TL;DR: I believe that if Foursquare focuses on helping visitors (aiding discovery) rather than regulars (tracking visits) of any location, it will go from being cool to useful and help influence spending. Making it a win for Foursquare, merchants and users.
I love the idea of Foursquare. I am also a great admirer of their founder/CEO, Dens and their lead investor Fred Wilson. However, my love can be questioned as I have not used Foursquare in 3 years.
I previously assumed that my shortage of usage stemmed from the unpopularity of 4sq in Nigeria. However, when I visited San Francisco earlier this year, I got a better understanding of why Foursquare does not deliver for me.
In a few words, I hope to explain my position and suggest profitable way in which 4sq can become useful to me and perhaps make some money too. (once 4sq can make money from Oo, they should go ahead and write their IPO prospectus).
If you take a look at their original pitch deck, 4sq’s goal was focused primarily on finding your buddies in the context of their location. They gave you badges. when you checked-in. The badges were a way to motivate people to state their positions so that their buddies would know where they were – and for 4sq to get useful data. After doing it three billion times, people got to the stage of “Now what?”.
Foursquare focused a lot on documenting places people visited and not enough on helping people find places to visit.
In the first quarter of this year, I was fortunate to visit 5 major American cities. On more than one occasion in each of the cities, I was at a loss of where to go. One clear example was when I sought for a place to watch a football match between Manchester United and Real Madrid.
On opening up Foursquare, I had no idea what next to do. The next best solution I could think of was to ask my question on FB, Twitter and LinkedIn.
Where in San Francisco can I watch live Football? (the real one). Does anyone know a pub that would show Man U beating Real Madrid tonight?
— Oo Nwoye (@OoTheNigerian) March 5, 2013
Guess where I got my answer?
You guessed wrong, LinkedIn was where I got my answer from.
I ended up watching the match at a place called Mad Dog In The Fog. I went with a friend and we both spent about $50. Foursquare played no role in that (And Klout did not ‘measure the influence’ of my friend that made the recommendation’)
Focus on visitors. Foursquare should focus on influencing where people visit (read: and spend money)
Foursquare’s early life focused on rewarding ‘regulars’ making them Mayors. While it may be cool, I do not need Foursquare to visit a place I already like or visit regularly. Foursquare needs its users to need it.
According to MasterCard’s Index of Global Destination Cities, in 2011, 7.6 million international visitors landed in New York and spent $20 billion. If the report had considered local visitors, the numbers would have been crazier than the estimated $20 billion mentioned. I’d posit that a vast majority of those people needed help in deciding where to spend that money even if they had an idea of what they wanted to do, like in my example above.
If you have used OKCupids blind date app (don’t ask me how I know about it), you would see the potential of Foursquare playing a role in deciding where people visit.
Foursquare needs to map interests, activities and events to venues. For example, Mad Dog is cool, but much cooler to me when the great Manchester United is playing. Of course same goes for the 49ers fans when their team is playing. You can extrapolate that to concert venues etc. The greatness of a venue is contextual to what is going on there.
Now to the money
Foursquare as a matter of necessity, should have given a debit-cum-loyalty card to every user a long time ago. Even if 5% of their one million merchants see the potential, it would be really massive I presume. If implemented properly, users would be motivated to use Foursquare to determine the location of their activities and check-in with a swipe. Co-pete with Square perhaps?
Merchants would be happy to spare a few pennies per transaction for real measurable foot traffic
Foursquare will make money and would work harder to make it work better for the users and merchants.
It’s going to be a win-win-win lovefest!
Thanks Cristina for helping to proofread this for me
4 thoughts on “How Foursquare Can Go From Cool To Profitably Useful”
Nice analysis bruv, keep it up.
…but they do have loyalty rewards (if not actual cards) in the form of specials offered by venues. They also offer discounts by linking your credit cards to your Foursquare account. I’m confused by what advantage actual cards would provide?!
The smart move would be to use the link between your credit card and your Foursquare account to automatically check you in to a venue when you pay for something there with your card. This would really help Foursquare keep getting better data since it would make the process of checking in automatic.
The advantage of having actual cards is that they own the relationship. They can have Visa/MasterCard or American express sponsor the card.
The difference between the deals Foursquare currently does and what I am proposing is the connection of rewards from multiple merchants. Just like the airlines have.
So for instance, a purchase made at a barber in New york can count towards an ice cream purchase in San Francisco.
Tying it all up in a payment card (before NFC goes mainstream) will make it work smoothly I believe.