Broadly speaking Foursquare has two overlapping audiences. There are those who joined early and use it to check-in and notify friends of where they are. Then there is a potentially much larger group of users who see it primarily as a local search and discovery app.
However the check-in “brand” has defined what Foursquare is to date, even as the company has developed some very innovative local discovery and personalization features. Thus check-ins have limited the way many users think of Foursquare — and limited its potential growth.
I suspect, however, that the legacy check-in user are much more engaged and frequent than those who use it as an occasional alternative to Google or Yelp for local search.
Now, in a very gutsy move, the company is separating its two major use cases into two distinct apps. Earlier today Foursquare announced that it would be launching a new app called Swarm in the near future:
We built Swarm because you’ve told us how often you still have to text your friends: “where are you?” and “what you up to later?” We wanted to build a quick way for you to know these two things for all of your friends. With Swarm, you can easily see which of your friends are out nearby, figure out who is up for grabbing a drink later, and share what you’re up to (faster and more easily than you can in Foursquare today).
Foursquare says this move is a prelude to a new version of its “flagship” app that is even more personalized and sophisticated on the back end. That will launch in the coming months. Foursquare no longer needs check-ins to generate data for personalization, hence the move.
From everything I can tell CEO Dennis Crowley really doesn’t want to sell the company. Generating more regular usage and new growth are key to avoiding a sale that might otherwise be forced by investors when the money starts to run low. Foursquare has raised roughly $150 million and probably has a third of that still in the bank.
Splitting the baby in two has both risks and potential rewards. In hindsight this will either be the moment that the company was able to return to growth or the one that sealed its fate and eventual acquisition by company X (Google, Apple, Microsoft, Facebook, Yahoo, etc.).
What are your thoughts about the strategy and whether it will help get Foursquare growing again?