into a "social compass."

Altman was on his was to graduating in just three years with a degree in computer science when he had a simple idea: Open your mobile phone and see a map of where all your friends are.

"Loopt is really about using the location of your phone and other people's phones to connect with the world immediately around you," says Altman.

For example, Loopt recently released a new feature called Mix, which allows users to connect with new people nearby who share common interests and affiliations. For a conference attendee, this could help him locate an individual or company that matches his needs. Also, because Loopt geo-tags other users, a business owner could use Loopt to easily manage a fleet.

Altman didn't get Loopt off the ground by himself. He had four other young bright minds helping out: Nick Sivo, Alok Deshpande, Rick Pernikoff, all 23 years old, and Tom Pernikoff, 25. But even then it wasn't easy. Altman says phone carriers and the government were initially weary of an invasion of privacy for users.

"Even if consumers want it and consumers aren't worried about privacy, it looks like a big liability," says Altman. "So we had to spend a ton of time designing the product and working with the carriers to make them feel comfortable that we were (a) making this very opt-in, upfront of what was happening; and (b) designing features to protect privacy and safety."