Loopt CEO: Turning the Deal Around
When Loopt introduced its new U-Deals program earlier this year, our guest columnist, Doug Stephens hailed the concept as a “profound” shift in the consumer dynamic. Instead of the classic daily deal, U-Deals allowed consumers to actively seek the deals they wanted, and round up friends through social media to share with them. “All of this hints at the potential for consumer buying groups that could potentially hold significant sway over and possibly even disintermediate certain smaller retailers entirely,” wrote Stephens.
Loopt, which has been around for years, is of course much more than a deals service. It’s a proximity-based question-and-answer service that seeks to connect people with each other and with the places aorund them. The company has more than 4 million registered users, and it recently announced that it has had more than 50,000 location-based questions asked and answered.
Street Fight recently caught up with Loopt’s founder and CEO Sam Altman to talk about U-Deals, location privacy, and where he sees location-based services headed.
Tell me a little bit about where Loopt is these days.
We’re very focused now on connecting users to the places around them. We started off by connecting users to the people around them, and we always said that the other half would be this sort of magic service on your phone that tells you what’s going on around you and helps you have a better experience. This requires both people and places. So we’ve really been focused on the places half of that.
We’re doing stuff there that I’m very excited about. [We’re about to release our take on local recommendations]. This came from the observation that when people are at a restaurant, they want to know how they can have a better experience there — what they should order, best deal, things like that. Also, it’s easier to contribute and do the content if it’s structured.
It’s little mini polls like: “What’s the best drink at this bar?” “What’s the best entrée at this restaurant?” “What’s the secret at this whatever.”
Are these polls of people who are there within a day, or are the recommendations ongoing?
We’re working on something like that, but as of today it’s all time.
When you started Loopt, how did you envision its utility, and how is your business different now?
When we started, there was no iPhone. So the biggest difference from where we are now and what we envisioned is we were envisioning it on these sort of crappy phones. But we knew then that location is what makes the phone different. Mobile location is going to connect the real and virtual worlds. That guiding vision is as true now as it was when we started.
What was the principle behind Loopt’s U-Deals?
It was that a lot of people have solved the supply side of deals, and we can’t compete with those people because they’ve got gigantic sales support and we don’t. But no one has really solved the demand side of the deals. Users often want the deal in a place that is not offering one. And, businesses love word-of-mouth — they want to enable their best customers to be big advocates for their business. So really, the idea was, can we let our user base self-organize and really become our sales force, and give them what they want — which is to save at their favorite places.
A lot of people have solved the supply side of deals, and we can’t compete with those people because they’ve got gigantic sales support and we don’t. But no one has really solved the demand side of the deals.
I think it’s an interesting direction in the deals space, because there are a few really key advantages — the biggest of which I think is setting up this list of daily deals hunters, it’s sort of user-to-user. And there’s this community — like “if we banded together, we could net this deal,” or I could tell you that I’m endorsing this deal and I want to get it.
U-Deals are presumably about customers who already know a business (or know it enough to want a deal). Does this still create customer acquisition the way that Groupon claims to for merchants? Or is it more of a customer loyalty play?
We’re working on other stuff with loyalty, but this actually really is about new customers. Clearly, the customers who request the deal tend to know the place really well already. But we’re being fairly aggressive about getting those customers that request the deal to share it — they take ownership of the deal and then they go on social media sites like Twitter and Facebook and they’re posting the deal and telling their friends: “Hey come check out this place, maybe we can plan on meeting together and we can all get this deal.” It is new customers, but it’s really empowering new customers, because instead of just going out to this large list, it’s coming from a friend.
What do you think is the big thing for location-based apps?
I think it’s data mining. There’s all this data being collected, but no one is really taking advantage of it. We call this the life-graph concept, this set of all the places you ever go. And we believe pretty strongly that … there’s lots and lots to learn from that. I think analyzing that location data is going to be really interesting.
Are people letting their guard down a little bit more about location data and privacy?
I think people are getting more and more comfortable, but I think there was this initial visceral reaction of: “I would never share where I am with anyone. That’s just so private.” And I think people actually make very rational decisions about value versus privacy. I think like you’re already starting to see more and more people become more and more comfortable with this than I expected.
If the government started doing this without warrant, with disregard to people’s privacy, I think yes, people would have a problem. If governments sort of do it in the same way that for a long time they’ve done wire taps with warrants or whatever, then I think it will just feel like the normal course of action.
This interview has been edited for length and clarity.