Path social network follows path to improve

SAN FRANCISCO -- Britney Spears is helping Dave Morin recover from his privacy woes in February.

Morin and his partners came up with the idea for the Path app, a "private" social network aimed at close friends. Then overnight, he became the poster child for snatching personal data when it was discovered that address books from new users were uploaded to Path servers.

Morin apologized and quickly switched gears, trying to recover from what the influential blog TechCrunch called Pathgate.

Pop music icon Spears (the sixth-most-followed person on Twitter, with more than 14 million followers) recently stopped by to check out Path offices here, attracting positive attention that certainly didn't hurt.

"Thanks for showing me Path Dave," she tweeted. "I LOVE IT!!!"

But Path's troubles aren't over. On Monday, a lawsuit was filed in Austin against several Internet companies — including Path, Twitter and Facebook — by 13 consumers upset about their personal information being used.

Still, that hasn't slowed Morin from improving his relationship with customers. He has now updated the app and is asking permission to access personal data. The app also offers music-matching capabilities and an ability to monitor exercise, in a Nike alliance, that has social input.

Morin, who worked at Facebook on a project that helped companies interact with Facebook members, created Path with partners Dustin Mierau and Napster founder Shawn Fanning.

They noticed people were taking pictures with mobile phones but not sharing the images with others. They also realized that most people call only the same five or 10 people a day. "We thought there was a genuinely interesting opportunity to build … a very personal, very private network," Morin says.

Since its launch in 2010, Path has grown to 2 million members who have shared about 1 billion photos and posts. Most of Path's users tend to be families, especially new moms who want to share lots of baby pictures with close relatives. The maximum number of people who can be in the social network is 150, but most have only five or 10, Morin says.

The app is available for iPhone and Android.

The missteps with personal data have forced Morin to view privacy issues with a new perspective. "We're in the early days of mobile and social," he says. "And as we continue to grow, we will make some mistakes along the way."

The problems for Path began in February when Arun Thampi, a Singapore software developer, discovered that when users sign up for the Path app, all of the data in their iPhone address book went directly to Path, causing an outcry.

A "very small" percentage of users, Morin says, closed their accounts.

In trying to connect new users to their family and close friends, Morin says that pulling in their address book and Facebook data, as a way to "recommend people to you when you joined," seemed like a good idea.

"The way we did that turned out to be not the way users liked," he acknowledges. After Thampi discovered the breach and wrote about it on his blog, Morin says, "We quickly changed it."

The personal data collected on servers were deleted, and now, when users join Path, they are asked permission first. "It's very transparent," Morin says. "We're working with our cohorts in the industry to come up with better ways to do this, and drive the conversation forward. It's an important one, because social networks require you being able to find your friends, and so we need to work through this as an industry."

Analyst Charlene Li, founder of the Altimeter Group, says the controversy hurt Path in the short term.

The irony, Li says, is that users love Path. "They're obsessed with it. I've had CEOs of companies pulling it out and showing it to me. They don't dare go on Facebook, because it's so public. But on Path, they can go and find their close friends and share with them."

Path raised $11.2 million in its initial round of financing from Silicon Valley venture firm Kleiner Perkins Caufield & Byers and other investors. And while published reports say that Path is looking to raise another $25 million to $30 million in new financing, Morin dismisses that as "rumors and speculation."

Even though Path is not profitable, it brings in some revenue by selling filters to improve photos taken via Path on the iPhone and Android phones, similar to efforts by photo apps Instagram and Hipstamatic.

"We've seen in the social-games area, people are willing to buy different virtual goods to decorate their farm, or to better express themselves," Morin says. "We think there's a very large business there, to make your Path more personal."

Meanwhile, he sees his potential audience as anyone in the world with a family. "We think this market is bigger than even the PC market."