Why FourSquare Is The Next Billion Dollar Company And Not Twitter

• It’s safe to say we all agree that mobile location-based advertising is the future, but no one is really sure how it will happen or what form it will take. There were a few cool companies that caught my eye in the last 3 years which showed potential in the space, Loopt being the first. A location based social network, Loopt tracks your location and let’s you communicate with your friends. At the end of the day, it’s like Facebook, in that I don’t go there in search of ads and the possibility for businesses to shoot me deals and such because I am nearby is  ultimately not appealing.  TouchiDot’s Sekkai Camera was another, using augmented reality via the iPhone to show logo overlays on buildings to display what businesses are inside and notifies me of any deals happening. Another cool concept, but it requires a lot of work on the user’s end and probably will only be a viable business in the future when I am wearing augmented reality glasses around to really take advantage of everything that is happening around me, at all times. Twitter has potential, but the way their standard web model works right now will not transition well into getting businesses to shoot me local ads unless I am directly following their account (which i find it annoying to follow businesses, as it clouds up my stream with information I only care about when I have an impulsive thought). What are all these models missing?
• Let’s take a look at the offline  location-based advertising model. Take-out menus on your doorstep, mailing-lists, coupons in the mail, etc. All very successful strategies that each of us has probably used at some point or another. Coupons being the most popular form of location-based advertising of all. Why? Coupons work because these are deals being offered from places that we recognize, places we like or have at least been before and they get you to come back. According to the Promotion Marketing Association Coupon Council, almost 80 percent of Americans used coupons last year and together saved more than $3 billion. Big numbers. Who has the best chance at taking this market? Not Twitter, not Loopt, not Latitude, and certainly not Facebook. It’s FourSquare folks. FourSquare turns mobile social networking into a game, one that interacts with businesses. People in nature are habitual and when they take a liking to something, they feel a sense of propriety over it (many of times these are places they hang out, eat, etc). FourSquare takes advantage of both of these human idiosyncrasies, letting people both publish the places they frequent and let’s them earn ‘Mayor’ badges if they are in fact the person who ‘Checks-in’ the most times out of any else that frequents. It makes it both a competition amongst users and helps business’ understand who these Mavens are entering their establishment so they can eventually hit them with deals. THIS is the model that will help transition the $80 B offline coupon market online and make our visions of mobile location based advertising a reality. If there is a company out their worth $1 Billion, I think the crown should be placed on FourSquare’s head and not Twitter. They take advantage of the power of Twitter’s popularity and openness, but lay on top a real business model that is already being put into action.
• Twitter co-founder Jack Dorsey understands this and it was no surprise for me today to see that he is one of the undisclosed angel investors included on the last round of funding that FourSquare recently took in {Cnet}. The total round was $1.35M, led my Union Square Ventures, $200,000 of which was put in by Angel investors. A steal in my mind for a company that is quickly on the rise and can move in many directions.

Tagged as: FourSquare