How the B-School Dropouts at Bump Are Filling a Big Gap in Mobile Communications

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two devices running Bump, out of the thousands that may be in use around the world at any given moment, should be temporarily paired.

“If I had to describe the Bump connection technology, it would be like this,” says Lieb. “We monitor all the sensors on the handset that we can—the accelerometer, the location of the device, the IP address of the network it’s connected to, and a bunch of other things. We send all that data up to the cloud, and our algorithm listens to all of the phones in the world that are bumping. Based on those sensor readings, it can figure out which two phones just shared the same bump.”

This is the system’s indication that whatever data the bumper selected in advance of the bump—a photo, an appointment, a contact—should be transferred to the bumpee’s phone. Amazingly, it all happens in a couple of seconds.

Lieb, Huibers, and Mintz had a working app in the iTunes App Store even before they applied to Y Combinator. Interestingly, since Lieb and Mintz were in Chicago and Huibers was in Sunnyvale, Huibers and Mintz didn’t meet face to face until their Y Combinator interview.

Huibers had already departed Texas Instruments at that point, and getting into the program cemented Lieb and Mintz’s decision to leave Booth. It also brought in about $20,000 in seed funding, on top of the $25,000 the startup had won in the New Venture Challenge. “All three of us had a lot of respect for Y Combinator, but we didn’t do it for the money,” says Lieb. “We wanted to get involved in the Y Combinator community. That’s probably the most powerful part of being a YC company, having access to this network.”

With feedback from Y Combinator co-founder Paul Graham and others, the trio spent the summer of 2009 making Bump faster and easier to use. The “YC network” came in very handy that August, when Apple featured Bump in a TV commercial for the iPhone. “Our traffic spiked 1,000 percent in three days, and we needed help to scale our servers quickly,” Lieb recounts. “We sent an e-mail out to the whole YC group and within two hours, we had three guys from another startup in our office helping us. If we hadn’t been part of YC, we would have had a very hard time.”

Bump’s story since it exited Y Combinator is largely one of hockey-stick growth. The app is inherently viral—if you want to share something with a friend, you get them to download Bump right then and there. “It’s this magical thing that you don’t expect to work, but it does, so we get 20,000 to 60,000 downloads a day just from people telling their friends about it,” says Lieb. Using the capital from Sequoia and its angel investors, the company has grown to 15 full-time employees and is “still hiring pretty aggressively.”

Astute readers may notice that I haven’t said a word yet about how Bump makes money. That’s because the company itself hasn’t yet shared detailed ideas about monetizing the app. But with such a large base of users, and with so few other competing methods for device-to-device transfers available, the company could have an interesting future ahead of it. I spoke with Lieb about three of the directions the company is exploring.

Bump as an infrastructure play. Bump is useful enough as a stand-alone app for transferring contact data, appointments, photos, and the like. But Lieb and his co-founders realized early on that the basic system for initiating data transfers based on sensor data would also be powerful in other … Next Page »

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Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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