Is Foursquare Dead?

Venture Beat doesn’t think so, and I’m not 100% sure they’re wrong.

But, before I discuss the article, a little background on why someone allergic to social media like me became a Foursquare nut.

A few years ago, a company called TopGuest came up with this concept where you could earn airline miles and hotel points for checking in at various places on Foursquare.

I can’t say I thought it was a terribly good business model, but they convinced a bunch of hotel chains to hand out miles for this.  And, it’s important to note for those not familiar with Foursquare, a “check-in” on Foursquare doesn’t mean you actually check-in at a hotel.  In fact, it doesn’t even require that you’re inside the actual hotel.  As long as your smartphone thought you were close enough, you could check-in on Foursquare and generally earn 50 hotel points.  Not a lot, but multiply by 3 or 4 chains and do it every day you start to have a little something.

Unsurprisingly, the hotels stopped participating after a while.  Whether it was because they never got any use from the data or figured out they weren’t actually gaining anything from the interactions is unclear.  But, along this path of earning miles, I actually started to have a bit of fun seeing how many points I was earning for check-ins as compared to my friends.  There were levels and badges, and I quickly maxed out the Jetsetter badge for visiting a lot of airports.

And, I started leaving some tips.  And using the app to find restaurant recommendations.  In short, I think Foursquare was getting some value from me as a customer.

Then, they made a drastic change.  They created a second app just for checking in, called Swarm.  The points you earned as compared to your friends?  Vanished.  And, now I had two apps for the same thing I used to have one for.  This made no sense.  Neither seemed to work well and all the info I actually cared about took a lot more work.

I thought I was the only one frustrated and then I started to look around a bit.  I wasn’t the only one.  There were a ton of folks complaining on social media (search Twitter for any combo of Foursquare, Swarm and fail).  Folks I knew were re-tweeting re-tweets of people furious with the changes.

I’m not what anyone would refer to as a “sticky” or “power” user of social media.  The increased friction of dealing with the new Swarm and Foursquare led to an almost immediate 90% reduction in the number of times I was willing to use the new apps.

Venture Beat doesn’t really agree with me.  While they acknowledge the initial displeasure, they contend that Foursquare was in a rapid free fall prior to their rebirth:

Now, a look back at the data makes it perfectly clear how dire Foursquare’s situation was, and how successful Foursquare’s new namesake app has been in reversing a frightening trend.

They reference a chart that shows a bunch of squiggly lines depicting Foursquare’s slow drop in the iOS charts and then back that up with a few hard numbers:

Now, let’s take a closer look at the most interesting part of that chart … the chaos on the far right: the day before Foursquare’s relaunch, the company ranked #1,221 overall among iOS apps in the U.S. The following day, Foursquare jumped to #457.

As of today, App Annie reports that Foursquare ranks #394 among all iOS apps in the U.S., and #18 among all iOS travel apps in the U.S.

They’re talking about downloads, and they also use that same metric to help characterize Foursquare’s new app, Swarm:

And now, Swarm: The app launched and rose to #62 overall in the U.S. on iOS in May. It quickly dropped off the charts, and then peaked late July to an incredibly high #11 among all top iOS apps in the U.S. The app did not reach similar heights following Foursquare’s relaunch, but still ranks far higher than Foursquare at #210 overall in the U.S. on iOS, and #24 among top social networking apps in the U.S.

Here’s my problem with using this metric for Swarm.  As an avid Foursquare user, they forced me to download Swarm if I wanted to check-in.  I got a screen when I logged into Foursquare that wouldn’t let me proceed until I downloaded the new app.  So, like the trained animal I am, I mashed the button.  And, I’m sure hundreds of thousands of other users did, too.  They essentially forced their user base to download a second app, so I wouldn’t characterize this as organic growth.

I’m also not duly impressed with the fact that Swam is ranked #24 among top social networking apps in the US.  Everyone who uses more than 5 social networking apps, raise your hand.

Heck, I’d be impressed if someone could name 10 social networking apps without using the internet as an aid.

Equally so, Foursquare’s rise in the charts might be somewhat self-induced, as I never volunteered to download the new app; it appeared as an update from Apple on my iTelephone.

Giving full credit, VB does go on to note that daily user stats would be a lot more helpful in determining their success:

It’s noteworthy, however, that app store download rates are only one among many metrics for understanding the popularity of an app. Daily active user stats, for example, would offer a clearer look at Foursquare’s relevancy. Reached by VentureBeat for comment, Foursquare refused to provide official daily active user stats.

VB posits that the real purpose here is to position Foursquare to compete with Yelp on offering travel advice.  And, that’s probably the appropriate goal.  But (and it’s a big but), that’s a lot harder to do when you alienate the user base who gave you all the information that helps you provide a service to customers.

The sky’s not falling just yet, as Foursquare was still able to raise $35 million in December despite showing meaningful growth in revenue (their founder says they have massive percentage growth, which is easy to do when you really aren’t generating any revenue).

But, it is quite possible Foursquare alienated a large swath of people that built the database of info they share with customers now.

I’m pretty sure they lost me.  How about you?