“Did you see our news?” Foursquare COO Jeff Glueck asked with a big smile. Foursquare had just announced a deal that will allow Twitter users to include venue-specific locations with Tweets. “If you think about 500 million Tweets a day—at 70% mobile—and starting to get 10-20% of that content tagged to locations, the implications for creating conversations around locations, people you should follow, content that’s location relevant…there all kinds of rich consumer engagement and monetization possibilities.”
That enthusiasm for what’s possible isn’t the only striking thing about Glueck. Smart, experienced and accessible, Glueck brings to Foursquare what CEO Dennis Crowley needs to scale his vision, an operator who’s as comfortable digging into mountains of data as he is taking branding risks. Glueck has one thing on his mind: getting to profitability by building a contextually rich data engine that drives all of Foursquare’s businesses. “Mobile is about interacting in the real world. We are trying to connect digital media to the whole world,” he said in his keynote at Agility First! on March 25th.
Once a darling of the startup world, Foursquare has been dinged in recent years for its consumer app’s sluggish growth, given the more than $162 million it raised in the past six years. It has 57 million registered users in 100 countries, racked up 7 billion check ins, 65 million mapped establishments, 300 million photos and 70 million reviews. Of its total user base, 80 percent reside outside the U.S., with heavy representation in Brazil, Turkey, Russia and Mexico.
By comparison, WhatsApp, also founded in 2009, had more than 700 million monthly active users as of January 2015 (WhatsApp was started with $250,000 in seed money, went on to raise another $58 million in venture funding and was acquired for $19 billion by Facebook in 2014).
Foursquare’s global numbers, looked at on the surface though, could be deceiving. Glueck, Crowley and team are betting that what’s behind those numbers—where you go, what you do, what you like and with whom you spend your time—says a lot about individual consumers, representing priceless data for which other companies and app developers are willing to pay. “All that data science goes into this ability to understand where you are in the world and what might be interesting to you.”
“Clearly the single-use split was justified. Together, we’re generating incredible insights for consumers, but it’s also creating a big platform opportunity for us.” —Foursquare’s Jeff Glueck
The 200-person company, comprised mostly of engineers, is now focusing on several key areas to accelerate growth and revenues. First, it split its consumer app in two, preserving its original check-in app for those users who dig it. It’s also created Swarm, a new social mobile app that allows users to check in, share their location with friends and provide context for what they’re doing and where. “It’s a contextual understanding of the world, mediated by your tastes, your friends and places you’ve liked in the past that are similar to places near by. …What this game essentially has done is given Foursquare the freshest, most up-to-date map of commerce and life around the world,” Glueck said.
Since the app was split in two last fall, one third of people use Swarm only, one third use Foursquare only and one third use both apps. “So, clearly the single-use split was justified. Together, we’re generating incredible insights for consumers, but it’s also creating a big platform opportunity for us.”
To that end, Foursquare rolled out its Freemium model for commercial-scale usage of its data and tech licensing platform, something Glueck referred to as a “hidden gem” in Foursquare’s efforts to monetize its business. Some 85,000 developers and companies, including Microsoft, Yahoo, Facebook and Airbnb, use Foursquare’s technology platform for their own apps and businesses, a jump of about 30 percent this year, but no one ever envisioned it could be part of a paid business model. “We have to start charging,” he recalled saying to the team.
That seemingly radical change has already ushered in a number of deals worth tens of millions of dollars, with more to come. Asked about the challenges that startups face when introducing pricing models, Glueck wasted no time in responding: “I’m a little bit old school in that I like to have an idea of how a business is going to get to profitability. …We have a vision of how we’re going to get there.”
Any VC will tell you there’s nothing old school about liking the color of real money. Two thirds of Foursquare’s revenues come from location-based advertising, while one third of its revenues come from data and tech licensing. “We’re learning about the world and predicting how you move through it. We connect online activity with offline results. We crunch billions of data points to help companies better understand the real world and create platforms so that developers can create things we can’t even imagine.”
For Foursquare, pulling off these efforts simultaneously requires deft execution, and Glueck’s experience could prove invaluable. Prior to joining Foursquare last summer, he was CEO of mobile tech company Skyfire Labs, acquired for $155 million by Opera Software. He co-founded site59.com, an online travel agency for booking last-minute deals, which Travelocity acquired after two years of operation for $43 million in cash. Glueck became Travelocity’s CMO and was responsible for branding strategies that included the infamous “roaming gnome,” a new customer guarantee and a customer bill of rights. He recalled pitching the gnome idea to Travelocity’s board, which initially blanched at the thought of essentially spending “a billion dollars on a concrete lawn ornament.” During his tenure, Travelocity went from $3 billion to $11 billion in sales, thanks, in part, to that gnome.
The strength of Glueck’s management style lies in his ability to build credibility internally, while rolling out key initiatives to monetize Crowley’s vision for Foursquare. “One of the reasons I joined [Foursquare] was that, having been CMO and spending about $1 billion taking Travelocity from $3 billion to $11 billion in sales, I dreamed of a way that I could speak to users who have a particular interest. …What we enable is for advertisers to speak to people who have a certain interest.”
One example of Foursquare’s ability to help advertisers integrate the digital media experience with commerce that occurs in the real world: “If you are Nordstrom’s and you advertise with us, we can tell you how many people who saw a Nordstrom’s ad walk into one in the next 72 hours. They don’t have to check in, they just have to have their phone on them. This is a really exciting thing and a big idea.”by