Foursquare, a darling startup of everyone, might have raised a lot of money and might have an unusually handsome co-founder. But if you followed Techcrunch disrupt NYC, this year, when Michael Arrington questioned Dennis Crowley about the revenue foursquare is generating, he did not wish to answer.
Now at a platform like Techcrunch disrupt, who wouldn’t want to brag? It’s either they are making tons of money or they are making nothing. Nada. In my opinion it’s the later one. Now while the whole checking in funda is cool and was fun while it lasted (I’m already suffering from check-in fatigue), foursquare doesn’t really have a business model except for tying up with businesses for offering returning customers some offers.
But how would Square/Google Wallet take away Foursquare’s business you ask?
Here’s how. Square, a nice nifty startup launched to manage payments is soon gaining a lot of attention mostly because of one of it’s co founder Jack Dorsey. Jack Dorsey was also one of the key member behind Twitter. But that’s not the only reason why Square is getting a lot of attention. It’s because the startup he built is damn useful.
Managing your payments in digitalised format for customers and retailers is something I’ve always dreamt about. Square makes it possible. But that’s not all. Here’s why Square is above Foursquare and will steal the main revenue making possibility from Foursquare. Square can track user spending’s at stores even without them having to check-in. Besides that, Square will also take care that the customer doesn’t just checks-in but also spend money in order to get future loyalty rewards. It’s a win-win situation for both customers and retailers.
Foursquare, in my opinion would have to start looking at something different to generate revenue or should have exited when chance had arrived.
Google also recently announced their ambitious project – Google Wallet. Google Wallet is an open platform that will allow you to use credit cards, coupons, store loyalty cards, etc without actually swiping each card. Again something similar to Square. Here again Google can do everything what Square can do, that is, collecting data. And considering Google has tons of other products that users can link via their Google profile, Google has an advantage over Square. But nonetheless, it’s going to steal whatever business model Foursquare had in mind if they Google seems serious about expanding their Local and Social reach.
Either Foursquare needs to quickly find a new way to generate the revenue or stay stubborn and die the the internet death. It would be sad to see the yet another brilliant startup die a Digg like death where it couldn’t innovate and adapt with the competition.