As Facebook checks-in, will Foursquare check out?

09/09/2010

If you ran a global social network and could have gone back in time to the launch of Twitter, what would you have done differently? That's the recurring question in more than a few dotcom boardrooms. So as Facebook announces ‘Places’ that let its 500m users check-in and become location enabled, it could be time for location pioneer Foursquare to check out.

The ability to connect with friends through locations, and for locations to bridge the physical and digital social networks has been long awaited. Audiences are rising and reputation is growing. But all no longer looks rosy.

Recent digital history underscores that much is still to play for in the ownership of digital turf. There’s an incredible pace of social adoption when services find a gap in the market, and for Foursquare there’s clearly a market in their gap. Those lessons of rapid adoption and absolute focus on the engineering are ones Facebook helped write throughout its meteoric rise - and Google in similar fashion five years before. Now with the launch of Facebook Places, the world’s biggest social network is using those lessons to strike a massive blow to the foundations of hot location socnet FourSquare. When 500m Facebook users can check-in, it could force Foursquare to check out.

The problem for Foursquare is simply scale. It’s the familiar dotcom challenge and accentuated among start-ups. Fourquare found a gap in the market and threw its engineers hurtling into product-development frenzy to fill it. They came up with the goods: a step-changing fusion of mobile, simple consumer journey and neat market positioning. And they kept that engineering focus that successfully pulled them over the hurdles of scaling as the audience started to grow. It’s been uncomfortable, but they’ve made it.

Foursquare's early adopters users enjoyed the frontier mentality of conquering new places, becoming ‘mayors’ and organically bringing their social networks with. It’s the same influence-the-influencer approach among the techno-elite that Biz Stone pulled off so adeptly with Twitter. But the success of Foursquare’s model is in mass adoption, and for mass adoption the model needs to be successful; Catch-22. The only fast tracks are a massive marketing budget to build the brand (long gone are the deep pockets of dotcom funding), widespread distribution deals with mobile operators or device manufacturers, or riding on the shoulders of an existing social network (unlikely that a potential competitor will help).

The paradox is this: while their approach for location-sensitive social networking is sound, and its positioning has given it an edginess of the early days of Twitter, it’s growth potential is capped. But to be truly useful – and to cement its place in the socnet ecosystem - Foursquare requires massive adoption, and now.

It’s still possible but will need a new distribution strategy. Growth has been relatively rapid though still small in total active user levels. Consumer demand is clear, but gentle organic growth won’t deliver the mass market in the time frame Facebook will. For portals wanting to lever location functionality, Foursquare would be a neat acquisition but left on its own, it could be locked out of the mainstream and left in a techno-elite niche.

Mobile socnets are still hot property. This is where the VC money has been heading for 18 months and although it’s cooled gradually this year, the convergence of web, mobile and social remains exceptionally seductive. Long term the returns may be unclear, but portals, search engines, apps developers and the global socnets proved that where there is audience, ad dollars followed.

The VCs enthusiasm has already weathered the jitters of recession, and the chance to chase the growth curve of Twitter leaves VCs hungry to get in on whatever the new white hot social tool will be. Foursquare offers that, but only if it can outmanoeuvre Facebook.

What’s different between now and the Web 2.0 generation of challengers in the early 2000s, is that the incumbent market leaders – Facebook and Google - remain focussed on engineering and brilliance in product development. That makes the challenge tough. So while I hope Foursquare will succeed in hitting its tipping point, the odds are changing fast.

The future for Foursquare lies in the development priorities of Facebook, Apple, Yahoo, Twitter, and above all, Google. The momentum of Android will soon let Google lever the vast location data built up through search, maps and Streetview. When they combine it with the unique ID from their single sign-on, and add their social tools, it will make the current challenge from Facebook feel quite narrow. Foursquare needs to move much faster if it’s to avoid being turfed-out.

Danny has been coaching firms in digital marketing for over 15 years. More than 45,000 people have attended his talks and courses in over 30 countries. He set up and ran the UK and European IAB trade associations for almost 10 years, was the pioneering publisher of Telegraph.co.uk, held the Vice Presidency of NBC’s European internet business, and has been a government policy advisor in the UK. He is chairman of the Digital Training Academy that coaches marketing teams to improve their ROI and founder of the Digital Strategy Consulting practice that creates internet marketing strategies for brands. He is a Commissioner at the digital marketing regulator in the UK, and the publisher of Netimperative and Digital Intelligence. He now coaches management teams, helping them accelerate their businesses and transform their organizations. Contact him on Danny@DigitalStrategyConsulting.com or http://uk.linkedin.com/in/dannymeadowsklue

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Comments (1)

Karl:

Facebook is definitely in with over 4 million searches a day. Those numbers are pretty hard to beat!

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