Foursquare: the startup zombie that still eats your data | Sidebean

0:00This video is brought to you by us, SlightBean. We help startups get their ideas investor ready. Check us out at SlightBean.com or with the link in the description. All of us millennials didn't. At least once, we checked in on Forsperr. Maybe we held the mayor status for a few days. Maybe we even have a super user badge. So you and I and millions became one more piece of the puzzle. And we still are. But how is Enforceware dead right now? Isn't this company forensics? Well, that's what you might think. But chances are you're still using Forsperr even if you don't know it. Correction actually. Forsperr is using you. But let's talk about that in this episode of company forensics. In 2009, Dennis Crowley and Navine Selveduroi wanted to create a Twitter competitor but with a twist knowing where your friends were. So Forsperr was born. And the idea was simple. The app lets you put in your location, a bar, a restaurant, a cafe, and all of those who followed you knew where you were. And you could post statuses about locations, review them. Some locations even had an automatic check-in system. Also,

1:01you could collect badges depending on your activity. And the most common visitor at any location would earn the mayor'ship status. Which for 2010's internet was huge. Being the mayor of a popular sport was equivalent to being verified by Twitter today, which I still don't have. Thanks to the Twitter integration, you could also tweet your location and DM your friends. The magic behind Forsperr was discovering new venues from bookstores to cafes. Businesses got a boost from visits thus creating this many network for both consumers and businesses. I remember discovering a bunch of cool restaurants just because they were well reviewed on Forsperr. But it could also lead to stocking, but that's not in the brochure. The idea caught on and it was so popular that some say it could become a worthy Facebook adversary. Rice in popularity. For a moment, this prediction seemed accurate. Forsperr was the new cool kid on the block. Businesses were quick to place the Forsperr logo on their windows and their contact forms. As for users, Forsperr is also trending upward, knowing where your friends were and collecting badges became addictive. It was only a matter of time before celebrities got caught up in this Forsperr hype. Some celebrities

2:01even created this celebrity mode, which allowed their fans to track them and other members of their crappy TV shows. Astronaut Doug Wheeluck checked in on Forsquare from the International Space Station and earned him a NASA Explorer batch, which was a bit unfair. So to please those of us who didn't get to go to space, NASA created a special website for others to also earn the batch. Even Barack Obama checked in on a town hall meeting, not a security concern. Businesses then created badges to help lose traffic, and for example, you could win free ice cream or pizza or even books depending on the places that you had visited in the past. And back then, Forsquare was really huge. There was even talk of a unicorn valuation and plenty of interest from competitors. Yahoo was the first knock on their door. In 2010, the giant offered so much between $100 and $120 million to acquire the company. But then, none other than Facebook came up with another $120 million offer. And after that, it is said that Crowley asked for $150 million to sell the company. And Zuckerberg walked away. Crowley insists that he was looking for the best future for the company. But as we're going to see in a couple of years, the media really blasted him for not taking that money then. Because in no time,

3:05the acquisition talks were off the table. Forsquare's numbers were the main reason. With only $1.35 million in revenue, investing $120 million for this product seemed crazy. So in no time, Forsquare lost its traction. But why? Well, first of all, there's Facebook. Sure, Forsquare had millions of users, but massive dominant Facebook was just too powerful. And there were other sexier social networks such as Instagram and Snapchat starting to grow up. And checking in is not a sexy as pictures. Lots of pictures. Forsquare lost ground fast. Crowley needed cash. And with no deals, he saw it's investors. And recent Horowitz dished $20 million, which was almost heaven-scent. When by the time they managed to raise it, Forsquare didn't only face external competition. Crowley needed to go beyond the growth stage, which had eaten away the company's finances. But no money meant no innovation. So he raised another $50 million with a $550 million valuation. That was about it. No more cash because he was yet to show a worthy

4:06financial model. And making money was still Forsquare's challenge. In 2012, for example, the company only made $2 million. So the media feasted on it and predicted a downfall. In 2013, business insider said that Forsquare would die by the end of the year. And that, it shouldn't be a surprise, but backstage Crowley was working some magic. Time for a turnaround. The irony was that Forsquare was sitting on a part of gold. They just didn't know how to use it. All of those check-ins, all those venues, locations, food traffic. What is all that? It's data. It's pure, unadulter data, such as having 85 million places registered. And people love data these days. Forsquare had so much data that business owners approached them with questions about their markets. Since 2014, Crowley ditched making friends. Now, Forsquare would be all about helping businesses, advertisers, brands, and developers. All thanks to their data. Now, before you raise your fists in the air, that's what the fine print is for. You agree to use Forsquare, you agree to share your data. The challenge was to make it all work. The going gets rough. To fulfill this

5:11new goal, Forsquare split and release the social network swarmed. The apps still focused on checking in, but added a couple of new perks like close friends and close friend networks. Then the other app, Forsquare's city guides, became a yelled competitor. Again, users checked in and reviewed venues. Again, more data. And for a second, it seemed like the split would work immediately. But before the decision, Forsquare really trended downwards in this download department of the app store. However, after the split, downloads increased. And there was much hype around both launches. Swarm, for example, meant to rank in the top 10 during August of 2014, but hype soon died down. By September, it had dropped below the thousand mark in both iOS and Android. Forsquare, the other app, was no different. Following the hype, it dropped well below the thousand position on the iOS store. It seemed like the end was near, but perhaps that was the plan. The real goal. At the time, Crowley might have seemed delusional to some, but popularity wasn't Forsquare's game anymore. You see, for years, the company had optimized its data,

6:12its tools, and its technology. So the income would come from licensing all that hard work. And to do so, the company did need to make some changes. So Crowley stepped down as CEO in 2016. In came the COO Jeff Gleuk, to inject new energy into the company. But while the waters inside the company were shifting to the outside world, Forsquare was disappearing. Unless you were really into reviewing and visiting places, there was no use for this app. Swarm also had media or career results, even Crowley admitted it in 2017 that he didn't use it much as a social network. Instead, he insisted that the value was about logging your life. By registering up to 100 places, you defeated the ephemeral nature of the other social networks. I remember when Forsquare and Swarm split. I hated the change because it was this weird interface problem where you had to go and check in on Swarm to then be redirected to Forsquare and then the major ships lived here and there. Then you started that coin system in Swarm, which I think sucked. But I really, really loved Forsquare. But it's that now. But Crowley did have a secret weapon called Pilgrim. Pilgrim was a software development kit that sensed whether

7:17a phone was moving in and out of a venue. But here's the catch. Users didn't need to press a check-in button. It did so automatic. And yes, of course this is intrusive, but again, you have to read the fine print. Selling Pilgrim made perfect sense. The automatic tracking could predict trends and show user behavior with more precision than effort. Plus Pilgrim belonged to Forsquare and Forsquare didn't belong to big companies like Facebook and Google, which made it even more attractive for a specific type of user. By 2018, Forsquare's data had three billion hits from a vast array of users. Plus 25 million people worldwide had chosen to have always on data tracking. When you later, 150,000 developers had used their technology. That's a good chunk of change. In 2019, Forsquare merged with data companies factual and placed. And with these companies on their side, it had cemented its reputation as a data colossus. This meant finally a solid business model. And by the way, yes, Swarm still exists. So do ribbons for typewriters. It's a niche product for a niche activity, life logging, I suppose. Forsquare's data and software now helped

8:18the power apps by Microsoft and Samsung and Twitter and Uber. In Q4 2020, the company had its first profitable quarter in over a decade. And in 2019, they showed revenue for more than $150 million. And honestly, there is no better ending here. So while we believe that Forsquare had failed as a social network, and it did, it managed to reinvent itself. And yes, all thanks to you and me and the millions of people who just gave away our data. So I guess in the end, it was a social network, after all. We just didn't know we were a part of it. But we had Slidebean also believe in working together, but for a different purpose. We help startups present to investors. Getting your ideas investor ready no longer has to be a challenge thanks to our pitchstick builder. If you need help writing or designing your slides, you can have our team jump in and help you through the entire process. We can even help you build a financial model to estimate your revenue. Whenever you need more in-depth guidance, our team of experts is available for one-on-one sessions as well. We want you to pitch with confidence. So check us out at slidebean.com or click that link in the video description. Thanks a lot for watching. We will see you next week.