Startup god Dave McClure weighs in with a reality check on Foursquare and the latest tech craze:for all u nosebleed-valuation VCs jockeying to finance the dorky geniusues at FourSquare, GoWalla, and every other LBS [location-based services] vendor / app developer out there, it’s time to face the music. while i admit everyone at SXSW (including me) was tweet-whoring themselves all over Sixth & checking-in like a sex worker at a Fuller Brush convention, let’s not delude ourselves — the current method of check-ins are a classic case of early-adopter lust for shiny objects, & they have not a damn thing to do with long-term sustainable mainstream consumer behaviour. no way any normal motherfucker is gonna do this check-in shit.
So Dave thinks location-based services are toast?
He thinks there’s going to have to be a financial incentive for people to play ball:
Without financial incentives or discounts, there is absolutely no reason on god’s green earth to “check-in” for your stoner cousin, your luddite penny-pinching aunt, and certainly not your clueless grandmother. they could give a rat’s arse about your stupid little iPhone app with the pretty pictures and clever auto-discovery that barely works while draining the hell out of the battery… that is, until you give them $5 off their next beer or 5-dollar foot long…. at which point guess what?
HELLO, MAINSTREAM CONSUMER MARKET!
while there may be ways to simulate financial incentives & discounts with virtual goods, frequent flier miles, or other point-based systems & jedi mind tricks & psychological motivations, nothing works better to increase conversion than a cool $5 bucks in your digital wallet, or 20% off your next offline purchase.
if you don’t believe me, go take a look at the history of PayPal jump-starting initial account signup incentives with $5 discounts for joining, referring friends, and entering profile & bank info.
Now, you’re going to want to go read Dave’s whole post, because there’s a lot more there. Basically, Dave thinks the eventual winner in this space is going to have to spend a BOATLOAD of money to make it happen–on the order of $500 million.
Dave also makes a lot of cool predictions, like Facebook buys Foursquare, Apple buys Gowalla (or whichever one Facebook doesn’t buy), Google buys Twitter and Yelp, Microsoft buys something and flops, and…
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