Just three years after Foursquare launched its location based app at SXSW, the company has more than 20 million users and 750,000 merchants.
Now Foursquare is in a phase of transforming into a company with a profitable product. The recent departure of co-founder Naveen Selvaduri indicates internal shifts are already occurring.
John Valentine, VP of Sales for LevelUp, said that the company’s new strategy is in local search and discovery—which is similar to Yelp’s business model. For the company to thrive it needs to supplant Yelp as a local search-and-find app. “Foursquare would be an interesting acquisition target for Yelp,” Valentine told Street Fight.
In order to make money, Foursquare will need revenue from merchants—in some combination of advertising or service fees. David Chang, COO of WHERE, told Street Fight, “The question is if their sweet spot will be little merchants or big media brands like Bravo who want to reach their audience.”
While the gaming aspect was crucial in the company’s early development, now it’s moving into the loyalty and rewards space. Tristan Walker, director of business development, told Street Fight that the company is focusing on building ways for merchants to measure the effectiveness of the deals offered on the platform.
Foursquare is also adding new layers of data. It’s teaming up with menu aggregator SinglePlatform to include SKU level menu information to its venue pages. At this year’s SXSW, Crowley told audiences that people are using Foursquare just for the data, and not checking in. “That’s a really important and interesting trend,” he said.
Valentine told Street Fight that if people stop checking in, it would hurt the company down the road, saying, “If people don’t check-in anymore, they won’t have up-to-date records on where their friends are because they aren’t checking in either.”