For a start-up that’s only a little over a year old, Foursquare has achieved some significant milestones. Launched in March, 2009, by founders Dennis Crowley and Naveen Selvadurai, Foursquare has over 2 million users who have checked-in to local businesses 100 million times. With an average of 15,000 new users signing up every day and contributing one million check-ins per day, Foursquare has successfully stirred up an addicting cocktail of location, gaming and social elements that’s being drunk up by its fast-growing membership in cities around the world. In fact, Foursquare is currently growing at a faster pace than Twitter did when it was about the same age, according to investor Ben Horowitz.
How Foursquare Works
After downloading the Foursquare application to your smartphone, click the “check-in” button upon arrival. You can’t cheat and check-in to a place you’re not at because Foursquare can tell how close you are or are not, due to your GPS-enabled smartphone. After you’ve checked-in to one particular place more than anyone else on Foursquare, you become the “mayor” of that place. Businesses that participate in Foursquare usually offer a prize for the mayor. For instance, at my local Starbucks, I got a dollar off my Frappucino when I became Mayor.
Part of Foursquare’s success lies in its addictively fun qualities:
When you become the “mayor” of a place, especially a popular place, you’ve achieved an elite status among your followers. When you oust the current Mayor, Foursquare announces the overthrow to your followers.
As you check-in, you can choose to broadcast your check-ins to your followers or not and you can choose to write comments as you check-in. Note: you can broadcast your check-in to your Twitter followers and Facebook friends, too (or not).
You can leave a tip about a venue (“This locally-owned coffee shop has a daily latte special for only $2″). The tips are public to all Foursquare users, even to those who are not part of your social network. The tips feature is very handy when visiting larger cities. Not sure where to have breakfast? Check out your “Tips” section to see what others recommend.
It’s fun to keep up with your Foursquare followers because you can see where they’ve checked-in in the last 24 hours or so. Those who haven’t checked in for a few hours are listed “off-the-grid.”
Why Broadcast Your Whereabouts?
Here’s why: chances are that you’re already participating in other social networks like Facebook and Twitter and connecting with people, sharing information and helping each other. Foursquare does the same thing except it’s more like a game. I must admit: it feels gratifying to win badges and receive discounts like special favors. This fact alone is what drives Foursquare users to educate businesses about Foursquare. WE are the sales team because we want to win discounts, products and prestige but we can’t do that unless the places we visit and buy from become Foursquare venues.
Businesses Benefits: Foursquare Users Spend Money and Share Data
Foursquare is banking on becoming your third social network: the third part of the trinity of Facebook, Twitter and Foursquare (yes, I’m leaving out Google because people don’t perceive of it as a social network, though it is). We enjoy peeking in on what our friends, followers and fans are doing and saying AND we are influenced by each other’s choices and opinions. We trust each other more than we trust what the venue or brand is saying about itself. Basically, we’re telling each other where we are and leaving testimonials about the places we’ve been, both good and bad–like an evolution of the iconic graffitti of “Kilroy was here.”
Foursquare’s Kick-Ass Funding Creates Excitement
After receiving a $20 million kick-ass injection of funding from venture capital firm Andreessen Horowitz in June, 2010, Foursquare set off to innovate its programming even more and stay ahead of copycats and second comers like GoWalla and to a certain extent, Yelp and Twitter, who are trying to duplicate similar location-based features. Ben Horowitz, of Andreessen Horowitz venture capital firm, blogged about why Andreessen Horowitz invested in Foursquare, citing three main reasons:
“A great founder/CEO: Dennis Crowley” – Crowley is the founder and originator of the idea. “We think the keeper of the product vision should run the company…because the toughest and most important decisions in technology companies are always about product strategy,” says Horowitz.
“A killer product” – Horowitz cites Foursquare’s explosive growth (currently over 2 million users) in a little over one year’s time and attributes it to the check-in’s and the product’s easy-to-understand features. “Dennis and team have identified over a dozen different dimensions of the Foursquare product that must interact with each other in precisely optimal ways to achieve user delight. Years and years of sweat equity went into cracking the code and the results are magical.”
“A gigantic market” – Horowitz believes that Foursquare will capture a “huge portion” of the 200 million people worldwide who have smartphones. In addition, Foursquare will “make money in a way where all parties win: users, merchants, venue owners, brand advertisers and more.”
Andreessen Horowitz’s $20 million investment brought Foursquare’s valuation to $95 million. With big advertisers like The Wall Street Journal, The New York Times, Mtv, VH1 and others, Foursquare’s founder and investors are likely to continue innovating the market with more features to keep building the number of users and venues and to keep people from getting bored and dropping out. The advertisers benefit from exposure and (are privy to the data Foursquare collects from its users shopping habits.)
It will be interesting to see what Foursquare does with its $20 million investment, besides building its cool new digs and adding on to its creative team. Hopefully, the Foursquare team will continue to add on more delightfully fun features and incentives for all of us, from the user to the venue owner to the big brand advertiser. I’d like to see Foursquare reward the most active users with hidden jackpots, sort of like the venue itself is a slot machine and the more money I, the user, spend at the venue, checking in to Foursquare each time, of course, the more chances I have of winning a big jackpot of money or products.
So far, over 10,000 businesses are participating in Foursquare as of July, 2010. When that number grows to one million, will Foursquare be just as much fun or too competitive? Will it become even more useful to consumers who want to save money in a tight economy? Will the coveted Swarm Badge number have to be raised to 1000 instead of 50? So much to consider….I’ll leave all of this mind-bending to the creative team at Foursquare.
I do know this: when I’m about to plunk down some cash at a restaurant, hotel or other venue, I’d much rather consult tips about those places, written by people who have personally experienced those venues, rather than rely on any other type of information or advertisement. Foursquare and its investors are betting that you will, too. Will you? Please share your comments.