My Worst Money Making Ideas #4

#4 – Loopster (pre-Blog)

Summary: A friend and I had the idea for Loopster in late 2006. We had a developer from the Ukraine build our beta site and launched in March 2007. TechCrunch did a story on us (see here). This got us a HUGE amount of people signing up for our service. On Easter day the server got “crunched” and died. I ran over to another friend of mine who lives around the corner and grabbed a server from him. Spent the day getting Linux installed, PHP, Apache and all the other components required to run Loopster. We were back online in about 12 hours. People kept signing up. We went from a PR0 to a PR6 in a couple weeks. Our Alexa was down around 200,000. Nice stuff!

I had Forbes contact me to do a story on Loopster. All good stuff! Then the day after my third son was born I got a call from one of the guys over at Loopt. They felt the name Loopster was too similar to their name AND our services were in the same “realm”. They asked me to change my name OR change the type of website we were. Basically don’t do anything with social network services like they were doing.

I contacted two attorneys and they both said it would cost be about $20k to defend the case (with no guarantees). At the time I was pissed at Loopt.

So we needed to change our name… Well it looks really bad to redirect everyone from loopster to socialsnips.com…. I tried it for a brief period of time but as I expected it made people nervous that we changed our name.

However after my initial anger I did see their position. They are a great company that offers a great service.

Why this idea sucked: Everything was perfect (in my opinion) except for my lack of doing an IP search.

What I gained: In the end I learned a ton about working with offshore developers, taking a brand new idea and turning it into a working product, learned how to get free PR and also learned to do a thorough job researching IP.

What I spent: About $2,500