The Blog of Burgher Jon

Foursquare opened up its API in January, and not much happened.  The only reason I can understand why is that Foursquare itself doesn’t quite have the audience to demand the best and the brightest’s time on app development.  It’s getting there though, and fast.  This lead me to start thinking about the market as well as poking around the API and I think there are a few holes that app developers can fill and a few tempting ideas that will never gain legs.  I spent yesterday’s post on three apps (or categories of apps) that I don’t think will take off.  Today, the good stuff.  The three concepts that I think will take off on the Foursquare API.

1. Meetup Apps that Focus on People Who are Already There – One of the apps that I said would fail was PocketCrowd, which allows you to specify where you’re going to be so that a group of people you already know can form there.  While I think this idea will fail, apps that make a crowd out of the dispersed individuals who are already at a particular place will takeoff.  Foursquare itself already does this for my friends, if I check in at PNC Park and then realize that one of my friends is at the game, I can meet up with her for a beer.  What foursquare doesn’t do natively, but an app could do is help like minded people who are already in the same place, meet for the first time.  It’s not a great leap of imagination to think dating is the best use case.  That’s where the app “Singles for Foursquare” comes in.  I’m aware that flirting with a girl on the phone while you’re at the SAME BAR SHE IS is a little retarded.  I’m not saying I’m going to use this app, but I am saying that enough people will to make apps in this space viable.Current Example: Singles for Foursquare, RunnersUnite! (by Pittsburgh’s own Dick’s Sporting Goods)
2. Scrapbooks/Analytics – One of the leading reasons people use check-in tools (as I previously discussed) is so that they know where they’ve been.  It creates a cool kind of automated life story.  There will be room for applications that help people piece together that story better then Foursquare itself does.  I see two kinds of applications in this space.  The first allows you to annotate your check-ins with photos and stories.  This type of app will supply you with the basics (the time you arrived, the friends who were there, etc…) but then expect you to build a scrapbook page or delete the record.  If you’re a guy and don’t believe this app will happen, check-out how many pictures your girlfriend has been tagged in on facebook.  The other app is a type of analytics, using Foursquares information to build maps and Feltron like reports.  If you’ve never seen the feltron reports, click here.Current Example: Couldn’t find a scrapbook, CheckoutCheckins.com is map overlay, Foursquare has a stats feature already that does the analytics (though it leaves room for improvement).
3. Recommendations – Another thing Foursquare does poorly (though you never know when they’ll correct this and steal your market) is surfacing recommendations.  My guess is that Foursquare will be doing this better (and mixing the user supplied recommendations with ads) soon.  In the mean time though, it’s difficult to see all the recommendations for places near my current location.  It’d also be cool if I only saw recommendations from people who were “like me” and within a radius that I define (am I willing to drive or does it have to be a walk?).Current Example: tipfinder

These are just my guesses based on a feel for social media.  Do I have any dissenters?

Foursquare opened up its API in January, and not much happened.  The only reason I can understand why is that Foursquare itself doesn’t quite have the audience to demand the best and the brightest’s time on app development.  It’s getting there though, and fast.  This lead me to start thinking about the market as well as poking around the API and I think there are a few holes that app developers can fill and a few tempting ideas that will never gain legs.  I’m going to spend this post discussing a few ideas that people are trying (or are likely to try) that I don’t think will work.  Tomorrow, I will post a few ideas that I think there is room in the Foursquare ecosystem for.

The three coming failures in an otherwise booming segment (location-based):

1. Foursquare clients – There are certainly some holes in the official client that would seem to make room for Foursquare’s own Seesmic.  I am betting against it though.  I have too much confidence in the guys at Foursquare, especially now that they are so well funded; I expect any momentary advantage a client gains over the Foursquare official clients is likely to be erased quickly.  Foursquare has too much to gain from advertising within its own client to allow another client to pass them up.

   Current Example: Kickball

2. Foursquare games – Even Foursquare itself is getting away from the concept of a game, why does anyone think that adding a more complex game on top will be successful?  There are companies that will fall for the alluring possibilities though, and they will fail.  I don’t think the game aspect of foursquare will ever catch on, not with their point system or anyone else’s interface.

   Current Example: fiddme (kind of)

3. Planning Tools – The beauty of Foursquare is the check-in concept, people can’t check-in until they’re there.  Don’t count on people using Foursquare for advanced planning, and “pre-checking in” to alert their friends where they will be.  Yes, they have a nice database of location data and that helps people plan, but there’s lots of location data on the web.  People will continue to use phones, email, texting, twitter etc… to plan meetups, Foursquare will remain for the spontaneous actions once you’re there.

   Current Example: PocketCrowd

These are just my guesses based on a feel for social media.  Do I have any dissenters?

I’ve had a couple questions on whether I saw the article in the Post-Gazette from Monday.  Yes, I have.  In the article P-G writer Erich Schwartzel paints a picture of a city that can spin up start-ups (he credits the universities and Innovation Works/AlphaLab for this, but then can’t hang on to those startups.  These firms escape to the “coasts” (predominantly the left one) to get funding.  Schwartzel mentions recent Kleiner Perkins portfolio company Lockerz as an example of a company that moved to be nearer to VC funding.

The article is, I think, a valuable read if you are not familiar with how tech companies mature, but love Pittsburgh and want to know about a problem that we are facing.  If you are familiar with the way technology companies mature, you may find much of the article painfully obvious.  I would humbly submit that a better place to start would be a few old posts on what makes up a startup ecosystem (posted below).  Once we have a better understanding of Pittsburgh’s startup ecosystem we can identify the things that we do well and publicize them / find companies that can leverage them.  It’s also from this position of understanding that we can identify the things we do poorly (which includes finding local growth-phase VCs) and focus on doing them better / luring companies that do them well to Pittsburgh.

• Recapping and Learning From the NYC Startup Ecosystem Debate – In late April / Early March there was a discussion amongst several bloggers in / around NYC about how the NYC startup ecosystem compared to the Silicon Valley system.  I took the opportunity of this post to look at WHAT people were arguing about and determine how an ecosystem could be evaluated.
• A Thesis on Creating a Startup Ecosystem Report Card – I proposed an actual report card for evaluating a startup ecosystem.  Someday when I have the time (or if someone else does I’d be happy to support it), I’d love to build a Wiki that kept track of Pittsburgh’s most valuable resources in each category and also a running score (driven by a public vote).  I think this would be valuable to the Pittsburgh ecosystem.  Realistically though, I won’t be in a position to do it for a while, since I am not presently spending most of my time in the Burgh.
• LA Startup Scene On the Move – This is a look at another non-Silicon Valley startup ecosystem that has been growing and maturing.  I (similarly to the NYC post) used the opportunity to look at what people consider important in an ecosystem.

My theoretical response to this question comes in two parts, first you need to look at the way people are using the internet and identify some of the obvious next steps.  Looking back to 2003, I would say there were at least two of these obvious next steps.  First, people would begin using the internet for personal email more (most people only had their school or work account).  Second, people would all have their own website.  I think these were pretty widely understood truths and, smelling potential profits, companies hurled themselves at them.   The first problem got solutions from Hotmail, Gmail, Yahoo! Mail and ISPs.  The second problem got solutions from Macromedia and Microsoft (Front Page).

The first problem got solved quickly, soon Hotmail and Gmail had exploded.  AOL opened up everyone’s old email addresses (I actually still have access to my Jonyisgood@AOL.com email, not that I ever check it) and everyone who wanted personal email had it.  The second problem, faced much stiffer odds.  I remember that in my college, they tried to teach everyone how to use Dreamweaver to create their own webpage.  The results were disastrous.  I’m pretty crappy at design and I can tell you that mine personally, was never going to be my face for the web.  It wasn’t the worst one though, and it was distanced from the worst ones by a long shot.  One thing was clear, too small a part of the world at the time had the knowledge and skill to create attractive websites.  Another problem facing this concept of the individual website was how to let others know that it existed and tell them when it was updated.  Most of these websites at my school got created for class and never touched again (not by the author or visitors).   There was no central catalog of all my friends’ websites and no standard way to read them quickly.

These difficulties made this second problem one with the potential to spawn a billion dollar company or two.  Why?  There was an obvious, logical truth about where the Internet needed to go and it was suffering from serious road blocks.  The rapid incremental innovations that were being applied to DreamWeaver and FrontPage were not enough to help/motivate people to go build their new sites (they only partly solved the need to know HTML and they didn’t solve the linking/updating/directory problem at all).  What the world needed was a disruptive innovation that solved the problems and made the obvious truth of personal websites a reality.

Friendster then MySpace then Facebook solved these problems with the disruptive innovation of a single website that allowed everyone to build their own page and neatly keep track of their friends.  While they (especially Facebook) have done much more since, the reason they grew in to giants was this concept.  My theory is that this shouldn’t have been surprising since there was a logical truth to what was coming next and they provided a solution.

One other thing that I think is critical to note in this space is that identifying billion dollar companies requires first looking at the truth you think will drive disruptive innovation then looking at EVERY new company through that lens.  If you were an investor who had identified personal webpages as one of those truths, you might have been rummaging through “web design tools” and not taken notice of this new University-Based service for keeping track of friends.  However, if you had taken the time to look closely you would have seen exactly the innovation you were looking for.

So that leads to the next logical question, what are the obvious, logical truths that are suffering from major road blocks?  I’m going to come back to this topic, but I’d love to see some thoughts in the comments.

Twitter announced today that they will be monetizing in another new way.  They have started the @earlybird account.  This account, will (for a small price) tweet about the time bound deals your company is offering.  The concept is pretty creative and should result in some serious revenue for Twitter, especially if they can get influential people to follow @earlybird and retweet the message to their followers.

I am sure the good folks at Twitter have done their research, but it does leave me a bit concerned.  The problem, as I see it, is that Twitter is monetizing on top of their platform rather then monetizing the platform itself.  If you’re monetizing on top of the platform you don’t really have a competitive advantage, unless you disallow competition (which they have).  Disallowing competition though, means that the platform won’t benefit from competition amongst ad providers, which in and of itself hurts the platform.  How much do you think Alexander Graham Bell made off the telephone?

So do I have an alternative?  I’m glad you asked.  What if they required all companies that serve commercials to use a particular hash tag or URL shortener.  Then you tax those per display.  In this manner you’re monetizing the platform itself rather than trying to monetize on top of it (and either losing competitive advantage or stifling the kind of competition that would be good for your platform).