Foursquare’s business looks a whole lot different than it used to. New CEO Jeff Glueck and co-founder Dennis Crowley know it — and they still have a plan to hit $100 million in revenue, and profitability, in the next few years. They talked about some of their efforts, like focusing on building new tools for businesses that can help them grow, onstage at TechCrunch Disrupt NY.
Previously a service centered around checking into venues, Foursquare has since seen its business shift toward building a suite of developer and enterprise tools on top of its consumer-facing apps. Foursquare’s most recent noteworthy event was its last round of financing — where it raised $45 million, but saw its valuation cleaved roughly in half. And that’s not that surprising: Instead of being valued as a social network, Foursquare looks somewhere between that and a SaaS company, which naturally has a different valuation multiple compared to companies like Facebook or Twitter.
“The business previous was valued on this idea that the Foursquare app would grow up and be a Facebook, Twitter, Snapchat,” co-founder Dennis Crowley said. “What we realized a few years ago was, that wasn’t the destiny of the apps. We don’t need 100 million or 300 million people to use it every day to make a profitable business. We talked to investors, asked, what is this business? What Jeff and I had been working on is how can we build these amazing consumer apps, throw off tons of data. We were working on how we could monetize that data through relationships with developers and enterprises. That’s been working out fantastically well for us. As part of that, we had to reset the expectation to valuation.”
Foursquare has a whole suite of analytics products, with developer tools that power hundreds of thousands of apps. With those tools, Foursquare is able to accomplish a lot of analytical feats, like predicting the number of iPhones Apple would sell in a quarter based on foot traffic, or how well McDonald’s would fare with all-day breakfast. It’s those kinds of tools that will help propel Foursquare’s business forward, Glueck said.
“All these cultural trends, we’re able to capture it, and if you can’t figure out how to build a profitable business with that data, you should probably go home,” Glueck said.
For the most part, Crowley and Glueck were on message for the company, which has faced some challenges as it transitions to a new style of business. But with all that funding, Foursquare plans to not only staff up, but expand internationally. The service works in more than 110 countries, and now plans to further expand into Asia, hiring people to run business development for the country. The hope is that, with all those efforts, Foursquare will be able to hit its $100 million in revenue target and become a sustainable and profitable business.
“We see a direct path to that,” Glueck said. “Part is earning our way to creating a sustainable business to keep investing, in the last two years we built enterprise and media products that grew 160% in revenue last year, they’re a majority of our revenue now. We also know we have investors, we have an obligation to be here for the next 20 years. That balance is a hallmark of what [Crowley] and I have been cooperating on for past two years: build a sustainable business and keep inventing future of how mobile changes the real world.”
If the company were to go back and do it over again, Crowley said they would still split off its original app into two: Foursquare and Swarm. Each serves a different purpose for a different kind of user, with Swarm being more like a game and Foursquare being more of a city guide, Crowley said. But there was confusion around the new products, which led to a dip in usage, Glueck said, but the company has since rebounded. The company tripled checkins per US user in 2015, Glueck said.
As Foursquare’s valuation dips, it naturally becomes a more attractive acquisition target for the right kinds of technology and assets (hint: Foursquare’s treasure trove of data). But Crowley and Glueck’s goal is still to build a sustainable company, the pair said.
“A big part of what we did with this financing is to get it on the road to being a big strong independent company,” Crowley said. “That’s starting to happen, we found a business that works really well, everyone’s really excited about building this stuff, we have those conversations from time to time but a big part of raising the financing is, ‘hey, let’s go and do what we set out to do.'”
Correction: Clarifies Glueck’s statement about check-ins growing since the Swarm split. The company tripled checkins per US user in 2015 after seeing an initial drop following the split. The article previously stated that user check-ins tripled as a result of the split.