The mobile app created by St. Louis Park-based entrepreneur Blair Sargent took off thanks in part to advertising on Facebook.
But now he’s suing the social media behemoth in federal court, saying the company stole the name of his app, Lasso, and is tanking his business.
“I didn’t want it to come to this,” he said. “I’d like them to stop using the name.”
Sargent first started his company, RoundmUp, in 2014 to develop an app for event planning. That morphed into Lasso, a social media app that aims to get people to put down their phones and meet face to face at bars and restaurants. He went to college-area businesses in the Twin Cities and made deals with them: If his app could get four people in the door, for example, the customers would get a free pitcher of beer. Eight people meant a free appetizer.
Sargent would ultimately get a payment from the restaurants, while the businesses made money by attracting groups that ordered more food and drinks.
Sargent couldn’t name his app RoundmUp due to infringing on the name of the popular weed killer. He settled on Lasso.
“I wanted to keep with the iconology of rounding up friends, like a lasso,” he said.
He trademarked the name and poured nearly $100,000 into marketing the app, including about $12,500 to advertise on Facebook from May 2017 to September 2018, according to his lawsuit.
Lasso has about 800 active monthly users and 5,210 diners who have used the app to get restaurant deals.
He planned to expand his business to other college towns, such as Duluth, Mankato and Madison, Wis., as well as to provide marketing services for small businesses.
Then in November, a friend told him about another app named Lasso. This one was created by Facebook to compete with the popular social media platform TikTok, where users record and loop short videos of themselves.
At first, downloads for Sargent’s app took off, increasing 62 percent in a week. But those gains were short-lived. Most of those new users got confused by the competing names and deleted Sargent’s app. Retention plummeted, going from 33% to 7%. As app retention goes down on an app, so too do the search ratings at app stores.
That’s threatening Sargent’s business model.
“The harder it is to acquire users, the more difficult it is to reach that point to say we’re adding enough value to charge these restaurants,” Sargent said.
Facebook has not responded to a request for comment.
Sargent’s attorney, David Madgett, said that before filing the suit, he went to Facebook to see if a deal could be worked out, either by the company changing the name or financially compensating Sargent. They refused, Madgett said.
“I explained to them that my client had spent a lot of money developing his brand, and Facebook ended up destroying that value,” Madgett said.
Madgett said he plans to file for a restraining order to prevent Facebook from using the name Lasso until the suit is resolved.
“This makes people think twice about putting their stuff on [Facebook’s] site,” Madgett said. “If the end result is they end up stealing your intellectual property, it’s frustrating.”