How does Foursquare make money?
Location based social network or a location intelligence company?
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This is Edition #13 of the newsletter. You can find the previous editions here.
Foursquare
Foursquare launched as a social network for sharing locations (lifeblogging through check-ins). Its consumer app let users share their live locations and earn badges (as well as mayorship) by checking-in into restaurants, museums, laundromats, retail outlets etc. Foursquare also included a City Guide that had reviews about local attractions based on its users’ check-ins. By 2014, many services like Instagram, Facebook, Twitter etc. started supporting check-ins as a feature and the consumer app from Foursquare started losing users. Read further to find out how they still survived!
Stats
🐣2009 Founded (launched at SXSW)
👩💻14 billion user-confirmed visits and 9 billion place visits measured a month
🗺105M places database
💸$390.4M Raised
💰$100M+ Revenue (2019)
Pivot from consumer to enterprise
In 2014, Foursquare split its main app into two separate apps, the Foursquare City Guide and Swarm.
Swarm let users check in to locations and earn mayorships and other stickers
Foursquare City Guide, on the other hand, used past check-in data and data from Swarm to power a Yelp competitor, giving users a way to find great restaurants and experiences in their area.
With this treasure of location data and thousands of developers already using Foursquare APIs to power their apps, the Foursquare team pivoted their business and started charging the developers. Here are some examples of Foursquare API usage:
Uber - places you chose as a destination are powered by the Foursquare API
Airbnb - details, pictures & reviews of local attractions in guidebooks are powered by Foursquare Places API
Samsung - using Foursquare’s database of more than 105M places, Samsung allows its users to geotag their pictures with detailed info about a location.
Snapchat - Location-based geo-filters and context cards are powered by Foursquare API
Mastercard - Mastercard used Foursquare data to serve advertisements to users and drive foot-traffic to participating stores for increasing usage of Samsung Pay
Spotify - Foursquare location data helps Spotify prove the value of Spotify ads to its clients by attributing increasing store footfall to an advertisement.
Apple Maps - Apple uses Foursquare API in many countries to improve the maps recommendations of business listings.
WeChat - WeChat uses Foursquare API to enable location sharing for easier meet-ups
How does Foursquare make money?
Foursquare is now positioning itself as a location intelligence company. With data from millions of users and billions of check-ins, Foursquare has developed technologies to locate a mobile phone to the closest location. It now licenses this technology through APIs and managed services. Here are the products that Foursquare sells to enterprises:
Developer Solutions
Places by Foursquare
The database of 105M+ places served by Foursquare API along with a lot of venue metadata including pictures, reviews, footfall etc.
Eg: Uber, Airbnb, Apple Maps using Places to power their location discovery services.Pilgrim SDK by Foursquare
Helping developers map the “current location” of a user. The Pilgrim technology, according to Foursquare, is more accurate than your average location tech because of its 10 years of check-in data. The tech understands the difference between a fifth-story location and a ground-floor location. It knows the difference between the coffee shop and the bar next door in a densely packed city like New York.
Media & Measurement Solutions
Pinpoint by Foursquare
A digital advertising system that helps brands target consumers based on where they actually go.
Eg: Mastercard’s usage to show notifications to target users near vendors accepting Samsung Pay (powered by Mastercard)Placed powered by Foursquare (Attribution)
Foursquare has a panel of 10M+ US consumers who have “always-on location sharing” enabled on their phones. Through this “panel”, Foursquare helps quantify campaign effectiveness.
Interestingly, Placed was a startup that was first acquired by Snap (2017) and then by Foursquare from Snap (2019)
Eg: Spotify’s usage of Placed to measure the increase in footfall after advertisements
In the words of its founder Dennis Crowley,
“We are trying to be the best in the world about how phones move around”
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