Before Sam Altman became the face of ChatGPT and one of the most closely watched names in artificial intelligence, he was a 19-year-old Stanford student trying to build a social networking company. Altman left Stanford University to co-found Loopt, a location-based social networking app. Thought the startup never became a major hit, but it eventually delivered a multimillion-dollar exit.
In March 2012, Green Dot Corporation agreed to acquire Loopt for about $43.3 million, offering insight as to why why a startup does not necessarily need millions of users to become valuable.
Sam Altman left Stanford at 19 to build Loopt
Loopt entered a social media market that was becoming increasingly competitive, but its location-based product struggled to gain widespread consumer adoption. Despite that, Loopt attracted the attention of Green Dot, an early fintech company looking to expand its mobile capabilities.
The acquisition ultimately gave Green Dot access to technology, patents and employees with experience in mobile development and location-based services. "Loopt had location technology, mobile development experience, patents around real-time location-based messaging, and a team that had already spent years solving problems Green Dot was only beginning to face," Roman Milyushkevich, CEO of HasData, a technology infrastructure company, told Moneywise.
At first glance, buying a social networking app that had failed to become a mainstream hit might seem unusual. But Green Dot was not simply buying Loopt for its users.
Green Dot already had customers, payment infrastructure and retail distribution. Loopt brought mobile product expertise and location technology that could potentially be used to expand Green Dot's business. "Green Dot was betting that combining those assets would produce something neither company could build as quickly alone," Milyushkevich added, according to Yahoo Finance.
The acquisition therefore made strategic sense even though Loopt had not become a dominant social media platform.
The Loopt deal shows another side of Sam Altman's early career
The Loopt story is particularly interesting because it predates Altman's rise at OpenAI by more than a decade. He left Stanford to build a consumer technology company, struggled to turn it into a breakout product and nevertheless managed to secure a multimillion-dollar exit.
