In its heyday, Foursquare was a leading social media company that had the novel idea of using geo-location data as the basis of its network. But as other social networks such as Facebook, Twitter, Instagram started including check-ins in their products, it became harder for Foursquare to stand out from the pack. Its star has been falling steadily for the past few years, and now it's making some more drastic changes.
Late Thursday, the firm announced it had appointed a new chief executive, Jeff Glueck, formerly the company's chief operating officer. He replaces co-founder Dennis Crowley, who will now become executive chairman. The company also said it had raised a $45 million round of funding. Recode reported that gives the company a valuation of $250 million -- about half the valuation of its previous funding round.
Those are hard headlines to deal with, but things may not be as bad as they seem. Foursquare, after all, has been expected to meet its final end many times before now. Three years ago, analysts at PrivCo proclaimed that the firm would fail by the end of 2013. But it still has more than 50 million monthly users for its services, and has logged more than 8 billion check-ins, according to its website.
Foursquare also has in its favor a large bank of data from users who've checked into locations using its network since it was founded in 2009.
"They do have a ton of data, and they are clearly focused on monetizing that data," said Jay Wilson, a social marketing analyst at Gartner. "The challenge they’re facing is how to they keep users engaged with the app so that the data keeps coming in."
In some ways, the new moves extend what the company has already been doing. In 2014, the company made the risky choice to split its service into two. Foursquare became more of a Yelp competitor, featuring reviews of places where people had checked-in. The other side of the company, Swarm, took on the traditional check-in and social features. The split wasn't completely smooth. Many long-time users felt alienated by changes. But the emphasis on reviews was seen by analysts as a smart way to make Foursquare's data more valuable to brands and companies.
Wilson said that Foursquare has seen some success in marketing this data to small and local businesses, but hasn't done as well with mid-sized and large businesses. Having Glueck -- a former chief marketing officer-- at the helm could help the firm, Wilson said. At the very least, it shows Foursquare is more serious about courting the business market and finding ways to differentiate itself from the pack. He also noted that another staffing decision -- to make chief revenue officer Steven Rosenblatt the company's president -- sends a similar message.
If it can survive, Foursquare might escape "cautionary tale" status and could even become a good template for companies on how to keep moving once all the hype has cooled down. But that will be difficult and requires Foursquare to explain its big pivot to become a tool for businesses, not just a consumer product for checking-in.
In a blog post, Glueck acknowledged that shift. "Our mission has become steadily more ambitious," he wrote. "We are now a fast-growing location intelligence company, making consumer experiences richer and informing business solutions."