#SFSNYC: Foursquare ‘Trying to Build a Gold Standard of Truth’ for the Industry
Pundits far and wide have proclaimed that data is “the new oil.” For companies like Foursquare, which connect users with local businesses, the maxim rings true: Foursquare users supply the company with loads of information on what consumers want to buy and experience, when they want to buy it, and how far they are willing to go to get it.
At Street Fight Summit Wednesday in Brooklyn, Laura Rich, CEO and co-founder of Street Fight, sat down with Jeff Glueck, CEO of Foursquare, to discuss how Foursquare has leveraged its location data to catapult growth and become one of the world’s premiere location intelligence companies.
Glueck joined Foursquare about three years ago. While the company still records its users’ visits to local businesses, it has pivoted in a big way over the last three years. 90% of Foursquare’s business now comes from its B2B work as a location intelligence company, Glueck said.
Foursquare’s B2B operations can be divided into three parts. First, the company is a developer platform, lending its API and SDK to over 100,000 apps. Foursquare hosts Uber’s driver directory, tagging for Pinterest, Twitter, and Reddit, and also works with the likes of Apple and Microsoft. The company also leverages its location data for measurement and analytics. As 90% of spending is still brick-and-mortar, Foursquare helps consumer-facing businesses plan smart campaigns and measure their efficacy. Finally, Foursquare works with media companies, which harness its data to understand who interacts with their brands.
Buttressed by these relatively new revenue streams, Foursquare is growing 100% year over year. “Those product lines didn’t exist three years ago and now they’re the vast majority of the company and they’re growing like crazy,” Glueck said.
Glueck took aim at smaller location-data companies that he claims cannot actually deliver precise data because they lack a sufficient number of data points to verify their numbers’ accuracy. “Some companies can’t distinguish what’s going on in a densely crowded mall,” Glueck said, declaiming the notion that those same companies then turn around and profess to know exactly how many people have visited a store.
By contrast, Foursquare can deliver precise location data because it wields billions of data points, he said. The company also has the resources and vast data inventory to deliver top-notch analytics because it can match a group of consumers targeted by a marketing campaign to a similar group of consumers. In other words, while other companies might claim that their campaigns are effective because they drive a group of loyalists to Starbucks a few times a week (compared to a supposed control group of random consumers who might not go to Starbucks anyway), Foursquare can compare “apples to apples,” juxtaposing a targeted group of consumers to a control group of consumers with very similar behaviors.
Glueck called this precise approach to location-informed analytics and measurement part of the “science of incrementality” that Foursquare follows. Unlike many of its competitors — particularly adtech firms, of which Glueck said, “it’s not a secret that there’s a lot of smoke and mirrors on the adtech side” — Foursquare does not claim responsibility for every consumer who goes to a store during the duration of a campaign informed by its location data. Rather, the company helps marketers and businesses understand the difference between how many consumers generally visit a store and how many consumers visit as a result of campaign exposure.
“This is retargeting in the real world,” Glueck said. “We’re trying to build a gold standard of truth for the industry.”
Rich prodded Glueck about potential acquisitions to no avail.
“We’re eyeing our first profitable quarter,” Glueck said. “We could be an IPO kind of company in a couple years or less.”
Joseph Zappa is Street Fight’s news editor. Photography by Shana Wittenwyler.