Name-Your-Own-Deal App Launches with Virgin America, Sells Out Within Hour

Rather than mimic Groupon's ubiquitous daily-deals model, Palo Alto, Calif.-based startup Loopt has flipped the script, allowing customers to create their own deals -- and sold out of its first deal on Wednesday in less than an hour.

Whereas Groupon pursues businesses for deals it can present to customers, Loopt allows customers to create and promote their own deals, then approaches local businesses to make it happen.

Loopt's first u-Deal offered a $100 Virgin America voucher for $35, good for fall flights out of San Francisco. The 500 available vouchers sold out 48 minutes after the deal hit Twitter.

After downloading the Loopt app, users can request a deal from a local business right from their phone. If the deal passes Loopt's review, the deal is on, and it's up to the user to share it with friends, via e-mail, text, Twitter, Facebook and other channels. Loopt then contacts the business with the response, and if the business agrees to the deal, everyone who committed gets it. Some deals will remain open for a limited time for additional users to buy in.

"Loopt u-Deals are truly a team effort -- deal creators, their friends and family, Loopt, and local merchants all come together to make them happen," Sam Altman, co-founder and CEO of Loopt, said in a statement. "If we can continue to make local business connections simple, fun and rewarding for mobile users, we'll start to see much stronger social ties within local communities nationwide."

u-Deals might also prove to be more effective for small businesses than Groupon, since Loopt is able to set caps on the number of deals offered, so businesses won't be burdened with an overwhelming response. "As more people sign up for a deal, we can call that business and say we have $2,000 here in revenue and new customers if you agree to these terms," Altman said.

The u-Deals app is currently only available for Android in the San Francisco Bay area, though Loopt plans to roll it out in additional cities and mobile platforms within months.