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A (Modest) Defense of Foursquare

One of Silicon Alley's staples is in the media doghouse. Here's what we shouldn't forget about the check-in pioneer as it grows up.
Foursquare's Dennis Crowley
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Foursquare is four years old. It's no dinosaur, but as a village elder of New York's tech start-up scene, it's been the subject of plenty of scrutiny lately--well, pretty much ever since it took $41 million in debt financing this spring.

Alyson Shontell at Business Insider wrote Wednesday that morale is low at Foursquare and that employees are looking for other options, based on interviews with unnamed sources "both in and around the company." The piece points to the $1.1 billion sale of Tumblr--Silicon Alley's other grown-up-ish Silicon Alley social-media start-up--as one point of envy for Foursquare employees. Another factor these sources claim is engendering discontent is founder Dennis Crowley's attempt to achieve work-life balance by getting away from the office and then posting about his out-of-office adventures. (Sample tweet: "Standing in a line 50 people deep for a $5 strawberry lemonade at the Beacon Strawberry Festival.") This led AdAge to pose the question: Should Foursquare's founder help company morale by using Foursquare less? 

What the piece didn't address is the fact that Foursquare isn't really a scrappy start-up any longer. No, it's not making back a significant chunk of its massive $71 million total investment, but it is starting to make money. And with more than 160 employees, who have been through many modifications of the business plan, it's natural that the company culture might be losing a little of that electricity that makes working at a start-up exhilarating.

Taking the cash infusion this April certainly raised eyebrows. But maybe it's helpful here to look back to earlier in the year.

The mayor of the check-in hit the tech conference speaking circuit hard earlier this year, largely to explain that, well, check-ins and mayorships don't matter as much as they used to for the core business of Foursquare. He was interviewed on the South by Southwest main stage, at the exclusive f.ounders in Manhattan, and at TechCrunch's Disrupt NYC. He described the company's new direction--and its new ability to make money.

Foursquare today is a data company, with a sophisticated, in-demand mapping infrastructure. That API is used by some 40,000 companies, including Airbnb, Path, Twitter, and WhatsApp. Foursquare is also a new breed of marketing company--and it might have the ability to make money there as well.

Crowley says Foursquare has signed six-figure deals with national merchants, ostensibly with the goal of pointing Foursquare users (about whom it has lots and lots of information) directly to them."We launched our first revenue-generating products in the second half of last year," Crowley said. "We're slowly scaling them up. We're focusing on national advertisers and brands."

As for skeptics who still question the greater value of the "check-in," Crowley had this to say:

It's like Twitter back in the day, when people kind of wrote it off as a bunch of nerds tweeting about what they had for lunch. Well that's actually a lot of data. And as people start to tweet about different things, and you start to get billions of tweets, you can start to make a lot of magic out of that. We are in that same transition phase right now.

And he said if you need validation of Foursquare's data-collection prowess, just look to the other big social-mobile players: "Everyone is trying to copy what Foursquare has done. Yelp added check-ins, Facebook added check-ins, Google has it now. And we are still the company that does this."

Foursquare is primed not only to be able to use its massive amount of data to serve advertisers, but also to be users' eyes and ears in cities they live in and cities they visit. "How do you see around corners and through walls, and how do you do it with software?" he asked at the f.ounders conference in New York, positing that this is part of the future of Foursquare. He likened that ability to predict where a user will go to a superpower. And building that out seems to be the company's main goal for now.

It will certainly be interesting to see where Foursquare takes its new technological superpower--whether or not a few employees flee to the next hot start-up the meantime.

Last updated: Jul 12, 2013

CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer

Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.




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