Foursquare Looks to Shift From Gaming Novelty to Essential Tool

Matures from location-based game to utility

It’s not a coincidence that Foursquare’s fastest growing team works on its location-discovery/recommendation tool Explore. That feature anchors the new Foursquare that launched last Thursday, shoving the startup’s claim to fame, check-ins, aside. Becoming mayor of your local diner is so 2009.

While the six-months-in-the-making overhaul favors recommendations over check-ins, it’s not a pivot, said BIA/Kelsey senior analyst Michael Boland. Instead “it’s an acceleration of [Foursquare’s] existing direction,” he said.

Foursquare essentially wants to move the product away from being a game-like novelty for many early users toward becoming an essential utility embraced by millions. “Now, being able to update the app to really make it something that helps you make the most of where you are, that’s a huge step for us,” said Alex Rainert, Foursquare’s head of product, in an interview at the company’s New York headquarters.

Central to that objective is Explore. Foursquare debuted Explore last March, but until last week the feature was overly time consuming. Users had to decide whether they wanted to search for a specific spot, see nearby places or view a list from one of several categories, such as top picks, trending, specials, food, etc. And even within any of those choices, users were presented with a list along with the option to view a map of locations in a new window. That didn't work for people walking around or driving to find some place to go, as users basically had to stop and sit down before figuring out where to go next. Not anymore.

The new Explore tab—which had been sandwiched among four other buttons in the app’s bottom bar but now claims the central position within the app—has streamlined the once disjointed experience into a centralized hub. Now when users click Explore, they’ll instantly find a map highlighting top spots nearby. They can still search by category or location if they so choose.

Plus, Foursquare has augmented its previous text-only location list with new modules that include a business' name, distance, the number of users currently checked in, user comments and which of a user’s friends have been there. “Good old Explore is still there, but what we really wanted to do is take some of these great recommendations and really bring them to the top level,” said Rainert.

“We’re always looking to make those recommendations better and more interesting,” Rainert added. “You can imagine that we can start using the weather as a signal, and so down the road we’d be able to say we know it’s raining where you are, here are some art galleries you should check out.”

But Explore isn’t the only feature getting a makeover. The company has redesigned the app's activity stream, making it more like a location-centric version of Facebook's News Feed by adding social interactions, including its version of a like button (users can elect to like a friend’s check-in or a venue). Folks may snipe at the copycat move, but by Thursday afternoon Foursquare likes were outnumbering Foursquare check-ins.

That rejiggering begs the question: Have users checked out on the check-in? A bit, but instead of users completely fleeing Foursquare, they appear to be doing more than tapping a couple buttons to say “Here I am, world.” In March U.S. users averaged more time spent on Foursquare’s mobile site and apps—145.6 minutes—than Pinterest, Tumblr and LinkedIn combined and even exceeded time spent with Twitter, according to comScore. Foursquare's user base just hasn't grown at the rate of those platforms.

Indeed, more crucial to Foursquare than whether users are checking is whether they’re using the app at all. As the comScore numbers point out, many are, and the new Explore and activity feed gives them a lot more reasons to keep doing so. Now, as for the business model, well, that's an evolving story, one that Explore may bolster.

Foursquare says that its potential revenue model lies in all the local data they have and how they harness it for merchants and brands. Explore should only dial up the data meter, as Foursquare will mine information like users’ check-ins, friends’ check-ins and now likes to recommend relevant locations to check out. In addition, this summer Foursquare will be rolling out a paid program for merchants to run promoted offers and—shocker—the backbone of that ad product is the Explore algorithm.

But it’s not just a business model that should be top of mind for Foursquare; it’s the business itself. The mobile-social-local game is heating up and fast. “There’s a lot of activity in the space right now. What we’ve seen with the introduction of Google+ Local [and] Foursquare realigning now…I think a lot of that is being driven by what Apple’s going to be introducing [Monday] at WWDC,” said Dennis Chacón, director of search at Gyro.

Apple is expected to drop Google Maps as the back-end technology powering the iOS maps app as well as an OS-level integration with Facebook akin to how Twitter became threaded into iOS last year. “That’s really forcing Foursquare to step up their game,” Chacón said. And with the coming rollout of Google+ Local to mobile, fusing the search giant’s social network, Places product and Zagat reviews, “in order for Foursquare to stay relevant, they realized they had to broaden the scope of what they are as a platform,” he said.

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