Remember New York City-based Foursquare, the location-based social app that first wowed the crowds at SxSW in 2009?
Back then co-founder Dennis Crowley described it as a “part friend-finder, part social city-guide, part social-game."
The idea was for users to check-in using the app as they walked into coffee shops, restaurants, bars and anywhere else so their friends could find them. It spread like wildfire.
In fact, it was such a hit that President Obama (aka the White House”) joined the social network in 2011. From the White House blog:
“There are over 10 million people already 'checking in' around the world, and now you’ll be able to discover 'tips' from the White House featuring the places President Obama has visited, what he did there, plus historical information and more."
Foursquare became rich in rich data fairly quickly, but it failed to capitalize on it as well as might have been expected. We wouldn’t be writing about a pivot and new funding if it had. More on that later.
What Foursquare Knows
Foursquare’s consumer-facing apps have gone through several iterations, including some very popular gamification (you become Mayor of a place if you frequent it the most). And users have continued to grow.
Recent reports indicate that there are more than 50 million active monthly users — all of them generating a lot of data.
Foursquare knows where you are, where you have been and has a good shot at predicting at what you might want to do next. It's data scientists seem to be creating some pretty good algorithms.
Though I’m not a user, I used a mapping feature while I was in New York City recently to locate a Spin class. When I looked at the phone after the class it pointed me to Lululemon (a place that sells workout clothes) and Whole Foods. BINGO!
These are both places that I actually shop.
It was one of the few times I’ve seen a “people like you” algorithm be spot on. (Maybe what we do says more about us than where we browse. I’ll let that be fodder for another time.)
But here’s the problem, even though Foursquare had me pegged, it didn’t monetize on its success. It didn’t collect a dime for my walking through the next door.
New Money, Management and a Pivot
Yesterday Foursquare announced a new round of funding — $45 million. It also welcomed a new CEO, Jeff Glueck, and a new mission.
To use Glueck’s words, “We are now a fast-growing location intelligence company, making consumer experiences richer and informing business solutions”.
Crowley has given up his role as CEO and will focus on building products that generate the data. Glueck will insure that the company can monetize on it. As of now they have two ways of doing that, via their Enterprise Solutions products (Places Insights and Places tools for developers) and Pinpoint, their programmatic ad platform.
While time will tell whether Foursquare’s new strategy proves successful, it might be worth noting that Glueck titled his blog post announcing the transition “Foursquare Ushers in a New Era.”
We’ve all heard talk about the tech industry being in a bubble. In an era where we’ve been calling data the new oil, we need to seriously consider what we’re going to do to make sure that it’s fueling something that can be monetized.
Otherwise it’s nothing but cool stuff that can’t pay its bills.