Does Foursquare Have the Juice to Get Huge?

Last week's announcement by Facebook that they were dropping their "Foursquare-Killing" Places service brought cheers from their pure-play check-in competitors. With their biggest threat out of the way, does Foursquare have the plan, the momentum, and most importantly the juice to make it to the big time?

Foursquare

When Facebook launched Places just over a year ago, many wondered if sites like Foursquare and Gowalla would survive. At the time, Facebook had nearly 100X as many users as their two largest check-in competitors combined.

If Foursquare was scared back then, CEO Dennis Crowley didn't show it.

"It gets fun when you build on top of the check-in," said Crowley. "Our magic is in the tips, to-dos, badges, games, and mayors. Foursquare has a definition, a definitive personality and culture, that drives our growth."

A year later, his lack of concern seems to have been warranted with Facebook bowing out of the check-in battle. With one threat down, what will it take for the service to reach its (and its investors') goal of sustained growth and eventual profitability?

Foursquare Projected Growth

First and foremost, they must expand their user base at a faster rate. With $72 million in funding, they have a window of revenue nascency during which time they can play with different options, test the waters, and formulate the actual business plan.

The window is small. At just over 2.5-years-old the company will be expected to demonstrate profitability in the next 12-18 months. Trends are on their side. A report this week by secondary market Sharespost estimates that location-based ad spends will explode over the next 4 years, jumping from approximately $40 million in 2010 to $1.8 billion by 2015 due to an increase in dependency on smartphones and other mobile devices in day-to-day use.

It isn't simply a matter of grow and sell ads. Even with Facebook gone, they still face a gigantic competitor emerging in the form of Google+. The sheer bulk of the company combined with its strengths in selling advertising makes them a bigger threat than Facebook ever was.

To succeed, Foursquare will have to innovate their game while simultaneously creating better ways for businesses and their Foursquare pages to interact with consumers. Checking-in and earning badges is fun for many, but it simply isn't enough to appeal to the masses. They'll need to improve incentives and get businesses to find value in offering specials on Foursquare.

Currently, it's a pleasant surprise when a business has a check-in special, but even when they do many of them are not strong enough to be spreadable. A free desert for checking in at a restaurant is a nice bonus, but it's not enough to make people come back specifically because of Foursquare and it's definitely not enough to get people to share their find with their social media friends.

Check-in deals need to help bring people in, help bring them back, and be worthy of sharing with their friends and family in order to reach mass appeal. If people find out from their friends that they're truly missing out by not taking advantage of Foursquare, the service can grow faster than estimates both in user base and potential revenue.

Today, that isn't happening regularly enough. For it to happen, Foursquare must exceed projections in growth. To exceed projections in growth, they'll need juice.

The Juice

At the end of the day, the element that will separate Foursquare from its competitors and make the company's value hit 10-digits will be advances in their games. Earning badges and competing with friends is limited in its potential. The service needs to be more fun.

Here, they'll need to go the same route that Facebook went. They need more apps. They need better apps. They need app developers to tap into the Foursquare API and build wonderful things.

That's the juice.

Over a year ago, there was a report that someone was working on a Monopoly App for Foursquare. It's that sort of thinking that will push Foursquare into the mainstream. They need the Farmvillesque jolt of addicting and sharable gaming that will get people to tell their friends and family, "You've got to try this. It's easy and it's fun."

Foursquaropoly is still in development. If it flies, it's along the lines of the type of app that could do the trick for Foursquare.


Whether it's Monopoly or any of the other thousands of possible apps that can be developed, something must emerge in the next year that can make Foursquare mainstream. All they need is a little juice.

[Image: Flickr user Team Sticker Giant]

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1 Comments

  • Dave Dude

    "Does Foursquare Have the Juice to Get Huge?"
    No, I don't think so. There's little incentive to check-in. Sure, there's a few good deals out there, but not enough for people to want to check-in daily.

    Even if a 3rd party app gets really popular, it still won't push foursquare to critical mass. Foursquare has good data I'm sure, so they'd probably be useful in a buyout from Facebook.