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Saturday, April 10, 2010

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christian

Too many people,too many ideas, I do not know what to say
`~~~~~

David Hegarty

Dave – great post. But I think there are a few more things to be considered…

Re: #3 – I think you’re missing a big part of the equation. You’re looking at the P&L but only focusing on the L. If you start making money on each new business that signs up, then you don’t need to take a huge investment to grow the market. Look at Groupon. 18 months old and already generating tons of cash…. and each new business they sign up is hugely profitable.

I actually think Groupon is a much bigger threat to Foursquare than any of the ‘Big Tech’ companies you mentioned.

Ultimately, both are building CRM for small local businesses. Foursquare is coming at it from the ‘Loyalty’ perspective and Groupon is coming at it from the ‘Utilization Management’ perspective (bookings are a little low for Monday night? Why not blast out a real-time Monday Night only deal to get butts on seats).

Niel Robertson

I'm not sure I agree with the comparison of FB moving to 400M users versus 4^2 growth. Its just what part of the exponential curve you're looking at. All major companies have gone through this growth phase (even FB and Yelp, etc..).

They key is absolutely in the value created by the linkage in the network. This is where i think 4^2 et all will struggle. Another user joining 4^2 current doesn't add any value to me. Friending someone on 4^2 doesn't either (I don't even track my friends on 4^2). To build a high growth network effect business these days you have to create asynchronous value in the links. I say asynchronous because knowing someone is across the street from me is synchronous value. I have to do something about it right then. That's just not the culture we live in anymore. So that's the missing model right now IMHO.

Niel

Wil Schroter

If the most exciting thing happening right now is creating coupons on iphones we have a much larger problem in Web tech.

I'm much more excited about what's going on at Groupon, and not because they just took a boatload of money off the table.

Let's talk about real businesses that make money, not headlines.

Jason Ziemianski

Why the future of Foursquare is to become the largest dating application ever http://twitdoc.com/c/r87m6b

Kelby Johnson

little late to the party, but your analysis (w/ all the caveats) is brilliantly "optimistic"

Ronan

I think you have your semantics wrong. Checkins are not coupons. Checkins are loyalty points, which can be redeemed for rewards such as discount vouchers or coupons.

Gzicherm

Dave:

I normally find you a very articulate and interesting commenter on the market, but this post is a bit surprising.

As someone who is super invested in entrepreneurship and startup culture, you come off as a big-company redcoat here. What evidence leads you to believe that Facebook can innovate at the margins of its business (they have let Zynga become fairly powerful, no?) - and why would you suggest that entrepreneurs cannot compete against them?

As a separate issue, I think your paypal argument about cash incentives versus virtual rewards is a tautology. The world has changed substantially since 1998, and the vast majority of the evidence suggests that virtual rewards (when properly socialized) are as or more meaningful than cash incentives. The research is elaborated on in my book - Game-Based Marketing (Wiley, 4/10) - the first look at how companies big and small use game mechanics to build and grow their communities.

Happy to talk about this some more - but your facts are wrong in this post, and cash rewards are increasingly becoming the province of lazy marketers, rather than the be-all-end-all. Meanwhile, smart marketers are taking their customer loyalty costs to near-zero with game mechanics, giving them a tremendous edge in the medium term.

Happy to share some examples if you want to hear them. :)

-Gabe Zichermann
http://gamebasedmarketing.com

Gagan Biyani

First - awesome post; your writing is fucking brilliant.

Second - completely agreed that LBS is all about couponing, but per your point, that's a huge biz. The real question is why is foursquare spending time with brand advertising http://techcrunch.com/2010/02/12/foursquare-revenue/ - seems like a total waste of the entrepreneur's time when they've got bigger fish to fry (like getting past 1M users?)

Third - Shouldn't one (or all) of those players simply double-down on user acquisition with whatever absurd amount of money they raise and then worry about monetizing later?

Loved it

This was Brilliant! Added you to my RSS. Found you via SIA post.

Marmarko

I think that the ecosystem of solutions that are brewing around these platforms will definitely have an influence on the outcome of the LBS platform race: http://goo.gl/fb/5OTHr

Account Deleted

Wow. I must have burned off a couple hundred calories just reading this. I can only imagine what it took to write, but I digress.

Great set of predictions that actually make sense. Couldn't agree with you more. Past behavior is the best predictor of future behavior, so I don't see Google or Microsoft or whoever else suddenly waking up to brilliance in a new category. It never happens this way. So yeah, you are right on extrapolating this out.

Dave Nattriss

I guess you didn't use FourSquare that much at SXSW or in general, as it does do coupons for those venues that have signed up to the scheme. I live in London and I've only seen one so far in the last six months, but that's one more than zero.

Morgan Schweers

eBay won't sell PayPal off until they've gone a long way down the death spiral. It'd be a sign of desperation, and they're just not desperate yet.

Once eBay divests PayPal, yes, the death knell will have sounded.

Of course Meg Whitman will be Governor by then. ;)

Walter Adamson

1. Do you write scripts for The Wire in all your spare time?
2. Yea guess I'm a dud because I used to think Apple was good at software until I lost my cool over iTunes 9 dot something which screws up 94% of my CPU time for 4 hours trying to do something to my iPhone when I'm just trying to charge the friggin' battery. And nowhere is there one skerrick of help google your heart out - they are losers for sure and you're spot on.
3. Re the comments, does anyone remember Digital, or EDS for that matter?

Walter @g2m
http://xeesm.com/walter

Joel Hughes

Great article!

I think the "show me the money element" is crucial and you hit the nail on the head there. However to be fair on (say) Foursquare, they knew they would have to plug the void before venues started to catch on (using the much talked about business dashboard) - and they plugged the gap with their own points/badges etc - these are kinda fun but where's my frickin free coffee? I can't drink a badge? (And, in fairness, starbucks are throwing some brainpower at using 4SQ etc as a rewards/loyalty/incentive platform)

@joel_hughes

Wilson Kerr

Great stuff. Been writing a lot about this subject: http://lbstrategy.wordpress.com/

Leo

Facebook doesn't even need to buy FourSquare or GoWalla, they have a much larger installed base of their FB mobile apps. Probably easier to just add a 'check-in' button to the FB app vs. buying and integrating...

Open up location based check-in functionality to developers in the FB API and all those other LBS gaming-mechanics can eat shit. Imagine what Zynga and other would do? Mafia Wars + location based check-in integration? Hell, i don't even like mafia wars but I'd rather be a virtual thug than the mayor of the Pho joint down the street where no one else has ever checked into.

Davidhhendricks

Great post - best since 'your solution is not my problem'...

There is room for maybe 2 of these services. People get tired of having to update all over the place. Updating with no compensation is basically a game for the incurably narcissistic.

I'm not sure i agree with the customer/business acquisition costs - user generated content + geo data + compiled data / large user base + incentives can solve that for far less.

Start paying people or the game gets old. Who wants to play a game without a winner?

David Haber

Dave - agree with you on a lot of your points. I've argued on multiple occasions that LBS will need to add in a transactional layer before they get adopted by the mainstream.

Coupling check-ins with payments would eliminate check-in fatigue (which is really fucking annoying) but more importantly give local business owners a way to accurately measure ad spending or customer loyalty incentives. (the real friction for business owners not giving away free shit for check-ins)

Feel free to check out my article - "Economics of a Check-In" at supplydemanded.com

Proxpro

I very much enjoyed your post. LBS developers so often have to compromise on the utility of their applications, to simplify them for mass adoption. Proximity social networking struggled with stickiness so ingenious check-in games were invented. I don't think the current genre of LBS app is the end game. The rewards you described will be too expensive to implement, so without utility, these apps will be superseded by sticky social LBS apps that are useful.

Julian Bourne
Proxpro.com
Predictive Social Calendars

Dave

@peter: not counting them out, just saying they better hurry up on the customer acquisition... and as soon as someone starts paying them / giving them discounts, everyone else will have to play that game too.

"by whatever means necessary"

Peter Chang

In general, I agree that the game mechanics only works for the niche early adopter / techie geek audience. However, I think it's unfair to compare Foursquare to Facebook (now). How many user's did FB have in year 2 of its existence?

LBS still needs to figure how it can cross the chasm to mainstream users. It feels like we're still in that experimental stage.

FB could crush them assuming they wanted to get into location-based advertising. Google hasn't been strong in social but it knows search better than anyone else. Wouldn't count them out so quickly.

FB is in a unique position to accomplish many interesting things in the mobile/location arena. It'll be interesting to see their take on LBS.

CK

McClure = G-Funk All-Star

"i'm gettin jacked / i'm breakin myself / i can't believe / they takin Wilson's wealth"

Laura

I don't plan on using any location based features on facebook with my hundreds of acquaintances.

I will use foursquare with my 75 or so closest friends.

Shannon Sofield

I love this post and the man behind it. Makes me feel like I'm playing in the kiddie pool.

Jeremy Pepper

Why I always love reading ya, Dave. And you're forcing me to finally write my LBS from a PR perspective post today.

I'm bullish on MyTown, and that's about it.

Dave

@MikeDuda: sometimes a little tough love is the best form of encouragement.

i hope FourSquare & GoWalla do well... but i still want my $5 bucks dammit.

MikeDuda

If the focus of the post was directed at (potential) investors, than I begrudgingly agree. While a Foursquare evangelist, the hype is seemingly out of control and the rumor-jockeying has been a bit much.

If you're challenging Foursquare/Gowalla based on what they've done to date, I'd argue it's waaayyy too early to be busting on them. It's like yelling at a one-year old Usain Bolt for not being fast enough. Give it time and let it develop...Foursquare especially has showed a couponing-esque offense and don't understimate the community it is indeed building.

Lastly, awesome use of "kids in the Hall" and "I squish your head" guy. Bravo.

Dave


@nonya: i resemble that remark.

Peter Cranstone

Fucking brilliant. Finally someone has the balls to say "the Emperor has no clothes". The current plays will either be absorbed and then canned or die. For the VC's it's about the acquisition, let's face it they're not charities. As for the current crop, exactly what customer problem do they solve? None. Somebody has to build these into businesses with sustainable measurable profitable revenues from volume. Instead they keep giving everything away for free.

Think about it for a moment - Google took $20m of VC capital before reaching escape velocity. Compare that with FB - $3/4B for what is essentially a free web page with pictures on it and other stuff. If they could go public they would - something is stopping them and it's not revenues. It's profits.

Bottom line - LBS is one leg of the stool, you need more context to make it valuable. Let's see how much more people are willing to throw at it to get it into the end zone. If you go past $20m you're on the backside of the power curve.

Avi Charkham

Thanks Dave. God this post was so refreshing to read :)

In the end of the day location would be 90.9% mobile device driven. There's a huge battle going on right now both on the device level and on the mobile OS level. Apple/Google/Microsoft are fighting like hell to dominate the smartphone market (not getting into who's going to win) but one thing is sure, at least right now, Facebook is not in that game.

Now in mobile devices defaults rule. And whoever controls the "LBS defaults" on the device will have a huge effect on the market... Not sure it will be enough to block Facebook but if done aggressively it could make it a bit harder for them:)

Tim Bonnemann

What's are 1:2 odds (your first prediction)? An absolute certainty that an event will occur... twice? ;-)

Sunshinemug

Nice post, Dave. I agree with you about the coupon side of the equation--and in fact there's no reason why businesses can't jump into that RIGHT NOW. They can also encourage folks to sign up on an LBS by offering inducements. I'm sure Starbucks has something along these lines in mind with their recent partnership agreement with Foursquare. I wrote more about this on my blog: http://sunshinemug.blogspot.com/2010/04/foursquare-are-we-missing-ball.html

To your other point, which is also Robert Scoble's and several other folks--it seems like Facebook should have a huge advantage in this little arms race. I say *seems*. We really don't know. There are all kinds of situations in tech in which we're all sure that someone will crush or otherwise outrun someone else and we're all made to look like total bozos. My money is actually on Foursquare. It's on a fast trajectory and it understands its platform and users pretty well. Not only that, but it is starting to get a clue as to how to make the app useful to retailers.

Don Synstelien

Dave,

Great post! But I disagree with your first assertion. Calling Game mechanics bullshit is, well... Bullshit.

If you think about it for a second, Facebook, Youtube and Twitter have all succeeded due in part to the powerful nature of game mechanics.

Follower count == points
Likes == points
Star ratings and subscriptions == points

I think that you even hosted a dinner where a presentation detailing the power of Game mechanics in social networks was shown: http://www.slideshare.net/amyjokim/fun-in-functional-2009-presentation?from=ss_embed

I'm not saying Game mechanics are everything, but you need to give them credit. They are worth much more than that $5 coupon if done right. (If... Done... Right...)

Just ask Zynga how much effort players are willing to go through to get a virtual cow or pig or whatever. (I'm also betting that Facebook owes more of those 400MM worldwide users to Zynga's virtual cows than people realize)

That being said... You are right about Foursquare and Gowalla's game mechanics. They are geared towards an early adopter crowd and they are still a bit geeky. (which is exactly who they are attracting) I'm not surprised that they are not pulling in the numbers that you want. But look at the more mainstream mechanics of MyTown... I believe they are succeeding in pulling in more users at a much faster rate, have you looked at them?

Best,

Don

nonya

I can't read this it's written like a 12 year old did it.

Doug

Wow, you swear a ton. Are you a painter in a previous life or worked in some other trade?

Dam fucking straight!! but, those words still cloud the mind with needless noise. So while it helps to make your fucking emotional point it clouds in other ways. And yes it is your god dam brand.

So hats off and nice post but, it was very hard to find the content.

Dave


it's more encouragement than criticism.


but there's a war on fer shur, and they better get Game ON.

MikeDuda

Is this post more of a wtf? to VCs or Foursquare/
Gowalla?

I think if it's to the latter, I would argue it's too early to kvetch. Like yelling at Usain Bolt as a one-year old that he's not fast enough. LBS-based companies have the opportunity to do what CitySearch and many others should have done and didn't: capitalize on monetizing local advertising and the data accrued for local/national advertisers.

If geared toward investors, I can respect that totally. The hype seems a bit much even for an evangelist like me.

Two other points:

• Normals are getting into Foursquare
more than many think.

• I love any use of "Kids in the Hall" especially the crushing your head guy. Well. Played. Sir.

Dave


nah, already WAY outside my price range.


they'll do fine I'm sure, just gonna need a lotta capital.


just what big dumb VC is made for, right?


(but srsly, you need to juice basic check-in behavior with discounting, and there WILL be a war over this point, mark my words.)

Charlie

Yeah, no one will ever check in, because it's not like the most popular SMS message is "where are you" or anything.

You trying to bring down the pre-money to get a piece, buddy? :)

Michael Arrington

a beautiful and brilliant rant.

David Berrebi

Very true post Dave!

Agree 100%

LBS is also a nightmare about security...
Most of the people do not want to tell to the world where they are...

Yaros Mischka

great post.

Don Rainey

Great, great post. A lot of self re-inforcing hype related to 4Square. You are spot on.

thechinese

Thank you, thank you so much for writing this post! For the past few months I literally thought that I fell through some warped hole into a fucked-up dimension where innovation was measured by how loud you can get the right people to be. The only thing unique about Foursquare and Gowalla is that it managed to make "couponing" hip amongst those moustache-wearing digital elites. But like all babies with their new toys, this one's gonna be thrown into some pile of forgotten junk. I mean, seriously the only reason why Facebook would even consider buying one of them would be to sprinkle it's reputation with some of them "hipsterism" fairy dust. Either that or corporate nepotism or both. We've all seen this before - some hyped up shit that no one has a need for gets bought and no one misses it.

René

What you are missing is, that this year or next year will come a social network that will have the grow rates to get over facebook. In the whole series of social networks every network growth strong in the beginning and then persist around a number. Yes, facebook handled the problem of user activity, but they will not be the last social network. The often told networks affects ARE WRONG for the space of social networks, because only 10 - 20 people matter for you and bring them to an other platform is damn easy.

So I think there will be a new network, what will be more mobile, but not gowalla foursquare or brightkite like...

Ian Tindale

My prediction is that america continues to diverge away from the world at large, by increasingly developing services and offerings that are of no relevance whatsoever to people in the world, but only have context in their one specific remote country. The geographic isolation. Similarly, developers worldwide will continue to write apps and web apps that cater for exactly the kind of person they are and their colleagues are. The demographic isolation — the same way that media on television is produced by television professionals mainly to impress other television professionals, and similarly in the advertising world. Production of actual goods will drop, and food will be even more scarce and expensive than it currently is, water will become a luxury.

Thomas Cornelius

Dave - dead on - but you only got it half right! For the acquisition of businesses we have just launched "dealwerk.com" a service from my company Adility to provide developers and publishers coupons and prepaid cards in all major markets in the US via API, platform, etc.

NOBODY has to build their own sales team, we do it for them and get them local content - and let the content flow like water through dealwerk API, dailydeal sites, etc. so that developers can focus on building dailydeal apps, checkin apps, etc. and even more important on dealing with the consumer and build a great experience for consuemrs. Let the best apps and consumer sites win, but don't make the mistake Mr. app developer to get into the SMB sales business - you will get crushed and never reach scalability!

Check the release here about dealwerk: http://bit.ly/cjM3lP (a day before your post - how timely).

Talk to me - I want you on our side & site!!!

As a present example - there is groupon and 150 single city groupon wannabes, BUT no wannabe can scale their local 2 man sales show with SMBs to a national gig with products in every city....now with "dealwerk" everybody can - we have just helped coupons.com to come out with a national dailydeal site (check it out at their home page).

Mark Essel

Fun times to be guessing.

Is Facebook going to retain it's 400million-1billion users long enough to win LBS? Dynamic userbase change is subject to the same rapid shrinking that it enjoyed as growth. Facebooks shooting to be the web, ingrained in every page by drawing eyes to content, and sorting that content (sorting great idea, being the web bad idea).

My prediction, Facebook implodes in 5-6 years. Now that's a gamble based on current trends.

SpecialK drive

I like your moxy kid ... lets do lunch?

k

$ 100m 's probably not enough. Google gave every local business $ 50 to advertise in adwords, and how many of those businesses tried that?

Hamranhansenhansen

> Profanity is a linguistic crutch of the typically inarticulate

Put down the Internet and read a fucking book until you remember that in writing a) there is style, and b) there are no fucking rules.

Jkaljundi

Connecting LBS to FB fan pages + adding rewards/coupons there makes a lot of sense. Most corporate/brand FB fan pages will die without monetary rewards/discounts/offers. People are unfan'ing them as crazy already, was fun in the beginning, now you just get marketing talk in your news feed.

Tonypeterson

Groupon and Foursquare should merge.

Dave

ha ha -- BRING that Venn diagram, sister!

(& thanks for dropping by :)

Dave

agreed adam.  and PayPal + $5B in cash is a formidable combo of assets.

still, requires will & wherewithal to know what to do with them.

and for the life of me, i can't understand what folks over there are thinking.

build, buy, or partner to do SOMEthing...

Kathy Sierra

Yet another passionate, caffeinated post with a pulse. Go YOU.

And this whole "With Game Mechanics!" thing? It's insulting to Actual Games.

Adding so-called "game mechanics" to something does not magically make that thing fun or engaging. And if something is *already* fun or engaging, it doesn't NEED "game mechanics" bolted on. They should be thinking about the HEART of games, not the MECHANICS.

And in the heart of games you find Cognitive Pleasures. Ranking and leaderboards and points are only useful, meaningful, relevant, or interesting when they are in service to a richer experience that turns the brain on. By themselves, these "mechanics" are a useless novelty at best, but most likely annoying and de-motivating.

[I feel a Venn diagram coming on]

Adam Trachtenberg

It don't think it would happen, but eBay has $5 billion in cash and PayPal.

They have the assets, but not necessarily the will, to play in this game.

Clay Graham

Very entertaining, and I agree if these services cant provide real value they have no meaning. The only part I can't believe is the winner take all concept. Just because there will be dominant players doesn't mean there won't be an diverse ecosystem, any more than myspace's early domination of the social space made it impossible for twitter or facebook to find a way in. Mobile and location are way too big, and this little kabuki opera has just begun. Very fun post though. Saying that, I agree with assertion #1 and that is why servicetattler.com will be one of the first LBS to offer real incentives and direct customer relationships to businesses.

Dave

i think you got in at a good valuation, and you will definitely make money :)

btw lemme know if any chance you might join us for http://SMASHsummit.com -- we'd love to have you!

have a good wknd,

Gary Vaynerchuk

u know what I think ;)

Stephen Sclafani

@Chadcat "Foursquare for the future" pretty much describes http://plancast.com/

WLLK

You left out SCVNGR, yo. Google gave em $4.4 mil. Think consumer product interaction for discounts/incentives. Might be the dark horse in this race.

Steve

I'm laughing at the blowhards who are all "Dave we should get together, I can tell you how it's gonna happen!" Dinosaurs of car salesmen

Karim Guessous

Currently spending the weekend in morocco, and these guys could care less about LBS. If you pronounce Facebook, now we are talking!

Ok, here is the long and short of it:

- MSFT canNOT survive without buying the other 98.5% of Facebook (DST would be more than happy to take 7.5X)
- GOOG takes over MSFT's bread and butter while clouding the rest of us.
- While AAPL is just enjoying itself reinventing our experience on the web...
- AOL and YHOO getting bored and merging to hopefully become too big not to get acquired.

... now the fun part, what happens to LBS?

- Facebook develops their own LBS organically and get even the moroccans to appreciate it!

... and twitter in all of this?

- they are too cool for me to figure out!

Chadcat

If only someone would invent a Foursquare for the future, perhaps that would be a wise investment...

Darren Makula

Two words: Microsoft Vine. That is all.

Dave

yes it is, and a very seldom-used LBS at that... with pretty crappy game mechanics, and no financial incentives.

(however if they build it into Android phones, then it might become useful)

John McCrea

Wow. Nice post. You did something here that I think is really hard to do for those of us immersed in Silicon Valley early-adopter culture (and who often have multiple incentives to cheer for the startup), which is to put this all in a much bigger perspective. Must go think now. :)

Dave

>> "typically inarticulate" perhaps... except that i'm not. 

on the contrary: i'm atypically extremely articulate, yet still like to swear for emphasis.

and complaining about use of the word "fuck" is a crutch for small-minded people who can't deal with diversity in verbal expression.  seriously, it's a word ... deal with it.

for the record: the more power you give to "forbidden" vocabulary, the more i love to use it to shock you.

Richard Fuld

Google Lattitude... That's an LBS ain't it?

Riz Tarded

Profanity is a linguistic crutch of the typically inarticulate.

Or as Dave might say it "Profanity is the crutch of the inarticulate motherf^cker."

Dave

>>@foo: "MSFT is going to die b/c Facebook takes $6B in search from google? "

1) mainly talking about LBS / consumer stuff
2) i *did* say "*VERY* slowly"... as in another 10-15 years
3) MSFT isn't getting killed [just] by FB, they're getting killed by Apple (HW, OS), Google (search, browser), and many, many others.  of course they'll still generate bazillions for a long, long time... but they crested years ago, except perhaps for a few interesting areas like XBox.

the primary evidence of MSFT losing relevance (at least in consumer market) is that they just don't come up very much in developer conversation (other than tools, not platforms) and they don't have even the most basic strategies for delivering distribution / user acquisition, as well as monetization.  they could easily fix this, but they have shown very little inclination or aptitude for doing so.. which is kind of sad.  they could be a player.

Dave

buying a (very small) Jaiku is not quite the same as buying a (larger, more developed) FourSquare or Gowalla.

not saying it's going to make Google successful in LBS, but it still might make sense for Google to do an LBS acquisition to accelerate development.

history doesn't always repeat itself.  but it does sometimes rhyme.

Pers Stemmer

Great point Jaiku/Dodgeball. Why in the fuck would Google basically buy those back?

foo

You guys are kidding right? The companies (not AOL) that are "gonna die" are profitable companies delivering $B of value to MMM customers every year.

Facebook is fun, and it might make money on advertising, but that is a zero(ish) sum game in google's world, so yawn.

Seriously, MSFT is going to die b/c Facebook takes $6B in search from google? What?

Jdrive

Absolutely stellar, ballsy post. And I thought my recent predictions were edgy... (http://jdriv.blogspot.com/). No wonder Christine Lu speaks so highly of you. We should meet someday.

Janet Sefton

Google bought Jaiku back when they could have ramped up and crushed a fledgling twitter on economies of scale. They had Dodgeball. Both these are DOG: Dead At Google. Google doesn't know social. They lose

TheGreatWazu

With that many predictions I'm sure there's a home run somewhere in there. It was however, genuinely entertaing and educational being able to hear you think out loud. And with such a passion. Was fun.

Dave


>>are you a betting man?

... you bet your sweet ass i am Fred ;)

but anyway i'm pretty sure you'll make money on FourSquare, perhaps even at the most recent valuation (at least 3x maybe, not sure about more than that tho).

still, i think FourSquare needs to raise a shitload more capital to make a go of it, and if they do get the take-out offer at anything north of $200M, i'd probably strongly consider taking it. don't know if i'd want to compete with Facebook and whomever else they buy if it's not you.

in any case, my point was mainly about the need for a big raise / lot of capital to win LBS... and also that with Facebook's userbase, they'll be a tough game to beat no matter what. 

Robert Scoble

Fucking right on!

Robert Dewey

They could try some interesting things with a coupon model. For example, I check into Starbucks, and get a discount. My friends now have 24 hours to check-in to Starbucks and get that discount, or they lose out. Maybe even limit it to a certain num of friends, such as the first 5.

fred wilson

are you a betting man?

Daryn

All good points Dave, and an interesting perspective, but you know what?

I just convinced my non-techie sister in law to signup for foursquare. you know how? telling her that two of her best friends were at a bar a half block from where we were... What we're forgetting is, just like twitter, tumblr, and blogging, you don't need to be a producer to use the platform. She will probably rarely checkin, but I'm sure foursquare will be the first thing she checks when she's heading out on the town.

Craig Elimeliah

Dave,

I cant tell you how fucking refreshing this post is. With everything that is going you nailed it right on the head (i kinda did this first and am about to launch a new company in the next two weeks to prove it) but I love that you just basically "GOT IT".

Would love to chat and give you a glimpse into the future that is line by line exactly what you have outlined above.

Drop me an email, trust me you will thank me that you did.

reece

wait... AOL's *not* dead yet?

kadavy

The first sentence of 3:1 made me laugh, until I got to "...no clue on social..." You read my mind.

Nalin Mittal

I think AOL dies as well. I think MSFT will take a looooooong time to die but it will eventually happen. It's amazing how long they've stuck around with little to no innovation.

twitter.com/hardaway

Brilliant. fucking. Post. Except that I think AOL and EBay die. Yahoo struggles. amazon remains a front end for garden variety e-commerce. All LBS sites go away unless either they find meaning or...I belong by day to the ClUeless Grandmother Society and the Small Business Association and I guarantee it will take more than. $100m to get 10m users.

hunter

tell it like it is preacher dave....

One of GoSqaureTown needs to hit ESCAPE VELOCITY before the big boys crush 'em
http://elapsedtime.blogspot.com/2010/02/geo-wars-how-foursquare-survives.html

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