Generation GPS

Sam Altman wanted to track his friends 24/7. Now he's making a business of it

3 min read

A suture kit became a permanent fixture in the Altman household around the time Sam’s mom, a doctor, came home to find her son surrounded by the parts of what was once the family TV.

”She was pretty good-natured about that,” he says. ”I was one of those losers who hung out in the basement building things. I’d be ripping out circuit boards, and in the process I would cut or shock myself. She stitched me up on the kitchen table more than once.”

Years later, those battle scars are paying dividends. At the ripe old age of 23—and on sanctioned leave from Stanford University—Sam Altman and Nick Sivo, his best friend from freshman computer class, also 23, are the creators of Loopt, software for cellphones that figures out where users are and displays photos of their friends moving around on a map.

Verizon Communications and Sprint Nextel are already clients. Loopt charges users $3 to $4 a month for the service and is considering selling local ads. It is also integrating the service with Facebook and other social networking sites.

Needless to say, software that tracks people 24 hours a day draws its share of controversy, even though the service applies only to networks of friends who also buy it, is closed to children under 14, and reminds new users that they are being tracked.

”The tracking gets a knee-jerk reaction,” says Altman. ”A year into the company, we had to hire a chief privacy officer.” Loopt has added privacy features, such as letting users temporarily block the tracking of their movements or even enter fake locations.

Altman has a passion for GPS technology. In 2004, he spent the summer after his freshman year in a research project that built the first autonomous navigation system for helicopters—”like an autopilot, but one that can dodge buildings,” he says.

Back in school that fall, Altman had an epiphany when he noticed his fellow students constantly on their cellphones. The moment class ended, he says, they were calling their friends. ”People were relying on their cellphones more and more. It got me thinking about how powerful location-based advertising could be.”

The following summer, with US $6000 in funding from Y Combinator, a venture capital firm that helps launch young engineers with great ideas but no business savvy, he and Sivo put together a prototype that could pinpoint the position of any participant’s cellphone and display the information on every other participant’s cellphone. If the phone doesn’t have GPS built in, the service analyzes the exchange of signals between the phone and cell towers to locate a user. Altman committed himself full-time. ”I went to the first two weeks of classes and my head wasn’t in it,” he says. ”I thought, ’This could be a huge deal if I do it right.’ ”

Armed with parental blessings and strategic guidance from Stanford’s computer science department and the Business Association of Stanford Entrepreneurial Students, which helps students commercialize technological ideas, he and Sivo took leaves of absence and set about badgering venture capitalists.

They raised $5 million and signed deals with BlackBerry, Verizon, Sprint, and its youth brand, Boost Mobile. They are talking to other carriers, both foreign and domestic.

So far the technology has come more easily than the corporate mentality. ”My age helps because I am in the target demographic,” says Altman. ”I’m basically building a service for me and my friends. But when I go meet with a senior person at a carrier, I get comments about my age. One of my first hires was someone in his 40s that could talk to the grown-ups.”

At some point, Altman needs to return to Stanford for his degree. ”I’m hoping the company can count toward my senior project.”

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