Is Foursquare the Mayor of Hype Bubble Central?

A little while back there was a bit of a heated debate in the ole twittosphere. You see foursquare, it would seem, is one of those things that’s a bit like marmite – and I’m not exactly in the “love it” camp. I personally find it annoying. Well not it of course, it's just a platform. It's just the way people use it to constantly announce where they are having a meeting, cup of tea or stopping for a poo - and that pollutes my personal online space. Now of course I hear shouts of “get a life” – and you’re absolutely right. I also know where the “unfollow” button is & I’m certainly not afraid to use it (I prefer to try and skew my tweet stream towards quality rather than quantity), but it’s the bubble of hype that surrounds foursquare that annoys me more than anything. It’s like no one has learned anything over the past 10+ years.

So I wanted to put my money where my virtual mouth was. With people shouting (in their professional capacity) that it will be “massive” I wanted to get this into the public sphere (well – the blogsphere at least). But my first challenge is “what does success look like?” I asked across my twitter network, but no one could give me anything solid. So now I’m trying here too. I’m looking for information about what level of usership a consensus of people would agree would signify “massive” and ideally sustainable business success. In the Social Media space we’ve recently seen Bebo go down (a business bought 2 years ago at $850m with 40m users (here’s the Guardian raving about it), declining to a user base of c.12m and sale 2months ago for a reported $10m) – and we all know of other similar massively hyped big ticket failures. And if you’ve had anything to do with digital media then you, like I, will have had to sit through presentations where people tell you why each of those are going to be “massive”.

There are, I’m glad to say, people far more clued up than me writing about why Foursquare is fundamentally limited, but I think that even in this day and age early adopters can’t help themselves getting caught up in thinking “cool” and fast initial take up is anything other than just that – initial and with the potential to quickly become un-cool. Unfortunately the analogy that comes to mind is of a teenage boy when he gets his first computer and unfettered internet access set up in his bedroom beyond his parents prying eyes – let’s say he’s prone to getting a little “over excited”, then quickly losing interest until something else catches his interest and we’re off again.

Now I feel I should also be clear (I can already feel the SoMe playground bristling) and say that I’m sure geo-locational services will become massive, but almost certainly only when a google or a facebook enables it to a seamless part of their offer (TechRadar article on Facebook geolocational moves & The Next Web article on Google Lattitude), because as users we are intrinsically lazy, so (I suggest) we’ll use a product maybe only 70-80% as good as another if it requires 10% less effort to use it. 

Foursquare tapped into the “inner teenager” within many of the early adopters and deserves kudos for seeing just how to inflate a hype bubble so effectively – but the “mayor” thing is surely little more than this years must have boyz toy, consigned to the back of the cupboard by spring and in a charity box by the autumn. My wife has made me aware of an iPhone app called AroundMe – a perfectly good and really simple to use geolocal listing engine (or whatever the correct terminology for it is). It even seems to have a very nifty augmented reality facility (although I’ve barely used it to date and so couldn’t tell you how good that is). I don’t have a profile on it. I don’t want to share with anyone where I’m having a coffee (because I know they couldn't give a toss). But it is a nice and helpful facility. 

Anyway – back to the reason for the post (there was one – promise ;). My offer still stands – if someone can provide me with information as to what “massive” will look like in 12-18months for Foursquare and we can agree on that (as compared against similar information mapped from entities such as Bebo, MySpace & Friendsreunited (remember them)) then I’ll happily put my money where my mouth is – be that in the form of a charitable donation or a meal on me or whatever. 

And tbh, nearly 3million foursquare users spread across the global SoMe bubble growing capitals does not longevity make – it’s the uptake from the people & kids on the street that is what counts long term, and I reckon they’ll tell you where you can literally stick your virtual Mayoral sceptre too. 

Comments

[Matt Alder]

Oh Alex for someone who has never used it and has been very clear that they dislike it you really do go on about FourSquare a lot!
Why does it have to be about big numbers? I think we're seeing now that Facebook, Twitter and LinkedIn have a monopoly on big user numbers and no service is going to come near them anytime soon. Surely success for FourSquare in the medium term is making enough money to thrive (either revenue or investment) and having a user base big enough to facilitate this. Something they seem to be doing pretty well at the moment.

If you did use it you would also realise that the mayor bit is actually only a small part of what it does. Here are some of the others:

It has built a fascinating folksonomy of many different local areas. So many in fact that I'm yet to go to a place that someone hasn't put on there. This in itself makes it an amazing tool

It is starting to work as a recommendation engine as users begin to leave more and more tips about specific locations

More progressive companies are starting to use it as a geo local CRM. Best Buy, Dominos, Starbucks and Walmart so far but a lot more have plans

It offers a platform for incredibly accurate location targeted advertising. Because it is so targeted it doesn't seem like spam either

It allows people to meet up with each other which can be particularly useful somewhere like London.

For me the last point is the most interesting, as a self employed person with a fairly nomadic lifestyle I've been able to have a number of spontaneous business meetings thanks to FourSquare.

So actually I don't care about mass adoption if people don't want to use it then that's no problem. As long as the site continues to exist and my business and social networks continue to use it then I'm happy and don't care how many places I'm mayor of

[Alex Hens]

@matt - Can I just ask you to read my post a little closer.

My issue is not with facility (I'm sure it's very clever & useful etc etc) but firstly with the way people use it to pollute other channels updating their whereabouts in the most inane of fashions (I've unfortunately yet to find a successful way of suppressing this from my twitter stream) and also the way many people continue to jump on what to me (for reasons listed) has all the makings of yet another bubble in production.

[In regards to the first point @theHRD summed it up perfectly as being "like McDonalds litter" - http://myhellisotherpeople.com/2010/07/29/foursquare-for-sure-for-now/ ]

I'm really pleased you have found so many useful features from it personally. Last time I heard Andy Headworth (www.sironaconsulting.com) speak he also demonstrated a great way to use it for recruiters sourcing. Simple but ingenious.

There are a mind boggling number of incredible platforms, facilities and apps that are available for people to use today - and many will continue to thrive very well without the glare of mass media publicity because they solve a problem or enhance an aspect of the users lives. I am primarily questioning whether Foursquare can in any way live up to the hype - particularly as and when Facebook & Google set up their HGV transported portable home in that particular part of the SoMe field.

It has of course seen significant growth since launch, but what I wanted to know now, as I did when we last exchanged views in regards to this and you felt it would be "big" next year, is what constitutes "big" and "success" in an environment where platforms such as Bebo & MySpace have all been "big" & "successful" until the point where they fell off massively.

I think VC funding has proved itself time and time again to be little other than gambling as with the worst excesses of the stock market - cover enough bases with enough "leveraged" cash and if something comes up good enough for long enough you can exit and have made a packet - so I don't consider a business surviving off investment as "thriving". Existing? Sure. Growing a business and evolving a commercial model to fit the user base? OK. But thriving? No.

So I say again - I'm very pleased you and hundreds of thousands of people derive great benefit and enjoyment from it. I may or may not switch onto it at some point in the future, but my opinions stated here certainly are not about the functionality of it, so whether I have used it or not is, in this instance I feel, of little import. Particularly because my belief is that as good as Foursquare may or not be then the simplicity of having a google or facebook integrated facility will be the thing that takes geo-locational truly mainstream.

And whilst it's fine that you've got to a place where you appreciate the beauty of the app is in the experience of the user & the value derived therein and now feel that Foursquare may not be about mass market and big numbers, it was your tweet back in April that wanted to bet me it would still be "big in 12months" (http://twitter.com/mattalder/status/12163000881). So if we can agree what "big" is and we take this over 24months (probably still too soon for a plateau to be reached a la Bebo, Second Life etc, but certainly more fair than looking at 12 months) then am indeed happy to put my money where my mouth is.

But if nothing else, what I'm really interested in seeing is if anyone has been correlating the data that would allow us to spot patterns of long term success over storms in teacups. Or is it all still too fast paced an industry to have an element of reflection and learning from past lessons?
:-/

[Matt Alder]

Alex, Alex, Alex I think you're looking for some simplistic patterns that don't exist! As ever I'm more interested in what it does and how it influences what comes afterwards (there are rumours that Facebook is going into this space and they have a press conference tomorrow) but yes you're right I did say it would be "big" in 12 months.
What I was trying to say in my previous comment is that I think the definition of "big" is changing. For the first generation of social sites it was all about massive market adoption and Facebook, Twitter and LinkedIn won and the ones you mentioned lost simple as that. These next generation apps are all finding more niche audiences and harnessing (or polluting depending on your point of view) the first generation ones as part of their functionality. None of them will be as big as the big three but that doesn't matter.

To be honest I have no idea what I meant by "big" in 12 months. If I had realised you were such a pedant I would have said "still around" in 12 months. To be even more honest I was just bored of you being such a grumpy old naysayer (cf Facebook, Twitter and the iPhone)and slating things you hadn't tried. If you can't mentally filter out a few (and there really aren't many at the moment) location updates then I worry about your sanity when Facebook launch their service....

Matt ;-)

[Matt Alder]

Oh and by the way FourSquare and GoWalla are actually already second generation location services following in the footsteps and building on the functionality of the likes of BrightKite (which actually has more users than both of them)

Interesting times

[Alex Hens]

"Pedant: a person who is concerned chiefly with insignificant detail." Not sure asking someone to clarify the terms of a wager is "insignificant detail". But clearly it was meant more as a public baiting than a straight up bet and so I should have seen it for what it was and parked the fastidious part of my nature. Sorry :)

"Naysayer: distinguished by their tendency to consistently view the glass half empty and constantly emphasize the worst of a situation" I have to say I don't recognise myself in there, but perhaps you do - in which case maybe I need to go away and have a word with myself. I actually consider myself very much a glass half full person who simply enjoys the crac of a playing "devils advocate" in a debate and letting off steam with a diversionary rant every once in a while, which I appreciate generally allows my deeper seated scepticism to take flight too. Ah well - you can of course call me how you see me and I'll continue calling things how I see them.

As for my sanity - fear not. Went ages ago - accelerated by starting my own business, working from home and having to resort to ranting in virtual spaces only :-]

[twitter.com/Alconcalcia]

I don;t care how sexy, innovative, revolutionary or otherwise it is, it is still a pain getting inane tweets from people saying "I'm in The Kings Head and I'm the fecking mayor" Grow up! And as for acting as a recommendation engine, enough of the mystery has gone out of life already. I prefer to remain the judge of where i should go and what i think of the place. Finally, Matt "It allows people to meet up with each other" - who knew? I've never actually met anyone anywhere before, ever. I shall subscribe to Foursquare forthwith!

[bill fischer]

Benchmarking is always a challenge for determining what is success. IRR is a pretty decent approach but in the case of a start-up you need to figure out opportunity cost, sweat equity and cash. The founders of Foursquare have already put banked more than a couple of million dollars for their year of unpaid product development work, now have an equity stake in an entity valued at 100mm+, will draw decent cash salaries, and will be able to more into very high paying positions at other tech co's or have easy access to cash their next start-up. The early investors who have put in money at valuations from 5-100mm will need to see exits north of where they invested to see a return but, even if this investment is a bust, because they got in to a hot start-up co they will be able to attract more LPs and collect management fees that will generate more cash for them personally than they might make on the foursquare deal. On this basis, I would judge the business great success for the founders and early investors. Will Foursquare Inc. generate positive cash flow and, if so, for how long, is another question. Apple is charging, on a CPM basis, about $20. Foursquare has had over 100mm check-ins which, I think could indicates that they could succeed as an advertising play. But they are also building up enterprise value in the data they're collecting which, alone, I think will be valuable enough to recoup the cash and sweat equity that has been put into the business.

Our company uses natural language processing to evaluate over 120 million status updates every day. It is difficult making sense of short, natural language, updates, but knowing where someone is helps us immensely. that's why we append gowalla, foursquare, twitter (location enabled), google buzz and other location service data to our processing and we would pay for that data if need be.

Will individuals be explicitly checking in to foursquare inc. in four years time or will it be rolled into another service, I have no idea. I would bet that these location based services will become an important part of the digital landscape and that large businesses will be built on top of them.

Bebo represents an interesting case study. The founders and initial investors all got an amazing return on investment for the time/capital. The tens of millions of users had a great source of entertainment for several years (if a TV show has great ratings for 5 years and generates a positive IRR for its backers is it a failure?). The mistake was guessing that the popularity would continue and loading it up with high fixed costs and spending $850mm. For AOL, it was a disastrous mistake, but I would still consider Bebo a successful business.

[Alex Hens]

Bill - thank you very much for taking the time and effort to pen such an informative and complete response.

So I think what you're saying is that a bubble only really matters to the person who's last "holding" it when it bursts. Fair enough I guess. C'est le capitalisme :)

[Matt Alder]

@Bill stunning insight, thanks for the comment. Anything that reduces Alex to a mere two sentence reply is nothing short of genius!

@Alasdair You're a great guy and you write great copy but quite frankly I'm bored with arguing with you about digital adoption. If you hate tech as much as you seem to I suggest you stop reading blogs and stick to newspapers ;-)

[Alex Hens]

Matt - 4 sentences! Two blocks of text, but 4 sentences.

yours,
the fastidious pedant

;-D

[Sussexmatt]

It is really easy to bash FourSquare and frankly I've shouted louder and longer than most (Mr Hens excepted) about how much I hate it and think it's rubbish. Frankly I stand by everything I've ever said about it it's a noise engine and nothing more for 99% of users. The few companies that will get value are in the retail space but they can and will use better tools than 4sq to judge sentiment and customer trending.
In terms of it being the "next big thing” it isn't, wasn't and won't be, it's a flash that had the uber geeky amongst us (you know how you are and thanks to 4sq, at least 3 times a day, I apparently have to know where you are too) rushing to get involved.
Geo tagging is going nowhere but what’s the future of it for a consumer? I’m not convinced it’s as big as people would like to think, certainly those in the business of gathering information to sell on to others who need it just as much are gagging to get their hands on it and are inflating the value. 0.03% of the population of the world using 4sq does not make it a seismic shift in the behaviour of the consumer. As more people think about the potential for privacy invasion in a society worried about what ISPs, CCTV, Google et al are looking at, is there going to be a shift that makes everyone WANT to tag their location?
The next big thing? No idea.

[Matt Alder]

@Alex QED Lol

@Matt Disagree with you on fourSquare (obviously) but actually share some of your cynicism on mass geolocation adoption and usefulness. FourSquare works because it is very early adopter, very underground and tending to be used by people who fully understand the privacy implications.

Facebook Places is another matter especially with Facebook' appalling privacy record. I was shocked to hear for example that it lets other people tag you at a specific location with not much in the way of opt out.

This one is going to run and run and I'm not sure it will end well or usefully!

[twitter.com/Alconcalcia]

Matt I don't hate technology, I just hate hyped up and endlessly plugged technology. Google Wave anyone? There are hundreds of apps being invented/ developed every single day but come on, how many do we actually need? Do we really want to turn everyone into frenzied texting, tweeting, poking technology reliant people who are oft on the verge of a breakdown and can never forgive themselves purely because they forgot to 'foursquare' where they are?

Technology is great, but it is taking over too many hours of too many people's lives. Just look around you on a train, in a cafe, in the street. If I had the benefit of foresight rather than hindsight I'd have started up a mobile network provider service years ago and would be laughing all the way to the bank courtesy of the 60 million+ SMS messages alone that the UK population send to each other every day. I really do draw the line at the need to know where someone I barely know is at any given time of the day.

It reminds me of the guy in the Woody Allen film 'Play it Again Sam' - "For the next two hours I'll be on Alaska 2429. That's Alaska 2-4-2-9" - in fact it was a running joke throughout the movie that he couldn't go anywhere without having to let someone know where he was. Did Woody know something all those years ago?

That's the side of technology I hate. Where's the down time? The respite? What did we do before we were wired 24/7? We chilled, that's what.

[Sussexmatt]

@Matt, that was kind of the point I was getting at, the geolocation backlash is kind of inevitable thanks to Facebook places (we all know it's going to have some privacy disaster pretty soon after launch).
Gated communities are getting stronger and stronger and small communities are becoming more and more prevalent and important. The subsequent value of broadcasting location diminishes as people realise that they don't want the world to be as involved in their lives as those who live for the (virtual) spotlight.

[twitter.com/Alconcalcia]

I read somewhere the other day that burglars were cashing on on people broadcasting the fact that they were out and about somewhere. That's another thing. With every new technological concept there comes another scam or a crime. That case only yesterday. Bogus credit cards, stolen simcards. The people very cleverly set up a premium phone line at £10 a minute, phoned it for a month, billed the network providers, got paid their share then disappeared. They got them in the end but there'll always be someone out there looking at ways of making a few bob at others expense!

[Alex Hens]

thanks all - good little debate we got us there ;)

and (maybe) in conclusion, this article that I found interesting on "The real reason why VCs think Foursquare is worth $100million": http://www.businessinsider.com/why-vcs-think-foursquare-is-worth-100-million-2010-4

"Caveat emptor" indeed

[Sinead Bunting]

I rarely tweet as I don't feel comfortable publishing in public a personal stream of consciousness. So telling people where I'm currently located isn't something I'm going to rush into anytime soon.

However, I think we all appreciate that real-time location based services and insight is the way forward.

To borrow Stephen Fry's analogy - whether Foursquare is the John the Baptist or Jesus Christ of geo location services is anyones guess. But it does seem to be heading in the right direction.

As Kevin Kelly says, the trade-off in the personalisation of data and services offered by the web is our personal transparency.

Uncomfortable to begin with but perhaps an inevitability.

The great thing about this is, that surely there will be a whole industry dedicated to 'Ghosting' - services dedicated to hiding your personal life and profile from the cloud.

We may have missed the job board and real-time social services wave but surely we can make our millions here?

Who's with me?

[Alex Hens]

@sinead - I think that's bloomin genius. Seriously. Has to be something in there!

Do you want me to hide that comment before it gets seized upon and you end up telling your grandkids how you "had a great idea once... but some bugger nabbed it and that's why Gran's in this modest flat whilst John Doe is off on his Yacht having sold it to google for $100m".

maybe that's why you don't tweet - you subconsciously know that you'd give away too much solid gold stuff.

;)

[Sinead Bunting]

Quick, Ghost it Alex!

I'm off to the VC chaps in the morning.

And to follow will be my best-selling business memoirs, penned on said yacht..to keep the money trickling in and keep me in fuel. Bloody gas guzzlers, these yachts!

[Matt Alder]

Don't bother I'm sure Harrison has already nicked it and set up some offshore digital unengagement consultancy!