Yeah look. I love Foursquare, I use it every single day. I love “checking-into” locations all over town, seeing who has been there, who the Mayor is, and especially the tips people leave around town. Whenever I hit a new restaurant, the tips are particularly helpful in successfully navigating a new menu. If enough people tell me the Truffle Mac and Cheese is a can’t miss, guess what? I’m getting the Mac and Cheese. I’ve even been known to leave some funny, snarky tips around town to let people know that I’m around having fun, with them and the service itself. Foursquare is getting the most press out of any social-internet company and, they’ve just celebrated both their 1-year anniversary and their 1 million user mark.
Which is why I am befuddled at some of the partnerships and directions the young company seems to be taking. I am not sure if it is due to their tremendous growth, both in users and internally, or the ridiculous expectations that everyone seems to have, but Foursquare doesn’t seem to know what its doing. I wish they would just tell us. Isn’t the hallmark of the social web supposed to be that everything is open and transparent, authentic and honest? Is that only for the users of these services but not for the companies that enable us?
One could look at Twitter’s own recent missteps and see them as either corporate incompetence or growth pangs. As startups progress from edgy outsiders with visionary and benevolent goals to corporate behemoths with investors who require a return, all companies must struggle with this tension. Simply witness Google’s own struggles to maintain their corporate ethos of “Don’t Be Evil,” with issues of security and privacy breaches. Of course, Google has seen the error of its previous actions and decided to end cooperating with the Chinese government over Google’s user information.
Foursquare needs a similar self-correction. And soon. I understand that user-growth is still the primary objective down at Foursquare HQ but I still think they are missing out in filling important holes. So many venues still have yet to hear about Foursquare let alone start implementing specials or utilizing the dashboard. And this is where their revenue, if there ever is to be any, is going to come from.
And yet, Foursquare has seemed more interested in high-profile partnerships with big media and luxury brands like The New York Times, Bravo, VH1, Marc Jacobs and now Jimmy Choo:
Using location-based social media tool Foursquare, Choo has created a real-time “treasure” hunt around London. The concept behind the promotion? Over the next few weeks, one pair of Jimmy Choo trainers will “use” Foursquare to check-in at points around London and send real-time updates so participants can locate them. The trainers can also be followed on Twitter and Facebook. Those who reach the venue in time to catch the Choos will be able to keep them.
What is the point of this garbage? Do they really think this is the way to go mainstream? Or are they simply interested in amassing a roster of $10k a month branding entanglements just because they can? I really don’t understand this, of course, I’m not that smart. But I am interested.
I am interested because I think incentivizing both people and businesses is they to Foursquare’s growth and its success. But that’s not where they are directing their energy. I’ve worked with businesses who have tried multiple times to get their specials on Foursquare. The customer service is basically non-existent. One client got a message saying they were simply overwhelmed and were having technical issues uploading all the new specials and deals. The risk in this is that even if you can get venues interested enough to take the time to offer specials and deals to Foursquare’s own users, by making it extremely hard to do so, they are only alienating their future business partners.
Eventually, Foursquare will want to share in the revenue streams they are directing towards local businesses. Not concentrating on those relationships now is going to cost them, mightily, later.
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I don't know, man. They're picking their alliances. I don't think jimmy choo money is enough to change the direction of the biz, I think choo is exclusive and they're building an exclusive client list. I understand the WSJ pick less.
alliances for what?
Um. This is one of those situations where it's hard to come up with a polite way of saying “you couldn't possibly be more wrong.”
Foursquare knows what they're doing. *You* don't know what they're doing. This is, arguably, a distinction worth making.
First of all, if they can continue to have successful partnerships with huge corporations, why couldn't that be their main revenue stream? I don't think it will be, but you talk as though there's a timer on their ability to get big partners. On the contrary, the more Jimmy Choos that partner with Foursquare, the more will want to.
Second, those high-profile partnerships are great publicity. They're helping to get Foursquare the notoriety that they need in order to attract the attention of more small brick and mortar businesses.
Foursquare does not need individual businesses; before long, it's going to be the other way around. Here's an article I wrote that goes into a bit more detail.
Michael
Some good points. I somewhat agree with the idea of attracting big partnerships as a way to go mainstream. But what about the charge I make that they should be more open with their plans, with their direction?
Z
It's easier for Foursquare (or any other startup) to work with big money from one client (Jimmy Choo) than spend time hunting down and implementing equally-complex promotions from 10 smaller brands, or 1000 local businesses.
Foursquare also needs increased awareness to bring in new users, and increased feedback from those users to increase their own relevance. If a Jimmy Choo campaign — and the PR surrounding it — gets them that recognition, so be it. Again, that's easier (and produces more buzz) than bending over backwards to find easy monetizing solutions for every corner bookstore and pizza shop.
When you want to be a brand name, brands matter.
justin
my mind is slowly being changed here
thanks for contributing
Z
There's a difference between a company being transparent about what kind of information they're collecting, or interacting with its customers in a public space, and spelling out their exact business plans. Much like Twitter, Google, and Facebook before them, part of Foursquare's model for early growth is to just be fun and interesting to use. Spelling out what's going to happen next would only dilute the basic directive to get users to understand basically what it is, and why they would want to use it in its current form.
Anyway, you can disagree about the principle of how companies should behave in order to appease your sense of fairness, and there's no bottom to that argument. But it's also not the same as saying that they don't know what they're doing, or that what they're doing isn't working out for them, neither of which is true.
hmm, im thinking
You do realize foursquare didn't do anything for this “partnership” right?. It's like you announcing a partnership with twitter.
This is Jimmy Choo making use of a new social media tool.
relax.
ha, well, im thinking about the string of them, bravo, vh1, the new york
times, its not about jimmy choo
its about why are they not doing what they should be doing in my opinion.
ive gotten some great comments here that are starting to make it a more
clear picture, but something doesnt add up
Z
I think some of the new features they have in the works that were rumored at SxSWi this year will quash any and all of this hub bub. Anyone that was inquisitive, helpful, observant and participatory in the game over the last year already knows what's up. Just shut your pie holes and keep playing, it's about to get really crazy!
Not obvious that attracting brands like Choo (and the customers who buy them) will do anything whatsoever to get the local diner in Des Moines to adopt FourSquare in any meaningful way – never mind pay for a dashboard – nor does that mean it'll be attractive to its customers.
The whole equation of “notoriety leads to popularity leads to revenue leads to mainstream adoption” is definitely missing a few variables.
Mark
I think that is exactly the logic that I am questioning. Thanks for articulating it for me!
Z
ive been all of those things and I don't know whats up
The local diner may not care about Foursquare's big corporate partnerships. But those partnerships will foster a mainstream awareness of the service. Foursquare users will start checking in at the diner, because they'll be checking in everywhere. And then Foursquare will approach the diner and say hey, we literally know who many of your customers are, would you like to advertise to them? Would you like to advertise to people who are browsing in the bookstore across the street? Maybe you'd just like to look at the analytics to get a sense of who's coming to your diner, or maybe you'd like notifications whenever something new is posted about it. Maybe you'd like to offer a special to the 100th person to check in, or to your most frequent customer, or whatever.
Not all businesses will find these offers attractive, at least at first, but many will. And even that is really just the tip of the iceberg.
you are assuming they are WAY more capable then they are. They are tech
heads and geeks, not local business salesman. My take on it is that they
have avoided it because they can't do it. and thats a major problem
Z
They haven't avoided it, they just haven't made a full court press. Here in NYC, and especially in Brooklyn, Foursquare promotions sponsored by local businesses are all over the place.
yeah thanks
im on the upper west side and have been writing about Foursquare (about 7
essays) since the beginning of the summer. But appreciate the insights.
Do you think the Foursquare promotions currently in use are really that
great? Foursquare has changed my behaviors, foursquare promotions haven't
changed shit
Z
It's a matter of time. This is like hearing someone say in 1992 that email hasn't changed the way they do business. Foursquare is still largely in an early adopter phase.
i think they could be doing a much better job both of communicating to those
early adopters and to the businesses they'll eventually be working with
Love a good discussion/debate that's actually respectful. IMO I think the logical flaw here is that “mainstream awareness of the service” does not necessarily translate to mainstream ADOPTION of the service. I think Twitter has the former but certainly not the latter yet. Not sure FS will get it either. Even if biz starts making accounts, they have to see results, get customer service from the provider, etc. It's far from clear that Twitter and FS and others will become “communications infrastructure” like Verizon or Comcast.
well said, and Michael, i hope you feel this debate is all in good fun, i
certainly do.
having implemented foursquare with several clients ( i work with a lot of
restaurants and hospitality brands) i can tell you that the ROI, as of now,
for foursquare is very low. Almost non-existent
I think it would be rather difficult to measure ROI in a situation like that. Foursquare isn't really a direct marketing platform, at least at this point; it's more of a branding platform.
Union Hall, in Park Slope, was the first business that I saw an ad from on Foursquare, offering a free beer to the mayor. Because of that ad, I have gone there for drinks more often than I would have otherwise. Theoretically, they might have seen their Foursquare traffic increase after placing the ad, and it's conceivable that, as the result of patronage from people like me, their revenue went up, and they could have theoretically done an analysis speculating on whether the additional revenue has surpassed the cost of placing the ad.
Such analyses might be fun and somewhat educational, but I wouldn't take them to be remotely accurate, especially at this point, when the usage of Foursquare itself is on the rise. Someone might need to see that ad twenty times before they act on it, and then they might frequent the establishment twenty times before they start spending real money there, or recommending it to friends, or writing a Yelp review, or writing a Foursquare tip that will be pushed to their Foursquare-using friends when they are in the bar's vicinity. And then, how long before the revenue from those things gets on the radar, and how will the management of Union Hall be able to tell the difference?
There are answers to these questions, sure. But they are soft answers. Branding ROI is hard to measure, especially in areas where there isn't a lot of data or precedent, and, per the article I linked to in my first comment, small brick and mortar business are not used to branding. You might not be able to measure the ROI on an informational website or a legible sign on the door, either, but they're still worthwhile investments.
thats a whole lot of non answers.
first of all, it doesn't cost anything for the business to place an ad on
foursquare, at least not yet
and they already have a dashboard for businesses.
ive seen them, ive worked on them, the ROI is very thin. And YES foursquare
is a direct marketing platform
This is all anecdotal. But. I was in one of the most progressive (on paper) places in DC using FourSquare the other day. They have a glass of free wine for the mayor, a free app for your fifth visit, and something for your second check-in. Really cool, right? Not only that, but *on the bar* they have signs with the FS logo advertising what the specials are.
But when I asked the regular bartender (who I kinda know) what she thought of it, she had no idea what FS really was. “I don't get it.” This is the kind of hot chick that (1) rules bars and WOM associate with them (2) has no need for this kind of technology in her life.
When I asked her who was responsible, she thought maybe the other bartender. But when I said, well, someone in management mustve done it, since you're giving away freee stuff, she honestly had no idea, really didn't get it, and said that if basically anyone came in with a phone and said they were doing something on FourSquare, she'd just give them whatever.
This is why FS will probably never go mainstream. This is a smart girl in an upscale place in a great neighborhood in a major metro area. Yes, anecdotal, but I don't think she's alone. And if they're not into it, this will not be nationally mainstream. Not in a million years.
exactly! business get no training from foursquare, businesses can't train
their employees, employees stare doe eyed at customers
Z
I didn't say direct marketing; I said direct response. Communication to the customer is direct, but how exactly that translates to revenue is hard to quantify, because the related spending may not be immediate, or in a context that is directly associated with the marketing message.
This is kind of like hearing that the person selling popcorn at a movie theater doesn't know what Fandango is. It might be marginally beneficial for that person to understand the company's promotions, but in general, that's just not what it's about.
Foursquare is following basically the same model as online publishers: you get the end-users interested, and when you have achieved a significant amount of scale and targeting ability, advertisers who want to reach the audience you've found will see the value. Foursquare is not focusing on the small business customers yet because they are still building the general user base that will make their services so valuable to those customers.
true dat!
This may be true, and I think I understand your frustration in that regard. You have clients who have the potential to be Foursquare partners, now or later, and you want to advise them. Foursquare is not helping with that. I can see how that would be annoying.
It's interesting that you highlight Jimmy Choo, when that one actually seems to make the most sense. Jimmy Choo is a retail brand, and getting users to check in at retail locations on a “hunt” for Jimmy Choo products make sense. I don't understand the BravoTV badges or the NY Times all that much, but we'll see whether they actually increase FourSquare awareness and usage — which hopefully are the company's goals.
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