Foursquare's Dennis Crowley on Failed Pitches, Acqhires & Strategy
If Dennis Crowley wasn't the CEO of Foursquare, he'd probably be a snowboarding instructor. At least, that's what he told a small crowd at the PandoMonthly event held last night in New York City. More factoids: He also turned down multiple acquisition offers for his location-based service and once used a 160-slide pitch deck to woo venture capitalists in Silicon Valley.
Check out these five takeaways from the two-hour chat with the moppy-haired poster boy of the New York City start-up scene:
Crowley’s first go-around at pitching VCs was pretty terrible.
While Foursquare has raised $71 million in venture capital, Crowley said his first pitch to venture investors was a learning experience. “We arrived at the San Francisco airport and took a cab straight to Sand Hill Road,” Crowley said. “We had no idea what we were doing.” Using a detailed 160-slide pitch deck, Crowley said it look about 35 tries before he got it right. Ironically enough, Crowley is now on the receiving side of pitches as an angel investor.
Google’s acquisition of Dodgeball didn’t go as expected.
For young start-ups considering an “acqhire,” Crowley emphasized that it’s important for both companies to be on the same page. According to Crowley, the vision for product development and strategy of a newly acquired company can differ significantly (case in point: Google shut down Crowley’s first company, Dodgeball, in 2009 after acquiring the start-up in 2005). “In hindsight, we thought it was a product acquisition and they knew it was an acqhire,” he said.
Foursquare’s approach to dormant users is the same as Twitter’s.
Speaking in San Francisco last night at the OpenCoSF conference, Twitter CEO Dick Costolo said that the biggest misconception about the microblogging service is “that you have to tweet to use Twitter.” Crowley emphasized a similar point. Foursquare now has enough data and content for users to benefit from the app without “checking in.” He added that the company currently has 12 data scientists sifting for trends from more than 2.5 billion check-ins. “The stuff we’re doing now is nasty,” Crowley said.
Tech is not cool in New York, and that’s a good thing for NY-based start-ups.
In Silicon Valley, the tech scene can sometimes feel overwhelming for budding entrepreneurs. But in New York, “Tech is like the fifth coolest thing behind finance, fashion, media, and music,” Crowley said. As consumers, the New York audience resembles “muggles,” because they aren’t always the first to test out a new app or web service. “I always like to talk about ideas and pitch things to people that aren’t in the scene,” Crowley said.
Foursquare wants to monetize each user differently.
“Someone has to be the test case,” Crowley said. “You can build a big business making a lot of money off each user, not just amassing more users and showing dumb banner ads.” Foursquare currently has 25 paying customers in a trial run, and more than 1 million merchants who have claimed their spot on the app. But Crowley added that specific plans are still in the works. “The point now is not for us to be generating a ton of revenue,” he said. “It’s to learn…how the users are responding to the experiment of the promotions.”