This hasn’t been a great year for Foursquare. “Check-ins are no longer what they used to be,” as Ingrid Lunden observed last month. There seems to be a general consensus that “Foursquare keeps resembling Yelp more and more…” but that comparison isn’t necessarily flattering, especially since there’s little doubt that Yelp has much greater public mindshare.
Then former Square COO and current Khosla Ventures partner Keith Rabois attacked them publicly (click through for the article’s amusing corrections, if nothing else!) prompting some bizarre musing from Michael Lazerow on when it’s OK for someone like Rabois to bash a founder.
(My answer, for what it’s worth: whenever he freaking feels like it. He’s not the Pope. He’s not the President. He’s just a venture capitalist. If you’re worried about public criticism hurting a company, then it’s built on apparent rather than real value and it deserves all the criticism it can get.)
Crowley responded, gamely:
Great tone…but I don’t know about that content. So the mighty check-in was just what filters were for Instagram, a gateway drug, to soon be replaced by “the location layer for the Internet?” Uh-huh. You know what that sounds like to me, in the long run? A map. Like Harry Potter’s “Marauder’s Map,” to use Crowley’s own words.
This does not sound like wise strategy. To paraphrase Paul Graham’s on-stage Office Hours at the last-but-one TC Disrupt, “Competing with Google. That’s not so bad. But you’re competing with Google at something they’re actually good at.” And, oh yes, also competing with Apple, whose maps have been steadily improving since their first stumbling introduction. Meanwhile, Google casually rolls out insanely great maps features like ski trails or underwater Street Views several times a year.
Does anyone seriously think, in the long run, that Foursquare has a better chance of “becoming the location layer for the Internet” than both Google and Apple, both of whom clearly take mapping extremely seriously? Anyone? Anyone? Bueller?
Yes, their API is exceptionally useful. I should know: I’m at least three of those 40,000 developers. But a great API does not a successful company make, and there are plenty of competitors; Yelp, Google Places, Factual, etc, although Foursquare is admittedly the most developer-friendly.
So I hate to say it, but Keith Rabois was one thousand percent correct. With their tactics struggling in the face of better-established competitors like Yelp, and their strategy apparently consisting of plotting a course between Google and Apple’s Scylla and Charybdis in a leaky drifting raft…what’s poor flailing Foursquare to do?
Funny you should ask. I happen to have an answer. And it is this: merge with Groupon.
Wait, no, hear me out. I know what you’re thinking: bad idea, or worst idea ever? and/or listen, buddy, two dumbs don’t make a smart. Groupon of course just fired its CEO in the face of sagging, well, everything.
But think about it. What’s one thing Groupon has that almost nobody else does? An existing relationships with an enormous number of small businesses. Frequently awfully contentious relationships, granted, but relationships nonetheless. What’s one thing that really defines Foursquare? Not the “location layer,” but the check-in. What’s a business model that just might work? Have users check in with intent — “shopping for my mother” or “hungry for lunch” — and promptly get deluged by coupons from a panoply of nearby retailers, and then collect a percentage of those sales.
Which is of course something Foursquare kind of tries to do already. (As of eighteen months after I suggested it.) But for it to really work they need a huge critical mass of small businesses to participate. What’s one thing Groupon kind of managed to do with its bizarre, multi-billion-dollar rise and fall? Connect to just such a critical mass.
Call me crazy. Call me a fool. But I think if these two long-term losers got together, they just might turn into a winner. It’s a longshot, sure — but it doesn’t seem much longer to me than believing that either has much of a glorious future on their own.