In its heyday, Foursquare was a leading social media company that had the novel idea of using geo-location data as the basis of its network. But as other social networks such as Facebook, Twitter and Instagram started including check-ins in their products, it became harder for Foursquare to stand out from the pack. Its star has been falling steadily for the past few years, and now it's making more drastic changes.
Last week, the firm announced it had appointed a new chief executive, Jeff Glueck, formerly the company's chief operating officer. He replaces co-founder Dennis Crowley, who will become executive chairman. The company also said it had raised a $US45 million round of funding. Recode reported that it gives the company a valuation of $250 million — about half of its previous funding round.
Those are hard headlines to deal with, but things may not be as bad as they seem. Foursquare, after all, had been expected to meet its final end many times before. Three years ago, analysts at PrivCo proclaimed that the firm would fail by the end of 2013. But it has more than 50 million monthly users and has logged more than 8 billion check-ins, according to its website.
Foursquare also has in its favour a large bank of data from users who have checked into locations using its network since it was founded in 2009.
"They do have a ton of data, and they are clearly focused on monetising that data," said Jay Wilson, a social marketing analyst at Gartner. "The challenge they're facing is how they keep users engaged with the app so that the data keeps coming in."
In some ways, the staffing moves extend what the company already has been doing. In 2014, the firm made the risky choice to split its service into two. Foursquare became more of a Yelp competitor, featuring reviews of places where people had checked in. The other side of the company, Swarm, took on the traditional check-in and social features. The split wasn't completely smooth. Many longtime users felt alienated by the changes. But the emphasis on reviews was seen by analysts as a smart way to make Foursquare's data more valuable to brands and companies.
Wilson said that Foursquare has had some success in marketing this data to small and local businesses but hasn't done as well with mid-sized and large ones. Having Glueck — a former chief marketing officer — at the helm could help the firm, Wilson said. At least it shows Foursquare is more serious about courting the business market and finding ways to differentiate itself from the pack. He also noted that another staffing decision — to make Chief Revenue Officer Steven Rosenblatt the president — sends a similar message.
If it can survive, Foursquare might escape "cautionary tale" status and could become a good template for companies on how to keep moving once all the hype has cooled down.
The Washington Post