Foursquare investor Fred Wilson on Thursday acknowledged that the social location company is still stuck with the perception that it is little more than a check-in service. Speaking at the SourceDigital13 conference in New York, the managing partner of Union Square Ventures said Foursquare had not successfully redefined itself as “maps with people you care about.”
“They’ve done a poor job articulating that change,” he said, noting that relatively few people want to check in from a location, but everyone wants to get recommendations and tips about restaurants and nearby places from friends. He likened Foursquare’s challenge to one Twitter initially faced: Many users wanted to see tweets but not necessarily post tweets, leading the company to focus on following activity instead.
Foursquare, which raised $41 million in April from Union Square and other backers, separately unveiled a new offering that lets users create infographics based on their check-in histories. Samsung is sponsoring the new Time Machine feature, with a Galaxy S4 branding appearing on the personalized heat maps of check-in activity. Whether the step will help Foursquare shed its image as a check-in app isn’t as clear.
During a half-hour discussion with The Wall Street Journal’s Spencer Ante, Wilson touched on a number of other mobile-related topics, including the NSA surveillance controversy, Tumblr, Twitter, mobile advertising and app development challenges.
In regard to recent news about the NSA’s collection of phone records and Internet monitoring, he said the impact might be felt especially by U.S.-based tech companies like Google, Facebook or Amazon. That in turn could lead people to look for other alternatives.
In relation to another portfolio company -- Tumblr -- Wilson said he thought the $1.1 billion acquisition by Yahoo was the right move for the social blogging service, largely because it was founder David Karp’s decision. The combination of Tumblr’s new native ad formats and Yahoo’s large sales force will help boost revenue growth.
Yahoo has previously acquired Wilson-backed startups, including GeoCities and Delicious.
The tech investor wasn’t so bullish on mobile advertising. “What’s going on today feels a lot like display in the early days of the Web,” said Wilson, with annoying banners popping up on the phone screen. He suggested that mobile ad formats, ad placement and targeting all need improvement. In Foursquare’s favor, he said the company has a service “that monetizes very easily,” and added that he was satisfied with its ad performance to date. The company had revenue of only $2 million last year.
For Twitter, Wilson said the biggest keys to its success have being the “follow” feature, public by default, and providing "open" instead of closed data. He pointed out that people don’t need to sign in to see; unlike "friending" a brand, "following a brand makes sense.” He also suggested that Twitter’s more open architecture had allowed it to bypass Facebook in becoming a key social TV platform.
Aside from rare blockbusters like Twitter, Wilson acknowledged that it’s vey difficult for new apps -- especially those outside the social, gaming or communication areas -- to get traction.
The number of Web apps that draw 25 million to 35 million visits each month is probably between 300 and 500, he noted. Compare that to the 900,000 apps available in the iTunes App Store and you get some idea of how difficult it is to break through. When it comes to mobile operating systems, Wilson said he didn’t see expect many developers to support a fourth platform -- in this case, Windows Phone -- because creating apps for iOS, Android, and the Web is hard enough.