Foursquare recently unveiled the “New Foursquare“, the latest version of its product. You may have heard that it was a radical shift for the company, with a focus away from “checkins”, and even heralding “the death of the checkin.”
That’s not true.
rumours Of The Checkin’s Demise Have Been Greatly Exaggerated
Checkins are still prominently featured. The home screen still shows you your friends’ recent checkins. The checkin button has moved but still occupies the same amount of screen real estate.
In other words, the checkin is still a very big feature of Foursquare, because it gives Foursquare two things that it absolutely needs:
- Distribution: each time you check in, it’s a message you can send to your Foursquare friends, and beyond that by posting your checkin on Facebook and Twitter.
- Data: more importantly, checking in tells Foursquare where you are, which is how the service works to begin with.
In other words, the checkin is as much at the heart of the Foursquare product as it’s always been.
Foursquare, The Social City Guide
Photo: news reports and company releases
Foursquare’s tag line has always been to be an app “that makes cities easier to use.”Alongside checkins, the other Foursquare feature which is put at the heart of the experience is Explore, which is a live, social city guide that recommends you places to go using Foursquare’s checkin data — that is, where your friends have been and their recommendations.
The increased prominence of Explore has many people saying that Foursquare is changing its strategy to becoming a direct Yelp competitor.
But this was always in the cards. From the beginning Foursquare has included recommendations, and from the beginning its business model was always going to hinge on local recommendations, local advertising and getting people to visit local venues—just like Yelp.
From a product perspective Yelp and Foursquare have different approaches—and it remains to be seen which one will win over the long run—but from a strategic perspective the companies have always been on a collision course. (Yelp for one has no illusions about this; witness how it added checkins to its app as soon as Foursquare popularised the feature.)
New Product, Same Business Model
In our interview with Foursquare’s head of business development, Holger Luedorf, he outlined a business model for Foursquare based on three legs:
- Analytics: giving merchants a view of who visits their stores and when
- Customer loyalty: becoming a digital version of the old “buy 10 get the 11th free” stamp card
- Yield management: allowing restaurants and other merchants who have high fixed costs and low marginal costs to attract customers by offering them discounts.
For this business model to work, particularly the latter one (which is the most potentially lucrative), Foursquare needs to be the app that people open to decide what to do when they’re on the go. In order to do that, it needs to be a useful city guide. With its proprietary data of where people (both your friends and people with similar tastes to yours) checkin and their recommendations, it can build a powerful, social mobile city guide. Hence the greater emphasis around the Explore feature.
THE BOTTOM LINE:
- Foursquare’s overhaul does not mean the checkin is dead. The checkin is still at the heart of Foursquare.
- Foursquare’s new product features its social city guide, Explore, alongside checkins at the heart of the Foursquare experience. Foursquare always wanted to be a social city guide, and this is another step towards that. Yes, this means Foursquare is a rival for Yelp.
- In other words: this is a new product for Foursquare, but it’s based on the same strategy and same business model as before.
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