Foursquare

What Foursquare Needs to Do

By Mark Evans in Social Media 1 Comment Tags: , , , ,

Armed with more than $15-million of venture capital (after allocating $4.6-million to founders), Foursquare has the financial muscle to turn what has been an interesting service into a viable and vibrant business.

Even though Foursquare has about two million users, it’s really still more of a social media novelty. While I guess it’s cool to broadcast to the world the places you visit by checking-in, the novelty has to eventually wear off. Then, what?

If I had $15.4 million of cash in my pocket, here’s what I would do to Foursquare:

1. Establish more partnerships with content and data companies to enhance Foursquare’s usability and features. While tips by users about a particular place are interesting, Foursquare would be a lot more valuable if it offered in-depth information and reviews from well-respected sources.

2. Provide information about not only a particular place but other nearby places. If someone has checked into a movie, present them with information about cafes, restaurants and bars in the same neighbourhood.

3. Make it easy for retailers, attractions, venues, etc. to build out a strong presence. This should include premium features for retailers to add more information. As important, provide them with user-friendly tools to set up marketing and customer acquisition programs. For example, make it a breeze to create coupons and loyalty programs based on someone’s Foursquare activity.

4. Create an in-depth analytics service that retailers, et al can use to learn more about what Foursquare users are doing. Foursquare should also offer premium analytics services to access customized data and reports.

5. Establish a self-serve local and national advertising platform with a variety of business models – a flat rate for local, regional and national coverage, as well as pay-per-click.

6. Drive marketing partnerships with major brands looking to engage with consumers. A good example is a recent agreement with Mattel, which will use Foursquare to offer a scavenger hunt to promote the new Barbie Video Girl doll.

What do you think Foursquare should focus on?

Foursquare Founders Score!

By Mark Evans in Social Media, Venture Capital No Comments Tags: , , ,

A key part of the start-up ecosystem for entrepreneurs is building a business with two goals: create something that’s viable, profitable and sizeable, or create something that someone else finds valuable enough to purchase.

These goals keep entrepreneurs engaged and motivated.

If you buy into this thesis, Foursquare’s latest $20-million financing round is, at best, puzzling. Of the money raised, the SEC filing says that $4.6 million of the gross proceeds will “be used for payments to any of the persons required to be named as executive officers, directors or promoters”.

Translation: The founders are already cashing out.

Yup, that’s right: the founders are being lavishly rewarded for a start-up with two million users but no business model or revenue. It’s nice work if you can get it but it does make you wonder whether how much less motivated the founders will be now that they a lot of cash in their jeans.

For more thoughts on the deal, check out Mark MacLeod’s post on StartupCFO. He says that: “I have to believe that in “rational” markets this deal would never have happened. This company could still completely blow up. In which case the only people making money on it would be the founders. Just doesn’t make sense to me.”

Silicon Valley’s Obsession with Free

By Mark Evans in Social Media, Venture Capital 2 Comments Tags: , , , , ,

Let’s get the facts straight here: Foursquare doesn’t have to have a business model, it has “only” 1.5 million users in a market that appears to be a more niche than mainstream….but it still manages to raise $20-million in venture capital in a round led by Marc Andreessen and Ben Horowitz.

Call me a skeptic but I don’t get it. It’s hard enough attempting to justify why Twitter has attracted more than $100 million in venture capital but at least it has 125 million users around the world. Nevertheless, there appears to be widespread enthusiasm for the deal.

The reality is none of this really matters to Silicon Valley, which invests in potential and possibilities even when the rest of us are scratching our heads. This is what makes Silicon Valley, Silicon Valley, and probably why the success rates within venture capital are so low.

Foursquare is another example of how start-ups that gain traction with a free service are so difficult for evaluate financially. Even when they are wildly popular, investors need to take a leap of faith in their continued growth and their ability in getting users or advertisers to start paying for the privilege of the service, its users or features.

Sure, there are a variety of potential business models for Foursquare such as local advertising and mobile commerce but it’s just talk until the money starts flowing in.

Silicon Valley, however, loves sexy stories with buzz in emerging markets – even if it is still unclear about the economics of these markets.

Hats off to Foursquare for raising $20-million but the one stark truth is money can’t buy happiness, and as Twitter has discover, it can’t buy a business model that will validate the venture capital being raised.

As much as it might be difficult to avoid the temptation to invest in Foursquare, particularly for anyone who missed out on Twitter, it’s still a risky investment given it is uncertain whether Foursquare is a novelty or business.

FourWhere Opens the Location Door

By Mark Evans in Social Media 1 Comment Tags: , , , , ,

One of the biggest issues with the growing number of location-based services (Foursquare, Gowalla, Yelp, Blippy, etc.) is how difficult it can be to be a “watcher” as opposed to a “participant”. Many people, including myself, have no interest in broadcasting their locations publicly, but would be interested in seeing what other people are doing and what they have to say about the places they visit.

The solution to the watch vs. participate dilemma is FourWhere, a free service created by Sysomos (a client) that makes it easy to see the places visited and commented on by people using Foursquare, Yelp and Gowalla. Using data from the three services and the Google Maps API, FourWhere provides a user-friendly way to access the location-based world without having to register for Foursquare, Yelp, Gowalla or FourWhere itself.

FourWhere is easy to use. All you do is search for a city or address. When you click on any of the red dots on the map, comments appear about a particular location from Foursquare, Gowalla or Yelp users.

FourWhere launched in March featuring information from Foursquare. The response was so enthusiastic that work soon started adding Yelp and Gowalla, and updated version of FourWhere launched earlier this week.

For more coverage of FourWhere, check out CNet in which John Lowensohn said he:

“really like the idea of having one place that aggregates not only the tips from these sites, but, more importantly, the check-ins. When done right, and given a sense of time, Fourwhere could prove itself as a very powerful tool for showing what’s hot and what’s not based on a much larger group of users than any of the three services could offer on their own.”

Anyone Still Excited About Foursquare?

By Mark Evans in Social Media 3 Comments Tags: , , ,

The South by Southwest conference was supposed to be the coming out party for location-based services such as Foursquare and Gowalla. But, for whatever reason, it failed to really capture the imagination of the digital geeks.

Not surprisingly, the lack of enthusiasm has also meant the buzz about Foursquare, Gowalla and location-based services has been, at best, muted. My theory is that, for now, these services are novelties that come on and go. There is some chatter about Blippy or Swipely, and then it disappears.

The biggest problem is broadcasting your location isn’t enough to keep people coming back. After you’ve “check-in”, there needs to be more “meat” to keep people engaged and interested. The big question is whether Foursquare, et al will be able to attract people back for the next chapter when there is more content available. Given how fickle online users can be, it is difficult to get people to come back for a second look if they were less than impressed the first time around.

Another theory for lack of interest may be that people who would use location-based services already have their hands full with Facebook, Twitter, blogs and YouTube. As result, they don’t have the time or interest to get involved with yet another social media service.

While Compete.com is not a good barometer of how much traction that Foursquare and Gowalla are getting given both are mobile tools, both of them only have a modest of amount of traffic, which has slipped recently.

So, what’s your take on Foursquare, Gowalla and the located-based services market? Is it still early days or are they simply not finding a big enough audience?

A Fork in the Road for Online Privacy

By Mark Evans in Social Media 3 Comments Tags: , , ,

There are times when I feel like an outlier compared with my digital peers.

At a time when many of them are happily sharing all kinds of information about their professional and personal lives, I have been fairly cautious about showing all of my cards to everyone on the Web because I think there should be a healthy divide between our public and private lives.

In many ways, I’m on the outside looking in, particularly compared with younger people who think nothing on sharing everything and anything, particularly on places such as Facebook.

While I’m still trying to digest all the news coming out of Facebook’s F8 developer conference yesterday, it has become apparent that online privacy has come to a serious fork in the road with two distinct paths.

One path that is we surrender our online privacy, and live with the reality that everything we do and disclose online will be available to anyone. The second path – and one that I don’t see happening – is people wake up to the new reality that online privacy could be a thing of the past, and the pendulum swings away from full disclosure.

As much as online services such as Facebook, Blippy, Twitter and Foursquare are interesting, entertaining and valuable, they’re also companies in the business of data and, increasingly, they are sharing and aggregating the information that we happily provide them about our interests, purchases and activity.

All of this activity is happening behind the scenes but few people seemed concerned about our data being used this way. Perhaps I’m overly-concerned or maybe ahead of the pack but sooner or later people should start to realize that the stuff you share online is being used in many different ways by many different companies.

If you can live with having a public and social existence carry on but if you have any concerns about privacy, it’s time to wake up and smell the coffee.

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