Foursquare needs to strap its belt properly. They are on for a tough roller coaster ride. There seem to be a lot of hiccups in the way and if they are not tackled, foursquare could lose all the uniqueness, catchiness and most importantly all the return on investment. As a young company the going has been well, but the question is “Is the whole scheme of revenue generation strategy sustainable?” Can Foursquare actually learn from Twitter?
Well, Twitter too has passed through this phase and has made a good recovery. Being accessible by third party can do two things – it can increase the popularity of the app but at the same time may not contribute to app traffic. This is where revenue gets hurt when you can open the application through a third party source. For twitter this number was at one point of time 85% and twitter was not earning a penny through this.
This was the time it had to reconsider its revenue strategies. Twitter started acquiring third party companies and the popular tools from different companies. Now after having acquired these companies they started cutting down on API accessibility for third party companies. So Foursquare, if it plans to grow besides the 8 million active users it has presently needs to make sure of how the third party companies will have access. The earnings today are $2 million for Foursquare but it can be a much bigger figure if Foursquare can identify how to monetize deals with third party companies. It is high time Foursquare puts the brakes on their current revenue model and get back the traffic they are losing.
Selling Point for Foursquare
The next thing up on Foursquare’s plate would be finding a different USP than just discovery. When there are companies like Google, Apple and around a hundred thousand companies vouching for the same but in different ways, Foursquare’s USP becomes too hard a thing to sell. Plus the GPS companies are already trying to tie up with big shots in the market like Google and Apple to just change the way you could discover a new place. Foursquare needs a different philosophy completely in terms of what it wants to sell. Today a business doesn’t find it necessary which just brings in visitors – a business wants converts. So if Foursquare can be something or even close to something which can convert visitors into customers, maybe businesses will be interested.
Foursquare has been a cool app for its casual approach towards locating people. But then there are other companies which are trying to outsmart Foursquare by being a little serious to the approach and mining data from locations and trying to figure out trends in consumer emotions. Tomorrow Apple might just be the winning horse in terms of locating people but today there’s still scope for Foursquare to be that casual location app which knows how to think about the future. Foursquare’s future doesn’t lie in the present and if they are not going to do about it, then maybe Foursquare will never even have a fair chance of competing with the new big shots in the arena. It has already 8 million active users and that’s a huge number. It needs to use that audience and have the share of returns on investment a successful company, a successful idea needs to have in the coming years.