Rafael: Sam Altman. Nineteen years old, he turned down Goldman Sachs. Just... nineteen.
Katya: Goldman Sachs? For a nineteen-year-old? That's, that's huge. A really big deal.
Rafael: He drops out of Stanford, too.
Katya: For what?
Rafael: This app.
Katya: Location sharing?
Rafael: Yes, 2005.
Katya: In 2005? Like, you want to... find your friends on a map?
Rafael: Exactly! 2005. So, you're thinking, "I want to see where my friends are," yeah? But the phones... back then, they have no GPS. They don't even have an app store! It's, like, feature phones. And he takes, what, six thousand dollars from Y Combinator, the very first batch, to do this.
Katya: This is like... trying to build a rocket ship. When you don't have gravity. Or fuel. Or... a rocket.
Rafael: Yes! Exactly! It's... it's wild. His thought, he's like, "my phone knows where I am, why don't my friends know?" And the idea, it's, you know, brilliant. It's Loopt. But the infrastructure? It just... it wasn't there.
Katya: So they're trying to make this app. To show your friends on a map. But the phones are, what, little bricks? With no real internet. How did this even... how could it work?
Rafael: How did it work? They made deals with carriers.
Katya: Which ones?
Rafael: Boost Mobile, Sprint.
Katya: On feature phones?
Rafael: Java app. It's not real-time, because of battery, data limits. It just... polls your location sometimes. Periodically. And you have to, like, opt in your friends. It's very... cumbersome.
Katya: Periodic polling. So... not really "real-time," then. You would see your friend at the coffee shop, yeah? And by the time you arrive, they are already at the grocery.
Rafael: Precisely. But, Altman, he... look, he even demos Loopt at Apple's WWDC in 2008. One of the very first apps shown for the App Store. This is huge! And now, with the iPhone, they finally have, like, continuous GPS. Real-time updates. It's the product he always... imagined.
Katya: So this is their moment! The iPhone is here, the market... it's ready. They are pioneers.
Rafael: It should be. But then, only six days after launch, the app... it sends unsolicited SMS invites.
Katya: To address books?
Rafael: Yes.
Katya: No.
Rafael: Instant privacy backlash. Can you... can you believe it?
Katya: Oh. That's terrible. That's... the worst. You build all this trust, then... then it's just... poof. Gone.
Rafael: And it gets worse, Katya. While Loopt treats location sharing as passive, right? Always-on. This new company, Foursquare, it launches, 2009. And they make location sharing... active. With check-ins, game mechanics. That's, like, that's what people want.
Katya: So Loopt spent... all these years, educating the market, burning through money. And then the real race, it just starts, and they are... what, exhausted?
Rafael: Exactly my point. They were... what's the word? They were just too early, no? The vision, it was perfect, I think. But the timing... the timing was just impossible. Like my friend from college, you know? He tried to build a 'Spotify for textbooks' in, what, 2008?
Katya: Oh, that's a good idea. Still, still today.
Rafael: Right? But the publishers, they wouldn't license the content. And the students, they didn't have iPads yet. He just... burned out. The idea, it was perfect. But the world... it wasn't ready. Loopt was... exactly the same.
Katya: I hear you, Rafael. And I agree, timing, it's everything. But they burned through, what, close to forty million dollars? Over seven years. Forty million! And the article says they had, what, maybe four, five million registered users? And with very shallow engagement.
Rafael: But that's because they were always fighting against the current, no? If the platform isn't ready... you are constantly trying to force something that just doesn't fit yet. The money, it just disappears into, like, educating a market that... it doesn't even exist yet.
Katya: But Foursquare still had to build from the ground up, no? And they succeeded. If Loopt had the perfect idea and just had to wait for the market... why didn't they pivot, or conserve cash, or... something else?
Rafael: Hmm, but...
Katya: Forty million for shallow engagement, for me, this is not just bad timing. This is also some... how to say... execution problems.
Rafael: Foursquare came after the iPhone, after the App Store was, like, mature. After privacy issues, they were understood, no? After Loopt had already shown people what location sharing could be. It's like... they were building the road, and Foursquare just... just drove on it. They didn't have to build.
Katya: Okay, that's fair. But still, the article mentions they kept broadening their product strategy.
Rafael: Expanding, yes.
Katya: Yes, adding reviews, social gaming, integrating other databases. It sounds like they were searching for... for a use case, no? Not just waiting for the world to catch up to their perfect vision. If the market was just going to arrive, then why all this... (beat) ...this searching?
Rafael: Maybe they had to try everything, no? To stay alive, to find something to make people use it while the technology caught up. It's a tough, tough spot to be in, my friend.
Katya: It is. It is a tough spot. And in the end, it was acquired for... what was it? Forty-three million dollars, I think? Which the article calls, like, "near-breakeven" for investors. So, not a total loss, but not a world-changing success either. It was... more like a stepping stone for Altman. Who then, of course, went to YC.
Rafael: Yes, a quiet end, for sure.
Rafael: I'm Rafael.
Katya: I'm Katya. This has been Startups RIP's Station.
