Foursquare is still a start-up — because it’s been around for a little while, you might assume that a tech giant bought it and rolled it into their services — and it’s still raising money, including $35 million in the Series D round recently. They got an additional $15 million from Microsoft too — “skin in the game” is what you call it — on a two-part deal which is part strategy and part licensing. Here’s the Foursquare CEO on the deal:
“We think about it like, with the best stuff we’re working on, how do we make it more accessible to other companies?” Crowley says. “If anything, this [deal with Microsoft] will illustrate how companies can improve existing products with Foursquare data. It’s a starting point.”
Ah, big data. Everyone loves it, no one truly understands it. Foursquare has a lot of it, and it might be its most valuable feature long-term. There’s a “real-time recommendations” feature on there whereby your phone essentially knows where you are even if you’re not checking in anywhere — so it could recommend to you, say, a restaurant or a bar or coffee or whatever, especially if it’s a neighborhood your phone hasn’t been in often. Foursquare also powers the location services feature on Uber, Instagram, and Pinterest, among others — so there’s a ton of data about people, their locations, and their habits in those locations.
Don’t you think a big company with a massive suite of products — like, I don’t know, maybe Microsoft — would like to have a swipe at that data for the relatively small sum of $15 million? (That constitutes maybe two weeks of work for Microsoft; probably less than that.)
Note this paragraph too:
However, it’s also important to note that Foursquare’s deal with Redmond is non-exclusive, meaning it could partner with one of Microsoft’s competitors down the road. According to Crowley, data licensing deals are becoming a strong part of the company’s revenue stream.
It’s been a rougher year for Foursquare. A kid I went to HS with, who was Wharton MBA and headed there straight out, just left the place. But data licensing could be their future. Companies want to know about potential consumers and their habits. I’m surprised more big restaurant chains haven’t gotten in bed with Foursquare, honestly — and on the civic side, you’d hope a few city managers or local officials would consider some kind of data partnership to learn more about traffic patterns, clustered areas, etc. — maybe even get that “demand-based parking” idea off the ground.
Ultimately, this is all about “harnessing location to enhance web and mobile services;” in sum, the big idea could be that the future of social is indeed local.