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By Thomas Baekdal - August 2010

The Future of Foursquare/Gowalla

After writing "What Matters is the Trend, not the Moment," one question immediately comes to mind; is Foursquare and Gowalla going to last?

In its current form, no they are not. Right now, it is similar to when people on Twitter spent most of their time telling their friends what they had for breakfast.

On Foursquare it's simply *where* people are having breakfast, when they out shopping, standing in line at the post office, or waiting at the train station etc.

It's crap. There is no value in every day activities because they are so common.

The other part, about being rewarded and earning badges, will grow old fairly quickly. Especially when it becomes widespread and the discount and offers will diminish in value (due to size of the audience), or be limited to a very small user base (like only rewards for the Major). The majors are those ones who visit you store anyway. It is not where the real value is. The real value is in the long tail.

WholeFoods is doing the right thing. They are focusing on promotions that apply to everyone. The Major is just one person - a tiny percentage point of your customer base. Anyone checking in five times, that's practically every regular customer.

(photo credit: Dennis Crowley / Foursquare co-founder)

But the offer is insignificant. A small scoop of house-made gelato? Come on! It is interesting now that it is all new and exciting, but in a year, when location based offers are everywhere, it is not worth the effort.

Many stores already have loyalty programs in place. In the past many stores had special card that you could show at the counter. Every time you bought something, you will earn points that could then be used for discounts or special offers.

And you know what? They work, but not so much that they are worth keeping. My local grocery stored did this years ago. They stopped doing it because the rewards were too small to offset the inconvenience of "checking in." Instead of doing it with an app, they just used a card with a barcode on it.

What we are seeing right now is the novelty of the new and the trendy. For brands, that is an important element, but it is not the real of potential of location based services.

It's a new way to explore; it is new data that we didn't have before. But like Twitter, we quickly discovered where the real value was.

It's not about everyday activities, it is about the special things, the knowledge we can share, connections we can create, and people we can follow.

We will see the same evolution with location based services. Twitter is about the value of people and what they think/feel/know. Location based services is about the value of people and the places that matters to them.

What also matters are the customer experience, the feeling of belonging and being treated as a special person. And it matters that it is socially connected to the world. Sharing something is incredibly powerful.

Or think of it this way: It is much more powerful to simply remember your customers by sight. Threat them well when they revisit your store, or give them a bonus when they bring a friend. Don't just look at people as a general mass-market, only distinguished by a badge on their phones.

You don't need Foursquare to give people a great experience. You need Foursquare to market that experience and your customers need Foursquare to share and extend it beyond your control.

Foursquare is the glue, the rewards/discounts/badges are the incentive, but the value is in sharing the experience, and feeling proud that you did.

Nike could easily extend Nike Plus with Foursquare. Allow people to share not only their exercises but also where they took place. They could reward you for running with friends, for checking in at two point a certain distance apart - in under 30 minutes. Take part in Nike sponsored running events etc, and give you special discount based on how fast you got from one check-in to the another.

Fashion shops could partner with each other. So that, if you buy a pair of shoes in one shop, and a matching dress in another, you can get a limited edition scarf in a third. Suddenly you have higher sales across competing shops.

You could make people VIP (by checking in ten times or more) and give them the power to give their friends a special discount. Then it is no longer you who give a discount to a mass-market. But, your fans giving their friend's discounts to your shop.

Use location to create niche-communities. Use it make people feel they have accomplished something, take it up a notch if they share it.

As a business you need this. You have to be a part of the movement. With the mix of social and location, the experience of a place suddenly becomes a very influential element in your level of success.

But don't go out and create $100,000 Foursquare marketing events. Start small and create value. Give people a reason to check in and focus on the person.

And, don't use location based interaction if you don't have a location based business. It makes sense for companies with physical stores, events that's centered around a place, or where people meet.

But, it doesn't make sense for e.g., companies like Hulu or Amazon. Nor does it make sense for newspapers and magazines. For them it is just marketing, there is no real engagement.

It must be "for real."

Also remember that the traditional way of looking at location is very limiting. Location, in a digital context, is more than a physical location tied to a GPS position.

One example: Disneyland is a location but it is not a single location. The traditional mind would focus on each location, not realizing that people can share experiences across the planet in real-time - or even asynchronous.

The digital way of thinking is to look at Disneyland as a single place, shared by people on three continents.

A train or an airplane is shared location, but it constantly on the move. A concert is a shared location, but it moves from country to country while it is on tour.

GPS is only a small part of the real potential of location based services. That's the traditional mind limiting the future to restraints of the past. It's really about sharing an experience - and creating lasting value with that place.

Experiment, try new things!


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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé


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