Location-based social networking service Foursquare has been getting closer and closer to a sustainable business model over the past six months. In March, the company integrated “Specials” into their merchant platform, providing an easy-to-use tool for verified merchants to create and offer curated deals to Foursquare users. Foursquare also made big news last month with the launch of “Lists,” a function that allows users to create and share recommendations, followed soon after by the announcement of a long-awaited event check-in feature that builds on partnerships with ESPN, Song Kick, and movietickets.com. Amid the fanfare that welcomed these announcements, the July release, and August update, of Foursquare’s Merchant API went largely unnoticed. The offering marks a big step by Foursquare to improve their merchant services and in turn, lay the groundwork for future monetization.
Street Fight caught up with Eric Friedman, Foursquare’s director of business development, to discuss the company’s recent push to improve their merchant services, his approach to monetization, as well as best practices for building tools for small businesses.
How do Foursquare’s recent updates and features fit into the company’s product/monetization roadmap?
I think first we are pretty excited to get these new features into people’s hands. The Lists product is the first big iteration on what you can do with Pages — the place on Foursquare for brands and publishers. What we are trying to do with our roadmap is to execute against our product team’s vision while providing value to publishers and merchants. For the time being, we will not be charging for these services. A lot of these things are experiments. We want to see how they get used and how they can provide value.
With the Merchant Platform, we are testing things out to see what resonates. A big challenge is building a platform through which you can provide value to both the sole proprietor — the small business owners — as well as big brands like Starbucks. Today, those guys are using the same exact dashboard. We want to provide ways in which they can get new customers in and get the word out about their business before broaching the topic of monetization.
In considering monetization, what is location’s most valuable asset?
The strongest signal that we have is the context of intent. Coming back to search, you have intent for a word, or a phrase, or a place and that is actionable because you can serve up something that is relevant to that person. When someone checks into a place, they have a huge amount of intent; you immediately can infer certain things about the users based on their location. Once you have that data, you can then begin to provide information and services that all surround the context of being somewhere.
In having small and large businesses using the same platform, it puts us in a place where we have to focus on simplicity as well as usefulness, so both sides can use it effectively.
In July, Foursquare announced that Patch, Yext, and Clickable were in the process of integrating the Merchant API. What can we expect over the next few months?
I think the merchant API is pretty powerful – it’s out there and it does so much, it is hard wrap your head around it. What is really powerful about the Merchant API is that it will enable you to access all of your activity and resources from Foursquare offsite. So, if a merchant uses an integrated dashboard from another service provider, that’s okay with us.
Developers are building tools which you can add into your workflow or dashboard, both for the big guy who is building it into their business intelligence system as well as the service providers that help small merchants mange their business tools and want to include Foursquare as one pillar of their service. As a merchant, you want to get a quick pulse on how your business is doing. Foursquare represents one metric for taking that pulse, and I believe that’s our sweet spot and it is very complimentary to other things going on in the business.
Foursquare is used by both national brands and local merchants. What are the challenges in building a single product that can accommodate such a wide range in businesses?
It’s the difference between being a service-based company and a platform; it is markedly harder building for the latter. One of the things that I try to put us through when we brainstorm a feature is to make sure that we think about how the sole proprietor and the franchisee, as well as the national and international guys, will use the product. In having small and large businesses using the same platform, it puts us in a place where we have to focus on simplicity as well as usefulness, so both sides can use it effectively. And I think it is good to think that way, in general. I come from a background in search marketing, where the same tools are used being used by the individual marketer running a small operations as well as the folks that are spending a million dollars a month on a search campaign. So it’s the same type of dynamic, but on a different scale.
How do you promote best practices without becoming a service provider?
One of the things we are doing is a series of real-life case studies. We have been so focused on execution that we haven’t had the chance to write up a helpful how-to-guide. Instead, we’ve relied on forward thinking agencies and individuals to develop innovative ways of integrating foursquare into a campaign, so I think we can do a better job of documenting and organizing this information and that is something you can look for in the near future.
This interview has been edited for length and clarity.