There’s some hoopla today that the location-based social network Foursquare has found its business model (and as such, has beaten the more mature Twitter to one). But hold your horses. While Foursquare does have an idea for how to eventually make money (as we’ve discussed in the past), they aren’t actually focusing on making any just yet, co-founder Dennis Crowley confirmed to us today.
While there is a Foursquare For Business section on the site now, there is no monetization plan for any of these deals yet. “[We're] really just focusing on getting the product working properly (crashes / UX etc). [It's] worth noting that we don’t want to shoehorn biz stuff in at the last min, which is why we’re trying to get local merchants involved now. Even if all the deals are freebees,” Crowley wrote to us in an email.
That being said, obviously, Foursquare eventually hopes these types of deals (dubbed “Mayor Deals”) become a business of some kind. But having just raised its first seed round of funding, and only having been in existence for a few months, Foursquare has some time. And it seems smart to do this type of stuff the right way, rather than just “shoehorning” it in, as Crowley put it.
Crowley also says that they’ve been adding a good number of these specials recently. And they finally have a tool that makes it easy to do so. So we should be seeing more such deals in the future both on the mobile apps, and the website. You can see the current list of deals on the right hand column of this page. As you can see, most are in California or New York, which is where the service is most popular right now.
When Foursquare does decide to attempt to monetize such deals, it’s unlikely to be quite as straightforward as simply flipping a switch and accepting money to show coupons. For example, if there are tangible incentives to be a mayor of an establishment, this is likely to encourage cheating. Foursquare has been working on ways to combat that, but depending on how good the deals are (a free beer sounds pretty good to me), it will undoubtedly be a challenge.
There’s also the issue of price. How much do you charge a business to show these deals? Certainly it’s in the a local businesses interest to have these types of deals as it will probably drive more traffic to their establishments, but Foursquare would also already be getting a bump from the fact that the deals also entice users to use Foursquare.
Such deals would likely have to happen on a massive scale for Foursquare to make significant money. And if/how quickly that happens will be a testament to the power of local and location services overall.
Ya know. all of the haters called us FourSquare users TOTAL LOSERS for checking in everywhere but who’s laughing now? (don’t answer that)
http://foursqua...ser/adamjackson
“You are currently the mayor of 32 places!”
That’s right! All of my favorite bars and cafes. Bring on the freaking coupons!
Adam J. hasn’t added any tips for NYC yet. Lame!
Haha. I am a tips guy for sure! I’ve completed like 272 tips so far.
I haven’t been to NYC since I was 14 years old though. I really haven’t had a reason to visit there. Sorry Amit.
FourSquare has raised it’s profile recently as I have seen an increase in coverage. Checked the iPhone app and it’s still not available here in London!
Well, if not in london you can try weegoh
.
Also you can add your business and special offers on the site.
Cheers.
Considering foursquare is barely six months old, I think things are progressing just fine. Everything good is worth the wait, and I have high hopes for where they’ll end up when all is said and done…
- Mayor (37x) Tom
Heck yeah, I love Bareback Grill
This makes sense to me. If I were those guys (and with their great product, buzz and investors I’ll enjoy the hypothesis) I would focus on getting huge quick. I can’t see checking into more than one app every time I get a beer (unless it’s automated…) and since I enjoy being the mayor of a few spots, FS has my loyalty for now. If my friends end up on different platforms though FS may have to find another way to keep the switching costs high enough to keep me – best thing they can do is to keep that from happening and get my social graph on board ASAP.
On the other side of the transaction, I’d suspect that getting huge is also key as I don’t know that the merchants would welcome that many entrants either. Would OpenTable work if there was a close #2 splitting the market? Is there room for a layer between the merchants and FourSquare? Again, probably best not to find out.
Just saw the first “mayor deal” pop up on the iphone app today. Here’s hoping they come up with an ‘ignore’ button – right now it shows up anytime you check in anywhere nearby, with no way to tell whether it’s a deal you’ve seen before or not.
Ya know, that’s one thing I don’t like. “nearby deals” When I check in at Blue Bottle in SF it tells me there’s a nearby deal for mayors of that place.
It’s a bit annoying
Foursquare can be really irritating on the iPhone, I agree. Still, i’m pretty amazed by how easy the experience is, and how addicting it is to use.
Still don’t get the hype about this app. It seems the social media blogosphere is hell bent on making this thing bigger than twitter. I tried using it but found it rather lame(not to mention it crashed half the time). I guess a certain crowd can find it interesting. I don’t think FourSquare will go beyond the early adopter crowd though.
I’m super bullish on foursquare even though I’ve only just started using it since the android app came out. The service is awesome and here is why I am so excited about it:
Its fun…using positive reenforcemant to encourage adoption(badges are like gold stars from kindergarten) pure brilliance.
Its a fun way to passively keep track of friends
Its addicting
It encourages offline interaction
Its mobile
From a business perspective it benefits both the user (deals) and the business owner (increased traffic/revenue)
Its a goldmine of marketing data
Huge potential for POS action based advertising
Clearly it has already gotten key influencers
Now the problems that I see them having to overcome:
They need a way to actually track revenue generated if they want ppa vs display based revenue – qr codes maybe, a private label credit card? A player card? E wallet
They need to make entering data easier- half the time I skip checking in cause I am to lazy to enter the address- a long press key combo that grabs geo data would be awesome and increase adoption.
Yelp, latitude and facebook/twitter should be working on similiar features, the last easter egg in yelps show them going a similar yet slightly different tack – are the barriers to entry significant enough (ip, development etc)
Can they do all this without seeming to sell out their users? I think its a classic win-win, but some people hate advertising with a passion for no good reason.
This service is fun, it encourages interaction both online and off, it has an addicting game play element that rewards users both physically(coupons) and emotionally (badges) for doing things they already do and discovering new things….what’s not to love?
Foursquare is like the elementary school teacher you always loved cause they taught you all the cool stuff but never scolded you for acting like a jackass.
Haha. I am a tips guy for sure! I’ve completed like 272 tips so far.