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Many ask themselves what happened to Foursquare? Well, the company still survives, and all thanks to our data.
We all did it, at least once: we checked in on Foursquare. But then, it all faded away, right? The once-popular social network vanished. Well, that's what you think. Chances are you're still using Foursquare, even if you don't know it.
Wait, let me correct that. Chances are Foursquare is using you. So yes, it still exists, just not how you think. Foursquare is a clear example of how evolution can lead to plenty of opportunities if done right. By the way, having the data of millions of users also helps.
This article explains what happened to Foursquare, from its origins, its rise in popularity, and its downfall. But, we'll also explain how the company managed to reinvent itself.
Foursquare was born in 2009 as Foursquare City Guide. Dennis Crowley and Naveen Selvadurai wanted to compete with Twitter. But their idea came with a twist: the added benefit of knowing where your friends were.
Here's a summary of the initial idea. Through an app or mobile browser, you could register your location. Foursquare would then let your friends know so that they could find you.
It wasn't only about checking in. The app allowed users to check in on specific locations automatically. Also, you could post statuses, called Shouts. With these, you told your friends where you were and what you were doing.
Then, there were the badges. These were a big thing back in the early 2010s, and, in Foursquare's case, they only fueled the addiction.
If you look at the idea from far, it might seem boring. To some, it might not even feel safe. But, back then, it wasn't only about knowing where your friends were. Foursquare allowed users to explore new venues, restaurants, bars, and cafés. But, it didn't restrict to that. You could sync your account with Twitter and post updates there, even automatically, on some locations.
All these features had two primary goals. First, create a vast social network. But, also, create mini networks around your favorite cafés, bars, and restaurants. This would be a win-win. Your friends were up to date on what you were doing, plus the venues got a boost from the visits.
It could also lead to potential kidnaps, but that's not part of the sales pitch.
Anyway, the idea caught on, and Foursquare was on its way to becoming a worthy Facebook adversary. Or, at least, that's what people thought.
In no time, Foursquare was the new kid on the block, challenging the big names. Businesses all around were putting up the Foursquare handle next to Facebook and Twitter.
In no time, everyone was into it. From minor celebrities to big names, the world embraced Foursquare. Then, Pauly D. (Yes, remember him?) created a celebrity mode, which allowed fans to track him and others.
Wait, Jersey Shore had fans? Those were strange times.
Then there was Doug Wheelock. The name might not ring a bell, but he was an astronaut who checked in on Foursquare from the International Space Station. When he did so, he unlocked the NASA Explorer badge. Some users complained and, when Wheelock landed, Nasa created a special website for others to use it. That's how important the badges were.
Barack Obama checked in on a town hall meeting. But wait, wasn't that a security violation?
Anyways, as you can see, it was popular. People loved it, and businesses got involved by creating badges for users. So, for example, you might visit an ice cream shop and unlock a badge, then end up with a free cone. Or pizza, or even a book.
Within a year, Foursquare had millions of users. With such popularity, many considered that it could even reach the famed Unicorn status.
There was plenty of interest from competitors. Yahoo was the first to offer up big bucks for Foursquare. At its peak in 2010, Foursquare was tempting enough for Yahoo to offer $100 to $120 million.
Seeing this, Facebook stepped in, offering $120 million. But Crowley got greedy and asked for $150 million instead. So Facebook walked away, and the talks with Yahoo died down.
Well, it might seem like Crowley got greedy. But he has said that he was looking for the best way to go about this new idea. It's important to highlight that his past project, Dodgeball, ended up under Google for a fair amount, but the giant let it die.
Though the app was popular, the numbers weren't helping Foursquare. The company had only raised $1.35 million, which had some cautious of investing money on it.
And from their perspective, it's good that they didn't. But, as with many fads, it began to die down. There are many factors that we can attribute to the downfall.
First of all, the competition was tough. Sure, Foursquare had millions of users. But nowhere near Facebook, the dominating social media and the alleged rival.
Then, newer, sexier stuff came out. There was Instagram; Twitter was revamping itself and, checking into places just wasn't that cool anymore. Even Snapchat became a powerhouse. Why check in when you could post perfect pictures or funny videos?
After the two major acquisitions fell through, Crowley needed cash. It was hard, but he managed to gain some funding. He raised $20 million from Andreessen Horowitz, which felt at the right time.
You see, Foursquare wasn't only facing external competition. But internally, the lack of funds meant there was no chance to develop the software further. However, with the newfound money, Crowley could move away from the growth stage, which had eaten away at the company's finances.
Then he raised another $50 million, which sent the company valuation to around $550 million. But once he got these two financing rounds, investors were wary of dishing any more money. Foursquare was yet to show a worthy financial model.
2012 didn't help. The startup only managed to generate $2 million, well below any investment expectations. So, investors were pressuring Crowley, and the world noticed.
Business Insider even said, in 2013, that it would be the year of Foursquare's death. And, if it did happen, it wouldn't come as a surprise.
But, what if there was something the world couldn't see? Because Crowley was conjuring up a significant shift.
All those check-ins, all those venues, locations, what is that? Data. Pure, unadulterated data. It's very, very valuable. But Foursquare had to find a way to use it. In locations alone, Foursquare had registered 85 million places.
Such was their power that those same businesses asked Foursquare to help them.
That was their pot of gold. So, in 2014, it would no longer be about friends; it would be about helping businesses, advertisers, brands, and developers. Of course, the company had plenty of data to start with.
Before you raise your fist in the air: that's what the fine print is for. In the end, people were voluntarily putting in their data.
Plus, Foursquare had worked hard on its location technology. So, it was time to ditch the idea of competing against Facebook. Instead, they started charging developers to use their technology on third-party apps. But the challenge was making it work.
To fulfill this change in identity, Foursquare split its products and released Swarm. This new app was loyal to check-ins and included perks that seem old now. For example, you could become a venue's major after many visits, plus close friend networks.
Then Foursquare became Foursquare City Guide, a direct competitor to Yelp. Users could review different venues and check in to let others know what they thought.
The revamped Foursquare had Crowley confident about the future. He told Fast Company that, first of all, they knew that check-ins weren't a thing anymore, at least not as important. Second, with the split, now the company could focus on improving both apps.
It's important to note that, before the split, Foursquare was trending downwards in the download department of the app stores. So, the company hoped to turn things around and, for a second, it seemed Crowley was right.
Downloads increased, and there was much hype around the new launch for both. Swarm, for example, managed to rank in the top ten during August of 2014.
But hype soon died down. By September, it had dropped below the #1000 app in iOS and similarly in Android.
Foursquare was no different. Following a boost after the announcement, it dropped well below the #1250 on the iOS store. And on the Android store as the hype did little to recover the downward trend.
So, judging by the numbers, it seemed like Foursquare, and Swarm's end was near. So, would they survive?
After the disappointing results, it was time for another big change. Crowley might have seen delusional to some at the time, but he had made it clear that he didn't care about check-ins anymore. Popularity wasn't Foursquare's game anymore.
For years, the company had optimized its data, tools, and technology. So, the income would come from licensing all that hard work. The only thing is, doing so wasn't easy.
Along with the change in perspective came interesting changes in command. Crowley stepped down as CEO in 2016, and in came the company's COO, Jeff Glueck, to inject new energy into the company.
It seemed that Foursquare had all but disappeared for all of us unless you were a fan of reviewing and visiting places. Meanwhile, Swarm trudged along in mediocrity. In fact, in 2017, even Crowley admitted that he didn't use it as much as a social network.
Yet, he insisted the value behind Swarm wasn't social networks; it was about logging your life. You could register up to 100 places that helped defeat the ephemeral nature of experiences in social networks. And also, create more data.
But Crowley still had one ace up its sleeve: Pilgrim.
Pilgrim is a Software Development Kit that senses whether a phone was moving in and out of a venue. Now, this sounds a lot like Foursquare, but here's the catch. Users didn't need to press a check-in button.
And yes, if this sounds intrusive, it is because, to a degree, it is. But that's where the fine print again comes in. By using Foursquare, you agreed to share this data. Plus, Pilgrim was now available to other companies.
The software was enticing for many different sectors. After all, it could predict trends, show hotspots, and how users behaved. Plus, at the end of it all, there was a benefit about working with Foursquare.
Foursquare didn't have any links with companies such as Facebook and Google. This made it more attractive. By 2018, Foursquare's data had three billion hits.
And that's not the most impressive stat of all. At the time, 25 million people worldwide had chosen to have always-on data tracking. The numbers kept growing. By 2019, 150,000 developers had used their technology. That's a good chunk of change.
That same year, Foursquare merged with data provider Factual and data company Placed. So finally, after five years, Foursquare had transitioned from a shaky social network to a solid business model.
About Swarm, yes, it still exists. But so do people who sell ink ribbons for typewriters. It's a niche product for a niche activity: lifelogging. But, while we focused on how Foursquare had failed as a social network, it managed to reinvent itself.
Foursquare's data and software now help power apps by Microsoft, Samsung, Twitter, and Uber. In Q4 2020, the company had its first profitable quarter, and 2019 showed revenue of more than $150 million.
There's no better to end this, right? It took him years to evolve Foursquare into something new, something that worked.
And, yes, all thanks to you and me, and the millions of users. So, in the end, you're still using Foursquare. So, it was a social network all along. Just not how we envisioned it.
