Is Foursquare Just Another Pretty Face?

By On June 20, 2010 · 24 Comments

Foursquare is the new hot girl at the party and everyone is looking at her. Everyone is saying hello. Everyone is flirting. AND everyone is wondering if there is really anything more there than just a pretty face.

Are some retail stores seeing a small bump in sales? Yes.

Are some larger brands getting nice PR bumps because of the unique ways they are engaging? Yes.

There is a whole list of Foursquare case studies with companies, large and small, experimenting in the space. But is Foursquare a legitimate marketing tool or just another game? Another niche tool for geeks?

Two big questions.

1. Will Foursquare grow beyond being a subset of Twitter users?

This is crucial. Foursquare’s benefit to businesses is based on data and using that data to make money either through loyalty (old customers) or advertising (new customers). The real money for Foursquare is in both the advertising opportunity and the ability to scale the service large enough for a freemium business dashboard to create revenue. Hopefully both happen.

In order to get to either place and create real revenue, scale is crucial. And scale does not exist if the majority of users are the same early adopters and techies that drive Twitter.

2. Do people really want to open up their location to businesses?

One of the key benefits of Foursquare that may help it gain mainstream adoption is how useful it’s data can be to consumers. Knowing where all your friends are or who has suggested positive things about restaurants near you are powerful motivators for members to share their location.

But, sharing that same info with businesses that might contact them without opting in, or with businesses pushing them ads is a different story. We have seen the Facebook uproar recently. Foursquare has not shared too much of this data with businesses yet. But it is important to consider how a larger user base will react to Foursquare opening up their data. To make money they need these options.

Will Foursquare overcome these challenges to be the next Twitter, the next Facebook? Or is it just another pretty face?

 

Image Source: ShutterStock.com

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  • Gabriel L

    Overcome these challenges, no doubt!!!!

  • http://mediafunnel.com Derek

    I don't see it as the next FB or Twitter, but I do think they will be successful in helping local businesses build better relationships with their customers. And I know of a number of people who think Twitter is silly, but will use a geolocation app if they can get deals from businesses – so perhaps the challenge is building up that set of users.

  • http://jojet.com/ @joel_hughes

    Hi,
    “1. Will Foursquare grow beyond being a subset of Twitter users?”
    It is is misconception to think that all users of Foursquare are (or “have to be”) users of Twitter; this is not the case at all. You can have a 4SQ account without Twitter or Facebook. Furthermore (and this is perhaps a little strange) 4SQ allows you to register via “Facebook Connect” and not “Signin via Twitter”.

    “2. Do people really want to open up their location to businesses?”
    Don't they do this already? If I shop somewhere don't they know EXACTLY where I was…and when? 4SQ is should another way of them getting this data. Will people want to open up their location to business? If the venues make it worth while the answer is “yes”…people want to know “what's in it for me?” (and quite rightly).

    Joel

  • http://www.justinmchood.com Justin

    Great questions. Ask me the same questions in a year and I will know the answers…

    And call myself an expert to go along with it.

  • http://www.istrategy2010.com Anthony

    The answer to 1 relies on Facebook… If they are rolling out these location based features to their users they should really acquire Foursquare for their infrastructure & passion – however that remains unlikely going of FB's history…

  • http://budurl.com/ynfr Megan Zuniga

    I never liked Foursquare. To me, it's like a stalker's dream come true. If they fix it up to protect the privacy of its users, it'll probably be much better. And I seriously doubt it will surpass Facebook, or even Twitter. And even if Facebook tramples on people's privacy, at least it won't give away your position to the whole world.

  • http://jasonkeath.com jakrose

    How would you like to see Foursquare improve privacy?

  • http://jasonkeath.com jakrose

    How would you like to see Foursquare improve privacy?

  • http://jasonkeath.com jakrose

    It does seem like a pretty solid match for Facebook to buy Foursquare.

    So you think Foursquare or other LBS's are unlikely to scale on their own?
    It would take an existing scaled network to impliment?

  • http://jasonkeath.com jakrose

    It does seem like a pretty solid match for Facebook to buy Foursquare.

    So you think Foursquare or other LBS's are unlikely to scale on their own?
    It would take an existing scaled network to impliment?

  • nielr1

    One thing I think is important to track is the network effect utility of Foursquare. Right now i use FS mostly because of few of us battle for Mayor at the @Trada office and that's fun. But when a new user joins FS i think there is little incremental value to me (yet). This is the opposite of Facebook where each new user (perhaps in my sphere) is someone that i can really interact with. FS is still looking for that killer feature, IMHO, that creates that value. I'm not sure if that's integrated IM, recommendations, etc.. I suspect its in there somewhere but the business won't scale if this effect does not occur.

    Niel
    nielr@trada.com

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  • JackieTEwing

    I believe FourSquare is here to stay. It will grow and develop along with it's users. Right now, it's a little bit of fun that takes only moments of your day. I'm watching it and using it and will be recommending it to clients that can benefit from it.

  • steve_alter

    I think the bigger question is how Foursquare maintain the quality of their service so that more mainstream users want to participate. The service still isn't broadly adopted, yet there is an unbelievable amount of gaming and abuse that's going on – false checkins, fake venues (movie theatres, ferries) created to get badges, multiple venues created by a single user at the same address, etc. Not only do they not have any kind of quality assurance built in to the process, but the “community” they're empowering to do some of the QA are often the biggest violators.

    Foursquare only has value to users if their actions mean something, and only had value to business if there are a lot of users. If they don't start focusing on the quality of the customer experience so that it's trusted, questions 1 & 2 will be irrelevant.

  • http://twitter.com/eric_andersen Eric Andersen

    Great point on the subset question. It gets back to one of those Foursquare demographics questions – where so little is known. Just a simple question of what percent of Foursquare users have a Twitter account (or, in this case, link their Twitter account to their Foursquare account, otherwise you don't know)? I wonder if this is even 50%. Which implies that Foursquare growth is only partially tied to Twitter community/tech early adopters

  • http://bnrbranding.com BNR Matt

    I think Foursquare is definitely intriguing for businesses, but, speaking as a private person, I find the habit of linking Foursquare updates to Twitter to be very, very annoying. Most of the people I follow are people I find interesting for the content they produce, they're not personal friends, and knowing when they're at the grocery store really isn't high on my priority list.

  • http://jasonkeath.com jakrose

    I agree. the auto update feature is clearly on the way out though. It is
    only valuable to me if they are including some type of tip.

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  • http://www.spotpulse.com Roger

    I agree I think just like any other social network it becomes valuable when you are able to connect with other people.

  • nielr1

    I am out of the office until Sep 7th. I will have limited access to phone and email. For sales related matters please email sales@trada.com. For all other urgent matters please contact mlawless@trada.com. For personal emergencies please send me a text message.

  • Carin

    If Foursquare can keep it cool and fresh by making sure that consumers can opt in or out might make it viable. But if they allow businesses to “spam” consumers the service will be ruined for consumers.

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    Many of my friends like foursquare. So I think it’s quite good.