Why is Foursquare dying?

22 Apr


Only a few years ago, Foursquare was considered one of the hottest, and potentially most lucrative, location based social media apps. For those who don’t know, Foursquare is an app that allows you to “check in” at locations, earn points and badges (for example, I would be the mayor of several bars if I ever checked in…..kind of sad), and share those locations with friends (wikipedia, 2013). Foursquare has raked in over $71 million in funding, however, was only able to bring in $2 million in revenue in 2012 (Hall, 2013).  Foursquare also has a heavy debt burden of $41 million (Schwarzberg, 2013)

The reason Foursquare is dying is because they could never capitalize on their niche. Eventually Facebook moved in with the additional of “check ins” to their social media platform, which has forced Foursquare to try and move to more of a business review platform. However, the business review app/website arena is saturated with competitors, and companies such as Yelp already have established presences and business models that work.

Foursquare’s last stand is to sell all its user data, such as user location and behavior data, to companies that will find the information useful. However, as soon as users find out that their data is being sold, a lack of trust in Foursquare could lead to a quick exit of users. Foursquare has tried many things to stay alive, but it appears as though they are on their last legs now, and unless they could find a dynamic way to stay relevant, they are destined to die off.

Below is a list of five reasons why Foursquare has not been successful according to Brian S Hall of CMO.com:

  1. Gamification does not scale: While the gamification features seemed to captivate some users initially, it appears that in the long run, earning badges and being declared king of the local pub was that interesting to users.
  2. The business model remains elusive: Foursquare has tried to be too many things at once, instead of sticking to one core attribute, which has led to direct competition with giants such as Facebook, Google, and Yelp.
  3. Yelp is better: For business reviews, recommendations, and ratings, Yelp has a better, well established platform that Foursquare cannot compete with.
  4. Better design isn’t enough: A new app format looks good on the surface, but combines too many features which results in a confusing experience for users.
  5. Selling data is not a slam dunk: While Foursquare has a lot of data based on location and users, there is no guarantee that those looking to buy the data will find it useful.


Works Cited

Hall, B. S. (2013, april 22). 5 Reasons Foursquare Is Losing The Social Local Mobile Revolution. Retrieved april 22, 2013, from CMO.com: http://www.cmo.com/content/cmo-com/home/articles/2013/4/22/_5_reasons_foursquar.frame.html

Schwarzberg, J. (2013, April 22). Debt woes weigh on Foursquare. Retrieved April 22, 2013, from The Deal Pipeline: http://www.thedeal.com/content/restructuring/debt-financing-may-force-foursquare-to-check-out.php

wikipedia. (2013, april 22). Foursquare. Retrieved april 2013, 2013, from Wikipedia: http://en.wikipedia.org/wiki/Foursquare



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