
After Years of Challenges, Foursquare Has Found Its Purpose, and Profits - bkudria
https://www.entrepreneur.com/article/290543
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adambratt
Foursquare honestly has some of the best user location data you can buy on the
market.

The only companies out there with better historical data are Facebook, Apple,
and Google. And as far as I know, I can't call them up and start buying from
them within a few weeks.

I've seen hedge funds right now making millions off of Foursquare's data as
they can build algorithms around it quite easily and there's plenty of history
to backtest off of. The great part is that Foursquare's previous money maker
was selling their places database so they've already done a great job mapping
GPS coordinates to businesses and it's pretty easy to map that further to a
ticker symbol. Perfect for quants.

By combining Foursquare data with anonymized credit card data from Intuit or
Yodlee... you've got the ability to predict retail sales on a DAILY basis
rather than on a quarterly basis. You might even be able to a better job than
that actual business in predicting their growth if you've got a whole team of
quants working on creating the data models.

This is the start of a shift from the market at large relying on quarterly
earnings for these types of companies and instead being able to track
performance on a daily level. As far as I can tell, there's nothing companies
can do to stop this either.

~~~
ChuckMcM
I was a bit surprised that the article didn't include 'Foursquare Hedge Fund'
as yet another way to make money. Seems like they could exploit their own data
just as easily.

~~~
manmal
Would this not count as a weak form of insider information?

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bradleyjg
No. Insider information has to ultimately come from an insider. Foursquare
isn't getting its information from companies, it is getting them from its
users.

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awa
What this article tells me is to not share data with foursquare since their
priority is to sell that data and make money and not to help me make decisions
on where should I be eating.

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foota
They're incentivized to produce a service that is used by people often. One
way of doing this is to provide value to the user.

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bgun
This. Ads track me while simultaneously taking value away. I am more than
happy to share some data while receiving some value in return.

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mi100hael
_> Foursquare is on the path to $100 million in revenue, and profits are
within sight for the first time._

Serious question: how is a software company that's bringing in $100MM a year
without any substantial overhead in terms of physical manufacturing or
shipping or similar real-world expenses _not_ profitable. As far as I can
tell, they'd have to have infrastructure costs well into the double digit
millions yearly and/or 450+ employees on payroll, neither of which is true as
far as I can tell (regardless of how prudent either would be for them).

~~~
SeoxyS
Let's do some quick napkin math. Foursquare has 286 employees[1], let's say
the average salary is $120k, representing ~$180k fully-loaded cost. And there
you already have a ~$51MM cost.

[1]:
[https://equidateinc.com/company/foursquare](https://equidateinc.com/company/foursquare)

~~~
orf
120k for each and every employee? And none of them mention they shouldn't be
spending $50,000,000 a year on... infrastructure (aws I'm assuming)?

~~~
SeoxyS
Probably a sales- and engineering- heavy team; many of whom will be earning
$150k+. Executives are probably making $300k+. This should bring up the
average salary at the company.

Also, this is just one line-item. There's a lot more expenses to running a
business. I wouldn't be surprised to see them close to $80M+ a year. The
article didn't exactly say their revenues were $100M, just that it was "well
on its way" there.

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rockarage
_" Looming large in this sector are Facebook and Google, each with its own
armies of engineers working to compete. Glueck shrugs off these threats: The
market is plenty big."_

What makes Glueck think Facebook and Google wants to share? They enter big
markets then attempt to dominate it, especially Facebook. Currently Facebook
gives no quarter. It will copy what you do well and go after your business
fiercely.

 _“Foursquare has signed deals with Snapchat to improve its geo-filtering.
More than one million users have agreed to leave location sharing on all the
time so Foursquare can track and analyze their movements”_

Facebook(Instagram) and Google have significantly more people using their apps
on location, the have more location data. Both companies do not have to buy
data/service from Snapchat. And what happens if Snapchat and Twitter decides
to enter the market?

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Grue3
That's pretty interesting, I thought they were dead for sure after "doing a
digg" by splitting off Swarm from the main app. How do they even collect data
if hardly anybody uses their app anymore?

~~~
bigethan
If you read the article, you'll see that they are buying Snapchat's location
data.

~~~
bruceb
Might want to reread it...

Snapchat is paying four square. That sentence in the article could be clearer,
is confusing.

[http://www.adweek.com/digital/snapchat-signs-data-deal-
fours...](http://www.adweek.com/digital/snapchat-signs-data-deal-foursquare-
better-targeted-geofilters-174627/)

~~~
revelation
That's a bold move, charging Snapchat for the privilege of selling out their
users.

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simonrey
You have to wonder whether all of this press is just a plug for an exit?

Additionally, how does the board of directors at Foursquare let this last for
8 years?

They raised a down round last year at a ~$300 million valuation and are
"aiming" to get to a $100 million to reach profitability (8 years later).

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coldcode
Interesting, but they are essentially building a profitable business on the
backs of people willing to be tracked (or checkin). You wonder how that can be
maintained.

~~~
jasonkostempski
This. There's no way a company that took 8 years to figure out that this is
literally the only way to make money on the internet will last.

~~~
rhizome
How do you figure?

~~~
jasonkostempski
I don't. I didn't read the article, I was bored and I thought parent was being
sarcastic saying "building a profitable business on the backs of people
willing to be tracked". Missing the key word "willing", I assumed it to be the
same business model of just about every internet company and Foursquare was
just now figuring this out. So I broke the rules and responded sarcastically
thinking this post wasn't going to get much attention anyway (it's about
Foursquare).

I've read it now and my comment makes little sense in context. I see they
stated some users "have agreed to leave location sharing on all the time so
Foursquare can track and analyze their movements." I'm not really sure how
this is any different than what they were doing 8 years ago so I do, non-
sarcastically, "wonder how that can be maintained".

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elvirs
i wonder if foursquare is creating this buzz to see if they can get a chance
to IPO and dump all their useless shares on clueless public?

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AndrewKemendo
Are they tying individual PII (name, UDID etc...) to the location data or are
they anonymizing it?

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AznHisoka
“Three of the top five hedge funds are using Foursquare data to give them an
investing edge.”

When you absolutely can't find a viable business model, the last resort is to
shrug, and see if you can sell your data to hedge funds.

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homero
I wish there's was a Zillow for businesses. I'm trying to buy a small business
but you never know if they're lying and sales are dying. And I'd buy it then
go out of business.

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jkern
What is Foursquare's mechanism for gathering this data?

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chaostheory
I wonder how much Foursquare pays for their PR firm? Worth the money for
articles like this =)

[http://www.paulgraham.com/submarine.html](http://www.paulgraham.com/submarine.html)

~~~
Dylan16807
They don't sell a product connected to the article so I don't really see the
comparison.

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chaostheory
They sell location analytics reporting and API access to their location data.
Both are mentioned and extolled in the article. Am I wrong?

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Dylan16807
That's not a consumer product. That's an enterprise service.

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chaostheory
It's still a product that being sold by the article. Submarine PR isn't
limited to consumer products.

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paulcole
I don't get why there are any more than 4-6 people needed to run Foursquare.

