Hey, I Know Where U R

Moms and dads, if you want your kids to get a degree, think twice about Stanford. If, like Sam Altman, your matriculating computer-science major gets an idea for a new company—in Altman's case, Loopt, a service that lets people with GPS-equipped mobile phones share their real-time locations with friends—next thing you know, your scion and his buddies will have checked out of the dorm. Instead, they're hobnobbing with venture-capital firms (Loopt received $5 million from New Enterprise Associates and Sequoia), forging deals to get access to subscribers at carriers like Sprint and Verizon, and snaring CBS as their first major buy for ads. Altman, who just turned 23, has now been CEO of Loopt for three years, during which the company says it has lured "hundreds of thousands" of people who let their phones beam their locations to friends, and vice versa. (They pay a monthly fee of $3 or $4.) Altman talked to NEWSWEEK from his Silicon Valley offices.

Levy: What's it like being a relatively small start-up dealing with big carriers like Verizon and Sprint?
It's difficult to get their attention, but we built a cool service that consumers really like and that fits with their goals. We have an excellent business-development guy who chased them down and made sure we got meetings. And we gave them a compelling value proposition.

After starting as a free service, this year you began charging a monthly fee. How is that going?
Better than we expected. Obviously, there's been some breakage. But I think we may get to a model where [advertising] replaces the user fees.

Loopt allows a group of people you select to know where you are. What's the right number of people to share locations?
The number varies person by person. Some people use this only with one other person, like a significant other. Others are comfortable sharing with hundreds. If I were pinned down, I would advise around 20.

How many do you have?
Maybe 45.

What kinds of things happen when you share locations with 40 or 50 people?
It's amazing how often you're near someone and don't know about it—not in the same restaurant, but three restaurants down. It's such a common occurrence that some nights. rather than just go home at 11, I'll drive somewhere because I know I'll find people I can meet up with.

But if someone else knows that you're within a couple of blocks of them and you ignore them, isn't that a dis?
It's sort of a dis, but I think people understand you can't meet with people all the time. It's also totally acceptable to just say, "I'm going to disappear off the map" [and turn it off].

But maybe your significant other would wonder why you're hiding.
For that very reason, there's a feature in Loopt where you can set your location to appear to the world that you're somewhere different than you actually are. If you want it to appear that you're at the library while you are really somewhere else, you could do that.

You could lie?
For your privacy. This feature came out of a conversation with the National Network to End Domestic Violence. They were saying if a battered wife turned off the feature, the abusive husband would think something's wrong, so people need the ability to look like they're somewhere that they are not.

What do you think is the most legitimate privacy concern for users of location-based services?
It's the unwitting-use scenario. If I've opted in and I'm sharing my location, I at least know I'm doing that. But there's a scenario where someone installs a location-based service on my phone and I don't know about it. If then they can see my location with me being unaware of that, that's very scary. There's a lot we do at Loopt to make sure that doesn't happen.

Are you concerned that a big company like Facebook might build a similar application and crush you?
It's always a concern, but it's hard to launch a service like ours. We hated it while we were going through the initial process, but now we are happy to have the barriers to entry of a built-up network of location-sharing and relationships in place with the carriers.

You dropped out of Stanford to start Loopt. Why is doing a start-up more important than getting a degree?
I felt like if we didn't get started now, it would just be very difficult to catch up with the market leader. I can always go back and finish college.