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Foursquare: The Second Inning

Over two years ago, I suggested to Yelp that they should pay attention to Foursquare.  While that post resulted in term sheets for Dennis and Naveen from VCs, the original intention was actually to get Yelp to invest in the company.  The Foursquare founders had been to nearly every VC we could think of and no one, save for Bryce Roberts OATV who was willing to do half the deal if he could find an east coast partner, was willing to jump in. 

I figured if I threw Yelp's name in there, maybe they'd check it out, and they'd agree to stick $200k in the company to let them keep going, maybe hire someone.  They could have done some kind of deal where Yelp reviews go into Foursquare or vice versa.  As far as I know, they never reached out, and 200k, pre-VC blitz probably would have been worth over $50 million now.  

Of course, that's all Monday morning quarterbacking and obviously the trajection of the company would have changed, but what's definitely true is that the latest update to Foursquare is gunning straight for Yelp. 

After they release their "Explore" feature, which leveraged user data of where people actually go to make recommendations, I thought their biggest challenge would be getting more people to use it.  It was inevitable they'd start doing social recommendations, but the only people who would see it were people who wanted to check in--the minority of the population.  How could they become a destination for people who didn't want to tell everyone where they were?

By committing the whole front page of their website, a property largely forgotten about and kind of an afterthought for people using the service, they've jumped into the recommendation publishing game.  This opens up a whole new set of opportunities for them--ones that could go far beyond the user experience.

What I wouldn't be surprised is if someone like Bing starts using Foursquare for their local search API.  Imagine searching for breakfast in the East Village and having Bing ask you whether you want to see where people actually go and then asking whether or not you want this customized for where your friends go.  Social searching is already a part of Google, too--who will show you when your friends have tweeted a result.  

This would result in a lot more web signups where people give Foursquare their social graph to leverage off the friend data to get results.  There are way more people that want to get recommendations than there are people wanting to check in.

That's why I think that, by the end of 2012, Foursquare will have double the amount of users it has today.  It won't all be app users--they'll have to be clever to convert people who just want recs into people who check in, but I think there will be a lot of folks who just want to see where their friends go.

I'm very impressed with the new offering.  One thing I want it to do is to let me fast forward--to tell me where people go on Saturday nights, but I'm sure that will come in time.  In the meantime, Foursquare.com will now become a destination in a way that Yelp never caught on with me personally, because it never leveraged my friends, who are the only recommenders I really care about.

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