Foursquare: An Ads Business With a Dying Product Hook
blog.jasonshah.orgI feel like I don't really know enough about this to speculate. I think both articles (this one and the one it links to which argues the opposite) both have some good points. But I get the impression that, like me, neither author really knows this space well enough to draw good conclusions.
I like the data point (from the baptiste piece) that offline commerce is still 95% of spending, thus it is a 19x larger market than e-commerce. I think the point in the shah piece about "I didn't even want a pastry" is also good. But to me it doesn't really argue that this is a failure. To me, it argues that this is a first step which, like all first steps, will need to be followed up with refinement of their monetization strategy.
I have a certificate in GIS. I live without a car and have some other issues. I have been thinking here lately about my frustrations with using the internet to try to find stuff in the real world. In many ways, the internet has been a godsend in that regard. But in other ways it has been pretty crazymaking. I asked a bit about this elsewhere recently. It didn't really result in some huge epiphany that I am just doing it wrong. It resulted in me concluding that this intersection of the web and the real world is just not that well done yet.
So I think Four Square is breaking new ground. Yes, that's always risky. But I am guessing they understand this space better than the hn equivalent of a few "armchair politicians" looking on from the outside. (My dad had a brilliant solution for every social ill ever. And was happy to share his wisdom while watching game shows and eating peanuts and doing not a damn thing about any of them. So, erm, I learned long ago that "talk is cheap.")
>So I think Four Square is breaking new ground. Yes, that's always risky. But I am guessing they understand this space better than the hn equivalent of a few "armchair politicians" looking on from the outside.
Very true, I still think they are on the verge of something (whether they are it or not is another question left up to the internet). I think it would be pretty cool if they worked with the stores to create an personalized interactive experience for the user. Checkins would be the first step, but after that, they could try to gamify the space/store/shop that took very little effort from the stores part, but also give reasons for users to go to stores beyond "you can buy this".
I am not on Four Square. Are they all about "stores"/other commercial spaces? Or do they do check-ins for libraries, parks, beaches, and/or other non-commercial sites?
(I am sparing you my probably crazed-sounding rant. :-/ But I find visions of a future where something like Four Square is all about commercial only spaces pretty horrifying. So I am hoping for good news about where they are now in that regard.)
No, you can checkin anywhere (assuming one can produce gps cords for the location).
I largely agree with the OP. This reminds me of Loopt.
If I were Foursquare, I would use the metadata (reviews, checkins, etc) to build a Yellow Pages site that's powered by 4sq users gestures. But I'd leave monitization out of the consumer app entirely, and just focus on making it great and popular.
Internet yellow pages is crazy boring, stupidly profitable, and waiting for disruption. Google Places and Yelp are currently passing for disruption in that space. 4sq is in a unique position to do better.
Ditto for the Better Business Bureau.
Just my $.02.
"Internet yellow pages is crazy boring, stupidly profitable"
How is it stupidly profitable? I used to work at YP.com and they make all their money on the dead tree book
perhaps he meant the industry in general (of listing merchants) rather than the Yellow Pages company specifically.
How does the industry in general make its money?
i've been a long time foursquare hater, I never understood why anyone would want to "check-in". That being said I have used their explore feature for restaurants in NYC for about a year, and find it vastly superior to yelp.
Why? Tips.
When i look up a place on foursquare I immediately know "what to order" at a given place, I often will look up a place at foursquare while I am sitting there deciding what to order. The question will be how can they sustain the same level of content generation if their main hook is fading.
Can you explain what you mean? The current Yelp app has both Reviews and Tips.
For me, Yelp has been completely ruined by what amounts to YouTube comments.
"The server was totally rude. She put lemon in my diet coke when I asked TWICE not to do that. It was the worst experience of my life."
Foursquare seems to have less batshit insane people on it. They actually do helpful things like post the wireless password.
whoever captures more of the market gets those insane people too.
I agree in principle, but I also think something about the check-in mechanics improve the quality.
Do you want batshit crazy customers?
Yelp focuses on the "Wall of Text" type of review. Foursquare tips are one-liners.
So instead of:
"My date and I came here a few weeks ago and the initial ambience was great. We waited around 20 minutes for seats and the decor out front was..."
you get
"Try the veal. Seriously."
One is much, much more useful in the mobile context, the other is almost useless. Yelp also over-emphasizes the star-rating system (which at this point is completely irrelevant and pure noise) while Foursquare simply throw tips at you.
Overall I've found that Foursquare Explore's recommendations in NYC to be vastly superior to Yelp. I'd be sad if they go under.
combo of a lot of things, yelp's UI always seems 2 years old, feels bloated, and generally takes me longer to do anything. I use yelp on the web, foursquare on the go.
You check in so your friends know where you are and can choose to come join you there. Among my circle of friends, the understanding is that checking in on foursquare implicitly invites anyone who sees the checkin to drop in if they happen to be in the area.
Just like Loopt though, they have inherent value (some company will buy them for at least $100m). I shared some of my thoughts on the transaction here: https://news.ycombinator.com/item?id=5533949
That is sort of what Google's Niantic Labs is doing with Field Trip, though with more a discovering cool places angle than finding local businesses: http://www.fieldtripper.com/
Field Trip uses data from bunch of different sources, but also utilizes Ingress players as sort of "location scouts".
Or at least that is what it looks like, with the focus on gathering new portals at points of interest.
>Or at least that is what it looks like, with the focus on gathering new portals at points of interest.
Yeah.
I played Ingress pretty heavily from launch till the beginning of this year.
As best I can tell, it's just what you describe with players serving to scout and submit new points of interest and check/refine the accuracy of existing submissions. I expect they're also gathering a wealth of location fine location data that could be applied to walking directions and public accessibility.
One of the more interesting possibilities I see for Ingress data is insight how information moves in social networks and how far a person will travel out of their way for a "reward".
I can see the collection and distribution of redeemable codes at Ingress cross-promotion locations being useful insight into a refined take on daily deals.
It's wayyyyyyy too late in the game for foursquare to ignore monetization entirely
The point of the comment was to monetize the data in making a YellowPages-type app, while leaving monetization out of the other part of the business. Basically make money using the data that your users give you while ignoring attempts to directly turn those users into money (i.e. serving ads).
I think 4sq will have an exit at a multiple that breaks even for the VCs, gives the founder a small sum of cash and leaves many employees high and dry.
My personal opinion is that they raised too much, didn't built right Facebook integration and have never really figured out their market. They sure do have a lot of users
Hell, if yahoo is willing to pay 30M for summly, who knows what they might shell out for a company that actually has users and technology!
Not a heavy foursquare user, but have used it occasionally mostly to check out recommended places to eat nearby, not so much for the social aspect of checking-in.
In this case, seeing some discounts around me when I search might not be such a bad thing. As long as I don't doubt the integrity or priority of real user recommendations over paid ones. If they strike a good balance, I can see this becoming a good direction for all involved: foursquare, me as a customer and (perhaps also very importantly) local businesses...
On the last front however, I can see how big businesses take over the advertised space, being able to pay more for it, and in turn perhaps pushing small local businesses out of focus. This could be the biggest risk I imagine.
I'm curious what others think about this. I'm a fan of Foursquare and their team and hope I am wrong about this. I'm also confident they will still have a large exit.
That being said, without a product hook that's very engaging, I think it's hard to build a local ads business, which is what I think Foursquare sees as its revenue stream. Do people see Foursquare differently, as say, an ecommerce company? Do they even need a growing product hook to build a good local ads business?
I agree completely with your post. I've never been compelled to use Foursquare, but have observed friends who were into the original check-in idea gradually pull away because of the force-feeding.
B2C is hard to monetize, period. The Groupon collapse sort of shut one possible revenue door for Foursquare. Twitter can pull off ads because it has a big brand draw that Foursquare just doesn't.
I respect the team, but I don't envy their position.
Having a large exit, and building a vastly profitable business are 2 different things. The former relies on the existence of the greater fool, while the latter actually depends on nailing the business fundamentals. Sadly.. I'm confident there will be a greater fool here too :)
Now if foursquare can improve on Yelp's model and address its faults then maybe?
The pastry example is really important. You can't just serve ads to people, they have to be targeted toward the users' interests. Perhaps they're based on your check-in history, but this won't convert well to sporadic users.
I don't know how the majority of Foursquare users use the service, but my friends and I pretty much only use it to check-in - at a place that we had pre-determined. There is no discovery or opportunity for an ad to capture my attention or push me toward a promoted business. If I'm going to get a burger I don't care about your pastry ad. But there's no way for Foursquare to get this information. Not without disrupting the check-in experience.
As has been suggested, I don't see how Foursquare can grow their ad network with this kind of usage. How can they convince businesses to sign on?
Admittedly I don't check in often. I use Path / Facebook for this now.
Trey Titone suggested in the comments on the post that if Foursquare could do frictionless sharing with the app running in the background, maybe they could get more checkin data. But I think the battery constraints / privacy concerns are too high, at least in the next 18-24 months, for people to opt in for this without getting much product value.
Battery life will get better, apps will be more battery-efficient, and privacy concerns tend to fade away. But frictionless checkins don't seem highly compelling to me from the user point-of-view for people to make the necessary sacrifices that adoption would demand.
> Check-ins are moving to Facebook, Path, etc., so now Foursquare is left with local promotions but no core utility for the user.
Is this anecdotal or based on data?
According to Foursquare's co-founder Dennis Crowley, as quoted by TechCrunch, the service saw 5 million checkins per day as of Feb. 2013. But that was the same as per-day checkins as the previous year. Flat growth to me, especially in their space.
The rest, and a fairly critical piece of my statement, about checkins moving to Facebook and Path I admit wholeheartedly was anecdotal and speculative.
http://techcrunch.com/2013/04/11/foursquares-new-series-d-ro...
http://techcrunch.com/2013/03/16/interview-dennis-crowley-of...
much good saying you don´t mean to troll or hate & that your purpose is to start a conversation with a title like that ;).
I always thought that Foursquare was going to monetize like BellyCard, by using it for a rewards program. Letting business reward their frequent customers and sending them coupons, etc, seems like something that local businesses would pay for.
i wanna know how to hack facebook account kindly plz help me sir ???
use SendGrid to impersonate that person's significant other.
In the email, tell them you need to know their password and that your email changed to something and they need to email it there.
TaDa!
Log into Facebook and press alt+F4.
buy rat poison and swallow it, you'll have access to all facebook accounts.
Problem is that these walking dead keep engineering talent locked, and it's extremely hard to hire for smaller but viable start-ups...