When Dennis Crowley, the CEO of Foursquare, visited the Mobile World Congress in Barcelona last year, he told me he spent a lot of time explaining Foursquare to the operators and vendors that are the main visitors at this event.
This year, he said the number of business cards he was handed was “like this,” making a big C-shape with his index finger and thumb. Why the change? “I think we are one of a handful of companies that builds products that would actually encourage people to upgrade their devices,” he said. That’s an important fact to remember as smartphone penetration continues to grow and takeup slows down, specifically in the developed markets where Foursquare has most made its mark.
That growth in reputation has been matched by a growth in Foursquare’s business: the company has tripled its numbers in the last year, going from “around five million” to more than 15 million, Crowley said.
That’s something that is impressing investors, too — with news that Spark Capital is reportedly buying up employee stock. But perhaps more interesting, he says, is that the company is starting to notice a marked change in behavior:
“People are using the app, but they’re not checking in,” he told me. “I asked myself: did we break something? But in fact, it’s because people are using Foursquare to look for where their friends are, to find things, and as a recommendation service. It’s almost like it doesn’t occur to them to check in.”
Crowley compares this to the moment on Twitter in 2009 when the service suddenly shifted gears, and it was not about the number of people tweeting but about how many are reading those tweets.
“When you start, you are so focused on engagement,” he said. “Then you hit this point when you are big enough and say there is something awesome going on anyway. At some point you look and say, oh wow, the consumption model is actually taking off.”
That seems to fit well with Crowley’s vision of how Foursquare is going to grow in the near future.
Some social media sites like Facebook have made a big effort to net in members using whatever means possible — so, for example, you get pared-down Facebook experiences delivered on some of the most basic phones around.
But Foursquare seems to be more interested in behavior than the scale: “We want to change experiences,” he said. The best way to do that, Crowley added, is to use maps, access to GPS and the other sensors you have on smartphones. “We want people to use the stuff we build, and to do that you have to focus on the great things,” he said. “These are not toys; they are big defining features that are changing the tune on location services.”
That has so far taken the company to making apps for most major mobile platforms, and while some of those are seeing especially strong usage in particular markets — BlackBerry usage, he says, is highest in southeast Asia and Brazil — by far the most popular platform is iOS.
But that growth has only partially manifested in staffing: Foursquare has gone from 18 people eight months ago to 100 now, but some big holes remain. There is, for example, only one business development guy in Europe, Omid Ashtari, who apparently currently works out of Soho House’s East London outpost, Shoreditch House (Foursquare also has a BD intern in the UK) . There are also some key engineers coming on board from Google and other places.
And, that growth is slowly but surely starting to emerge as monetization on the platform, too. Crowley says that so far there are already 750,000 merchants registered on its platform, and most of that growth has been viral, without a sales force driving it.
None of those merchants are being charged “yet”, but he said but he said Foursquare will probably start experimenting later this year with new features that will be charged.
He said he’s confident that there will be a market for this because there are already companies calling up asking what they should be budgeting for the services — even without them launched.
What will those features be? The kinds of tools you are already seeing around retail engagement, but with a Foursquare flavor: “We have enough check-in data to make some amazing stuff,” he said.
It sounds like the data will take the form of a kind of dashboard that would segment customers and popular items. Whether the connection to the Foursquare app makes either that data easier to collect, or more unique than what can already be gathered by the businesses themselves through their loyalty programs, is the big question.
But if it appears that Foursquare is becoming a more commercial network, one thing that Crowley says it won’t be in the near future is a way to pay for things. “It’s not something we are actively working on,” he said. “It’s the bottom of the funnel for us and if we did something it would probably be in partnership.”
That is probably a good thing, given how many other companies are piling in on mobile payments now, not just operators, but credit card companies, startups, and if you believe the WSJ today, big retailers like Target and Walmart.
But as a measure of how far he seems to be from this scene, he is pretty dismissive of NFC — a big topic this last week at MWC — when it comes to making transactions if a credit card works just as well. He can however see the merit of “tap to checkin/save/share” places. “I prefer to find solutions to actual problems that exist.”
[Note: The second, non-financial part of using NFC is something that wasn't in the original post but it is something Dennis and I talked about, and he asked me to include here to make it clear that he's not totally against NFC.]
[I'll be posting a short video from our conversation soon, with material not in the story. Watch this space.]
Foursquare is a geographical location based social network that incorporates gaming elements. Users share their location with friends by “checking in” via a smartphone app or by text message. Points are awarded for checking in at various venues. Users can connect their Foursquare accounts to their Twitter and Facebook accounts, which can update when a check in is registered. By checking in a certain number of times, or in different locations, users can collect virtual badges. In addition, users...
Dennis Crowley is a co-founder of Foursquare. Previously, he co-founded Dodgeball, a network of the same nature which sold to Google in 2005. He has been named one of the “Top 35 Innovators Under 35” by MIT’s Technology Review magazine (2005) and has won the “Fast Money” bonus round on the TV game show Family Feud (2009). His work has appeared in The New York Times, The Wall Street Journal, Wired, Time Magazine, Newsweek, MTV, Slashdot and NBC. He is...
Founded eight years ago, Spark Capital is a leading venture capital firm focused on early stage startups. Spark’s portfolio includes companies such as Twitter, Tumblr, Foursquare, AdMeld, OMGPOP (acq Zynga), ThePlatform (acq Comcast), and 5Min (acq AOL). With offices in Boston and New York, Spark invests across the globe and across stages, from a $250k active partner at a seed stage, to $25m to establish category leadership. Spark’s tight-knit group of partners focuses on a number of areas including: advertising...
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