I was fortunate enough to have Dennis Crowley, Foursquare's co-founder and CEO, speak at a previous LeadsCon. Thank goodness he did. It radically changed my view of the product and company. He's an amazing thinker and was so far ahead of where I would have even thought possible. One thing he mentioned stuck out, and this was two years ago. He always saw the act of having to actually check-in as not ideal, but in his mind, it was a proxy to the future of mobile where that inefficiency would not exist.
The user base is impressive and passionate. I believe they report more than 20 million users having had 15 million the same period one year prior - 400,000 new organic users per month is stellar. But, we could argue that the user base isn't big enough, especially when compared to other hot apps - most notably Instagram's 50 million.
As Foursquare stands to be a real business and not an eyeball game, they have enough users. The question has always been how will they and should they make money. They have some enormous advantages over other locally oriented businesses:
- User base - They are at critical mass and then some with 20 million users. Even if they have only 5 million active that is more than enough
- Data - They have some of the best, most rich data. When places open and close, they are the first to know. It's so far ahead of more the more traditional means for gathering data.
- Users + Data - They have lots of people and know lots about the world and those people. They are the best source of 3D info.
- API - They have done an amazing job of enabling great products and businesses to be built on top of their data
- Brand - They above has contributed to a great brand that others want to use, e.g., American Express.
Of the above, what is monetizable? Like Twitter, they can charge for API use. What else? They don't want to charge the users. That's why it always seems to make
The problem - there isn't a play for the merchants. Let's look at an example that spans NYC and SF. Food trucks. The proprietors plaster their trucks with their twitter and facebook information. Neither of these are nearly as useful at sharing location data. But, they've been adopted because they are a communication platform, and having a way to collect and share with an audience is their core concern. We think of 4sq on that level for individuals with other individuals but not as something a business could use. Facebook and Twitter are anything but B2B tools. They are B2C tools, and if there is anything that I learned from the daily deal space, it's that local merchants don't have time for specialized tools. They gravitate towards easy to use consumer tools that they use anyway.
Foursquare basically pioneered gamification. I know some of my friends use the app strictly for the asymmetical reward. Some of them use it the way it was meant to be used, as a platform for sharing and interacting. Foursquare, in my opinion, might be a sharing tool, but it is not a planning tool. It's a, "I'm here tool." I don't think (enough) people use it to determine where to go, so I wouldn't try to monetize off a behavior that isn't their primary behavior, i.e., deals.
Assuming that Foursquare is an I'm here tool, I'd focus on what you can do with an I'm here user. For one thing, you can make a better Yelp. You can also make a better business for the merchants. Why not be the Net Promoter Score gather. Let me share a private message with the business be it food, service. Let me interact in real-time while it's on my mind. And, be a discovery tool for while I'm there. The tips section is a nightmare. Find a way to help me enjoy my experience. Become the platform for retention. Foursquare should have been pioneers in loyalty not others.
What does it all mean:
- Going on a shopping spree like Groupon did for early stage businesses that help merchants - get into loyalty, enable deeper experiences, etc.
- Orient monetization away from acquisition - don't try to make money by getting people to a place. Focus on the data, insights, and what can happen from being at a place.
- Focus on being a tool for merchants - help them understand their business in a way they never knew; help them run their business, which could be simpler communication, rewards that make sense not just mayorships, i.e., incentivize users for data but realize your audience is actually the merchants.
I'm sure none of the above is new Foursquare. They are some amazingly smart people. But, my need to share only highlights my conviction about how they should tweak the platform. People want to share and companies (usually) want to hear.