Altman says Loopt to be profitable in 2009(bloomberg.com)
bloomberg.com
Altman says Loopt to be profitable in 2009
http://www.bloomberg.com/tvradio/ceo.html
21 comments
Everyone working mobile had this idea earlier in the decade. Most people working in the field knew that the biggest issue was going to be getting carriers to put this thing on their phone, not actually building the app itself. Sam Altman was young and inexperienced enough (i.e. not jaded) to push it through.
That said I wonder how loopt is going to respond to the Foursquare thing from the dodgeball people. Out here in early adopter land it seems like Foursquare is the new hotness and people consider Loopt a gay hookup application. Not that a gay hookup application is necessarily a bad market to be in...
That said I wonder how loopt is going to respond to the Foursquare thing from the dodgeball people. Out here in early adopter land it seems like Foursquare is the new hotness and people consider Loopt a gay hookup application. Not that a gay hookup application is necessarily a bad market to be in...
Everyone working mobile had this idea earlier in the decade.
Had it at the resolution of a one-paragraph text description, maybe. At that resolution, Google = Excite.
I also think you're doing Sam an injustice by attributing his success to youth and inexperience. Youth and inexperience are plentiful, but they don't seem to produce much except when combined with brains and determination.
Had it at the resolution of a one-paragraph text description, maybe. At that resolution, Google = Excite.
I also think you're doing Sam an injustice by attributing his success to youth and inexperience. Youth and inexperience are plentiful, but they don't seem to produce much except when combined with brains and determination.
Why can't it be both? Youth and inexperience may not necessarily mean attempting the impossible, like menloparkbum suggested, but certainly being youthful means having a better grasp on what's going on. So it's right to attribute part of his success to youth: he made a product that appeals to the youthful market.
Similarly, youth is a good reason to think that Foursquare could be a threat. The people making Foursquare have already created a successful product in this market. They spent a few years working for a powerful company that didn't understand their ideas. So they're the people who hit the market before Sam did, and they're returning with a more refined concept than they had before. The fact that they're youthful and determined is why I'm watching them and ignoring attempts like Google Latitude, which practically scream sterile.
Similarly, youth is a good reason to think that Foursquare could be a threat. The people making Foursquare have already created a successful product in this market. They spent a few years working for a powerful company that didn't understand their ideas. So they're the people who hit the market before Sam did, and they're returning with a more refined concept than they had before. The fact that they're youthful and determined is why I'm watching them and ignoring attempts like Google Latitude, which practically scream sterile.
There have been several startups doing the same sort of thing, all failing. I'm still not convinced people want this (Location aware social networking mobile thingy). It's a shame you can't get traffic figures so easily for mobile apps - without user/revenue numbers it's all speculation as to how successful or otherwise loopt is.
IPO seems like crazy talk to me.
IPO seems like crazy talk to me.
I don't use my cell for networking. I don't like that constant connectivity. But within that market, I would suggest that the Dodgeball team is a force to be reckoned with.
Perhaps I'm biased because Loopt is ugly as sin, and Foursquare is slightly better.
Perhaps I'm biased because Loopt is ugly as sin, and Foursquare is slightly better.
Someone as smart and determined as Sam could have made 10 million in any number of much easier ways. But the fact is that he chose to do it pretty much the most difficult way imaginable. This seems like inexperience to me, at least when you look at it from the perspective of a business person rather than the perspective of a hacker.
What's the error on your estimate of how hard what he's done is? Several hundred percent? A thousand percent? What are the alternative ways of making $10m that you casually assume to exist? And how do you know how hard each of them is?
How does the quote go? "It's easy to be rich if all you want is to be rich"?
If the goal is simply money, making it is not necessarily hard. There are many corporate positions that pay an obscene amount of money at the cost of being very dull. Somebody who enters a market with the goal of making money and nothing else is going to make a lot of money. Most of the routes available are much easier than the one that he picked, which requires a good idea and a lot of luck.
Alex was not slamming Sam's achievement. He just said that from a business perspective rather than a hacker's perspective, the hacker route to riches is very fraught and few people ever make it. You're an outlier, as is Sam, but statistically speaking, more people fail as hacker/entrepreneurs than fail as high-powered corporate lawyers or as cutthroat schmoozers. Even the moderate successes, like Sam (moderate being relative to, say, the people who created Facebook/Microsoft/Google), aren't particularly better-off than the people who merely submit to the system and work their asses off, so the risk doesn't pay a higher financial reward. The only reward is that of personal fulfillment.
If the goal is simply money, making it is not necessarily hard. There are many corporate positions that pay an obscene amount of money at the cost of being very dull. Somebody who enters a market with the goal of making money and nothing else is going to make a lot of money. Most of the routes available are much easier than the one that he picked, which requires a good idea and a lot of luck.
Alex was not slamming Sam's achievement. He just said that from a business perspective rather than a hacker's perspective, the hacker route to riches is very fraught and few people ever make it. You're an outlier, as is Sam, but statistically speaking, more people fail as hacker/entrepreneurs than fail as high-powered corporate lawyers or as cutthroat schmoozers. Even the moderate successes, like Sam (moderate being relative to, say, the people who created Facebook/Microsoft/Google), aren't particularly better-off than the people who merely submit to the system and work their asses off, so the risk doesn't pay a higher financial reward. The only reward is that of personal fulfillment.
"Big money isn't hard to come by. All it costs is a lifetime of singleminded devotion to acquiring it and making it grow into more money, to the utter exclusion of all other interests. They say that the age of opportunity has passed. Nonsense! Seven out of ten of the wealthiest men on this planet started life without a shilling--and there are plenty more such strivers on the way up. Such people are not stopped by high taxation nor even by socialism; they simply adapt themselves to new rules and presently they change the rules. But no premiere ballerina ever works harder, nor more narrowly, than a man who acquires riches."
-A Stranger in a Strange Land by Robert Heinlein
-A Stranger in a Strange Land by Robert Heinlein
"What's the error on your estimate of how hard what he's done is?"
I don't like to think of hard in terms of the time required, but rather in terms of the skills needed and the things that need to happen to make the project a success. If you break down any project into a PERT chart, the best projects are the ones where each circle is capable of being realized in multiple ways. Whereas if you look at Sam's PERT chart, there are clearly a number of steps that are a one shot deal, where if they don't work the whole thing falls apart. For example if you can't partner with any carriers then the project is dead, unless you go around the carriers in which case your risk (and cost of capital) goes up so your upside goes down.
"What are the alternative ways of making $10m that you casually assume to exist?"
There are lots of ways. For example, doing LBOs on your own you can easily make 2-3 a year. The only problem is that you need the skills to know how to do this, and there are only a few hundred people at most who can serve as mentors to teach you at any given time. Running a fast food franchise is fairly predictable way to make 3-5m, so is starting a conference. If you start an ad network you can count on making 10+ if you know what you're doing.
There are tons of very predictable ways to make money on your own, the problem is they require skills that you can only acquire by finding a mentor who knows what they're doing. (And finding good mentors is a hard to acquire skill on its own.)
I don't like to think of hard in terms of the time required, but rather in terms of the skills needed and the things that need to happen to make the project a success. If you break down any project into a PERT chart, the best projects are the ones where each circle is capable of being realized in multiple ways. Whereas if you look at Sam's PERT chart, there are clearly a number of steps that are a one shot deal, where if they don't work the whole thing falls apart. For example if you can't partner with any carriers then the project is dead, unless you go around the carriers in which case your risk (and cost of capital) goes up so your upside goes down.
"What are the alternative ways of making $10m that you casually assume to exist?"
There are lots of ways. For example, doing LBOs on your own you can easily make 2-3 a year. The only problem is that you need the skills to know how to do this, and there are only a few hundred people at most who can serve as mentors to teach you at any given time. Running a fast food franchise is fairly predictable way to make 3-5m, so is starting a conference. If you start an ad network you can count on making 10+ if you know what you're doing.
There are tons of very predictable ways to make money on your own, the problem is they require skills that you can only acquire by finding a mentor who knows what they're doing. (And finding good mentors is a hard to acquire skill on its own.)
If it were easy to make $10 million, there would be lots of 30 year olds with $10 million.
My explanation for why there aren't is that it's actually quite hard to make $10 million. Your explanation is that while it's easy if you know certain magic spells, there are only a few people willing to teach you these spells.
Please, honestly, don't plan your life based on this assumption. Assume it's hard to make lots of money, not that it's easy if you can somehow become an "insider."
My explanation for why there aren't is that it's actually quite hard to make $10 million. Your explanation is that while it's easy if you know certain magic spells, there are only a few people willing to teach you these spells.
Please, honestly, don't plan your life based on this assumption. Assume it's hard to make lots of money, not that it's easy if you can somehow become an "insider."
When I say there are easier businesses, I don't mean easier in the sense that they don't involve just as much hard work. Rather, what I mean is that there is never any requisite step "and then a miracle occurs."
For example, one can make money by getting 25,000 blog subscribers, using that to get a book deal, and using that to do consulting. It still takes an enormous amount of work, but at no step does it involve being chosen from on high.
For example, one can make money by getting 25,000 blog subscribers, using that to get a book deal, and using that to do consulting. It still takes an enormous amount of work, but at no step does it involve being chosen from on high.
I don't think you'll find many people that have saved $10 million from consulting (and certainly not a book deal), though if you were doing really well, and not spending anything, you might be able to do it in 20 years, which doesn't sound very "easy" to me.
Then pick any other example. How about Scribd. There's easily 10m worth of upside, but no single point of failure. IMHO this makes it a better business than Loopt. Not easier in the sense of requires less work, but easier again in the sense that if it doesn't go viral the first day they can keep iterating until it does. And maybe it never will, but the chances of success are still much better because there are more options along the critical path.
edit: At any point if Scribd hadn't been able to add a zero to their traffic stats they could have leveraged their asset to do something slightly different. Loopt never had this luxury. If at any point they couldn't add a zero then the whole project was worth nothing. My point was that someone more experienced would have known this and chosen to start a business more like Scribd and less like Loopt. (If they only cared about the money.)
edit: At any point if Scribd hadn't been able to add a zero to their traffic stats they could have leveraged their asset to do something slightly different. Loopt never had this luxury. If at any point they couldn't add a zero then the whole project was worth nothing. My point was that someone more experienced would have known this and chosen to start a business more like Scribd and less like Loopt. (If they only cared about the money.)
The problem with this thinking is that businesses don't exist in isolation. No points of failure mean no barriers to entry: if it's a matter of grinding through a pre-defined process, anyone can theoretically do it -- and if someone can raise a VC round and employ ten times as many grinders as you, they may catch up to you.
But someone competing with Loopt has different problem entirely. To even have a hope of competing, they have to make a deal with a carrier. And the number of available carriers drops as Loopt grabs more of them -- which gets easier with each one they get. When you're at the bottom trying to catch up, the fact that Loopt scaled a cliff instead of a foothill looks like a smart decision.
But someone competing with Loopt has different problem entirely. To even have a hope of competing, they have to make a deal with a carrier. And the number of available carriers drops as Loopt grabs more of them -- which gets easier with each one they get. When you're at the bottom trying to catch up, the fact that Loopt scaled a cliff instead of a foothill looks like a smart decision.
"No points of failure mean no barriers to entry"
Take my blog -> book -> consulting example. Right now if you have 25k blog followers and you are willing to spend 50k out of pocket it's pretty easy to game the system to become an NYT bestseller for one week. If everyone did it then the the numbers needed would be higher, but right now the number of people willing to do the two prerequisite steps is low enough that this is about right. There is no point of failure; if your tribe isn't growing fast enough you can try a different blogging strategy, and even if your book doesn't make the bestseller list it still grows your tribe and makes it easier for your second book to become a bestseller. But the barrier to entry is still quite large because building a following sufficiently big is more work than most people are willing to do. Ramit Sethi did exactly this a couple months ago, and IIRC it took him ~18 months and thousands of hours. Huge corporations are never going to pay Ramit millions of dollars to teach them about personal finance, but it's easy to see how he could be making tons of money if he'd instead built an asset designed for that.
You have a good point that there are some advantages to Loopt's strategy. But even still, if you have the choice of starting any business in the world, why start one where you have to put up with that? Is the benefit of a higher barrier to entry really worth the risk it will fail entirely? Sure they have massive upside, but there are lots of other business with massive upside where you don't have to hope for a miracle.
Take my blog -> book -> consulting example. Right now if you have 25k blog followers and you are willing to spend 50k out of pocket it's pretty easy to game the system to become an NYT bestseller for one week. If everyone did it then the the numbers needed would be higher, but right now the number of people willing to do the two prerequisite steps is low enough that this is about right. There is no point of failure; if your tribe isn't growing fast enough you can try a different blogging strategy, and even if your book doesn't make the bestseller list it still grows your tribe and makes it easier for your second book to become a bestseller. But the barrier to entry is still quite large because building a following sufficiently big is more work than most people are willing to do. Ramit Sethi did exactly this a couple months ago, and IIRC it took him ~18 months and thousands of hours. Huge corporations are never going to pay Ramit millions of dollars to teach them about personal finance, but it's easy to see how he could be making tons of money if he'd instead built an asset designed for that.
You have a good point that there are some advantages to Loopt's strategy. But even still, if you have the choice of starting any business in the world, why start one where you have to put up with that? Is the benefit of a higher barrier to entry really worth the risk it will fail entirely? Sure they have massive upside, but there are lots of other business with massive upside where you don't have to hope for a miracle.
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I didn't mean to downplay his determination and brains, sorry if it seemed that way.
What? No double popped-collar neon polos? I thought that was his trademark.
On a serious note, please make the website as great as the iPhone app. It's really lacking, and that integration will be really cool.
On a serious note, please make the website as great as the iPhone app. It's really lacking, and that integration will be really cool.
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Though Loopt is not the first one to come up with the idea. But they are so far the most visible one who create a good product that users want! I really want to see their success.
This may sound as bragging. I thought idea similar to loopt on 2004 after hearing about dodge ball and asked my then boss the possibility to do this and we decided this was not the focus of the company. Also even I started to do it, I wonder I can achieve the same result as Sam did. I know idea is worthless and the execution and result is the king.)
Perhaps chasing one's idea and having the guts to do it in the right place and right time is the true cause for success.