FourSquare Has an Identity Crisis — 7 Possible Futures for The Business

Does FourSquare need to be more than fun? Here are seven ways the company can solve its identity crisis.

It’s pretty clear that the folks at FourSquare are doing something right. They posted 3,400 percent growth last year and now boast more than 5 million users. People talk about being “mayor” of different businesses, often competing fiercely for the privilege. Some people are even putting their homes into the location-based social media application as a way to “win” some unspecified prize. Yeah, the FourSquare team is doing something right … but I have no idea what it is.

I’ve been a FourSquare user for a few months, now. I still get a touch of excitement when I’m notified of a new badge, and it is fun to “oust” some unsuspecting user as mayor. Unfortunately, I haven’t gotten anything for it. Of course, the bragging rights were fun for a while, and there are perks to being mayor at some places. But, those aren’t the places I frequent.

So, what’s the point?

Beyond the user experience, this speaks to a strategic issue that the company faces right now. To enjoy the explosive growth of a company like Facebook or Twitter, FourSquare will have to nail down its objectives and strategy more tightly. The way I see it, the company has to answer one question: what is it?

1. A Marketing Platform: FourSquare can be an effective platform for reaching consumers, driving loyalty and converting foot traffic into sales – even attracting customers who wouldn’t have been near a business otherwise. There are two problems here. First, businesses would have to effectively outsource part of their loyalty programs, making it a better tool for small and single-location companies. The other is that FourSquare would need to ramp up its efforts to get more businesses to participate, possibly even helping them launch and run promotions. This is a lot of hands-on work that doesn’t scale well.

2. A Game: End users can compete for mayorships, winning micro-competitions for uber-regular status. In another variant, end users with the most mayorships would win. The question remains, however, just what would they win? This points back to a high-touch business model similar to the “marketing platform” opportunity … unless FourSquare could come up with some benefits of its own.

3. Another Kind of Game: End users can compete for badges, with a diversity of experience leading to the accumulation of them and signaling leaders and winners. To make this work, there would have to be more transparency to badge winning, at least for some of them, so that participants could strive for certain goals. Leaving some to “chance” would sweeten it. This is probably the least developed of the possible identities for FourSquare.

4. Yet Another Kind of Game: So, why does FourSquare keep score right now? Every week the points are refreshed, and there are leaders in personal networks and regions. It almost seems like a bolt-on to the application. Points make games work, so there is potential here, but a lot of work would have to be done.

5. A Social Network: The latest round of enhancements allows users to interact with each other, leaving comments and including photos. People can connect and share experiences. Location differentiates it a bit, but then FourSquare would have to be ready to go head-to-head with the likes of Facebook, Twitter and LinkedIn. For this to work, there would have to be some underlying theme (see #6, below, for a possibility).

6. A Consumer Recommendation Site: Think of it as location-based Yelp. Tips and recommendations can be paired with photos and visit frequency to lend more weight to specific users’ recommendations. I see this application as having real potential, especially as ways to make the web more “local” continue to be sought (a problem searching for a solution for years). The experience would have to be changed dramatically, but the potential is high.

7. Nothing More Than It Is Now: Who am I to judge? I haven’t built anything as big or successful as FourSquare. And, 5 million people have identified some value in it. The company could just move forward on this momentum – or wait for an alternative above (or one I haven’t thought of) to emerge.

FourSquare does all these things right now, but the lack of strategic focus leaves them all jockeying for priority. This approach worked for Twitter, which let its business model emerge from end-user behavior (and continues to do so), but it leaves much to chance. Absent a clear direction for the company, however, FourSquare risks losing the interest of its users. To hit the big leagues, it seems to me that the platform needs an identity. Facebook is THE social network. LinkedIn is the business social network. Twitter is a public ongoing conversation. What is FourSquare?

Anybody else have ideas? I’d love to hear them! Leave a comment to share your suggestions.