Untitled #470: On Foursquare


Being a post against the possibility that enough hasn’t yet been enough written about foursquare in the past few days.

In the post that launched a thousand VCs on to foursquare, Charlie O’Donnell both neatly outlined a compelling analysis of foursquare’s potential as a real, money-earning business and articulated some areas of concern for that business. [If you haven’t read the post, you really should. Like, now.]

I won’t try to summarize Charlie’s post, but rather push in the direction that I think logically follows from his thoughts: foursquare’s potential depends on the service tackling a couple of interesting challenges head on:

  • If your revenue is going to come from selling to—or, if you prefer, selling access to—your users, rather than directly from the users themselves, you’ve got a balancing act on your hands. You’ve got two constituencies to please, and their needs and interests are often going to be out of alignment. A common issue, but it’s handled very, very badly much of the time.
  • As foursquare becomes a real, money-earning business, I suspect that its users will start expecting more from the service in return for their no dollars a month. I think that foursquare’s game structure is great, but once you become a Legitimate Business, people tend to start eyeing what they’re getting from the service with a little more skepticism. [Bonus: I’ll buy a shackburger for the first person to correctly identify the joke I deleted from this point.]

Happily for foursquare, the best way to start digging in to the two points above is to realize that they’re intertwined and can <coughshouldcough> largely be addressed as a package deal.

As Charlie suggested in his post, foursquare is in no small part exciting as a business because it’s about data. Users are rewarded (right now with badges and mayorships) for dropping breadcrumbs about where they are and what they’re doing; that same data, viewed through a different lens, is extremely valuable to a variety of other businesses.

The incredibly cool part—and again, Charlie hit this one, but of course you know that because you’ve read his post now—is that this same data can be extremely valuable to users even if those users couldn’t care less about what badges they’ve unlocked or how many mayorships they’ve racked up.

Thus far the foursquare guys haven’t done too much around exposing that accreted data to their users in useful ways, but that’s got to come in time. They’ve taken a good first step in this direction with an API that allows services like Social Great to build cool stuff while the foursquare crew takes an occasional nap, but I’m sure that a lot more is queued up in this direction. When foursquare’s rewards to users start really moving outside of the right now and outside of foursquare itself, things get really, really interesting.

Foursquare has a tough nut to crack in the selfish bastards syndrome, and a tougher one in the fact that they’re moving into pretty new and poorly understood territory, but whatever mistakes they make are likely to be interesting mistakes, and I’m looking forward to seeing how this plays out.

  • Nice. We sometimes call it data exhaust. And then we look for businesses that run data washing machines – cleaning it up – adding value to it

  • That's a nice one! A friend uses the term “geek droppings” in a
    similar way: the stuff–code, data, what-have-you–that you find can
    be used or re-used in ways you didn't expect once you started making