We can agree that Foursquare entered the market with the perfect timing hitting all the raising trends at the moment: smartphone penetration, social networks, location-based services and video games. It was the nerdy kid of the class that did all the homework right. No wonder as for April 2012, the three year old start up registered 20 million users, 2 billion check-ins and has trippled its revenues from around $5M in 2011 to $15M up to March 2012.
But not everything is sunny and shiny for Foursquare, despite of this excellent numbers and the increase of awareness there are some questions about the real usage of the app (Is people still checking-in?) and its monetization (How and what is going to be charged?).
Personally I started using Foursquare to discover new places around me, explore promotions and coupons and to actually share my location with my friends and family. One thing I noticed was that after one or two months of usage, I stopped checking-in into places because I didn’t like to open the app everytime I arrived to place. So my usage has decrease but I still check it out some times to see where my friends are and to find new places. Of course I thought that was my personal experience but it seems that is not just me. According to Foursquare’s CEO, Dennis Crowley “People are using the app, but they’re not checking in (…). I asked myself: did we break something? But in fact, it’s because people are using Foursquare to look for where their friends are, to find things, and as a recommendation service. It’s almost like it doesn’t occur to them to check in”, stated in TechCrunch. The question is how are they going to handle this? Maybe we will see some features that will allow users to automatically “chek-in” that would increase this activity. In addition to this, security issues need to be handled propertly in order to penetrate emerging markets such as Latam, Middle East and India where this is a high concern.
Foursquare’s business division has different offers for place owners (resturants, bars, hotels, etc) and brands. As a place owner you can claim your place, create promotions and acces to analytics. As a brand you can publish offers and access to analytics. Up to now, Foursquare has up to 750,000 merchants registered in the platform but none of them has been charged yet, they have been using the app for free which is a great way to penetrate the market but the question is if they will be willing to pay for additional features when how to measure the ROI is still not that clear.
Facing emerging and strong competitors (Gowalla – recently acquired by Facebook, SCVNGR, Shopkick, etc) in order to leverage from its platform and continue growing, Foursquare need to develop new features to motivate its user activity and add extra features that would create value for merchants and brands.