A thing that was really nuts and unexpected is that the game stuff took off like crazy to the point that it was distracting. And we’re not going to shy away from it. That was our bread and butter. People want to use it for the game. We’re getting all this data. And we’re crowdsourcing a map of the world. We’re learning where people go. We’ve got massive user numbers. We’re raising money off that. We’re building a huge data science team.
We figured out we’re not a social media company. We are a technology company. We are a data company. Back when big data was fashionable, we were one of the companies like we are a big data city guide. That’s what we are. We never use that term anymore. But that really, I think, summed up what it was for that particular moment in time.
But no matter what we did, we couldn’t shake people of the game mechanics. And you always had this thing where people like, “I don’t want to check into places. I’m not going to check in, it’s not for me.” But no, the whole thing is a city guide, the check in is the smoke-and-mirror’s part of it.
That was Dennis Crowley talking about Foursquare, his beloved social media app and location-based game that was hugely popular in the early 2010s. Except as you just heard, the thing everyone loved wasn’t the thing he was actually trying to build. Are you ready to hear the story? Let’s get dialed in.
Hi, welcome to Web Masters. It’s your favorite entrepreneurship and startup podcast, the one where we learn how to be better entrepreneurs by hearing what I like to think of as war stories from some of the internet’s most successful and impactful innovators.
I’m your host, Aaron Dinin. I’m a serial entrepreneur and I teach entrepreneurship at Duke University. On this episode, we’re going to dig into the story of Foursquare, a company I feel like most of you listening would have probably heard of. But what’s fascinating about the Foursquare’s story, is that what the company actually does and what people think it does are two very different things.
And well, sometimes that’s how stuff works in the entrepreneurial world. In order to get consumers doing more of what you need, you’ve got to give them something else they want. It’s called gamification and it was a huge part of Foursquare’s success. We’re going to talk all about why and how. But first, I’m going to take a quick minute to talk about our sponsor.
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When most people think of Foursquare, they think of that phone app where you check into places, earn badges, become mayor, climb up the leaderboard, and those kinds of things. And that’s fine. It’s actually what the company wanted people thinking about back when it launched in 2009. However, that was never the company Dennis Crowley, Foursquare’s founder, was ever interested in building. Instead, Dennis was interested in a much more interesting problem here. I’ll let him tell you all about it.
I had never lived in a big city and went down to New York City. And I was overwhelmed with people, places and things to do. And just like there’s a better way to manage all this. I used to spend my nights trying to like, okay, I have my friends from Syracuse and then I know these people that live across the hall from me in my new apartment, and my friends from Jupiter like how do you connect all of them in one night?
As a recent post college grad would do. And it was inefficient. We should be able to make something that’s better than that. Cities are fascinating. I think living in New York … I’ve been in New York since 1998 so it’s 23-24 years and raised my kids here. I want to live in a city. I love cities. And in grad school, I got exposed to people that were urban planners for the first time, people that had studied cities, and people that were very thoughtful about … so this is the first time I read any Jane Jacobs or Kevin Lynch or any of that stuff.
And the Venn diagram of what technology can do, what cities are, and the opportunity to change the way that people experience cities, that’s my wheelhouse. And so, this comes up a bunch. I always get pegged as the location technology guy even post-Foursquare. “What are you doing? You’re doing another location technology startup?” I’m like, “That’s not what I do. I build things that bring people together in urban spaces.”
And sometimes you need to know about where places are to do that. And sometimes you have to build 10 years of a technology stack in order to solve that problem. But the crux of what I’ve been trying to do is software that brings people together to have more interesting experiences to change the way they experience the world around them.
Bringing people together in urban spaces, helping change the way people experience the world around them, those are the kinds of things Dennis cared about and still cares about. How do you do that? Well, it’s not an easy problem to solve. In fact, it’s a problem Dennis began grappling with long before he launched Foursquare. It all started when he was first exposed to the internet and World Wide Web and began wondering how they might change the world.
I can remember sitting at the kitchen table at my parent’s house and I can vaguely remember the layout of the page with a big picture of Marc Andreessen on it in the business section of the Boston Globe. And I knew there was something really interesting here because I had spent a lot of time on Prodigy and AOL. And I was going to say what is called Delphi which I could get you into the news net services.
And I knew enough to be like, “There’s really cool stuff I just don’t have access to.” And I think I might have subscribed to WIRED at that point. So I was seeing through the pages of the magazine like this is a whole other world of stuff that I just can’t get my hands on. That’s a really interesting time. And I was consuming as many books as I could. I mean, it would be five books a year published about the internet. So I’ll consume all five of them or whatever.
The early Steven Levy books and the Nicholas Negroponte being digital book, and Bill Gates’ Road Ahead, all that stuff had shaped my perception of what the future would look like and what you would be able to do. And I think that’s like the base level of DNA that created all the stuff I ended up working on.
And when did you start actively experimenting with the web in creating stuff on it?
I was really into publishing which is one of the reasons I went to Syracuse because they have a good communication school there. I like making fanzines and writing articles and stuff on Prodigy and super nerd high school stuff. And when I got to college, I abandoned some stuff. I was like, “I’m going to write a magazine about videogames,” but it turned into a way to tell stories about what we were doing in college.
We would go out and we would have a disposable camera, not a digital one, disposable camera, take photos of the weekend. Develop them, scan them. And then, put them on the web and be like, “Hey, this is what we did. This is pretty cool.” It was scrapbooking, basically. I was telling the story of what we’re doing to my high school friends that are at different schools at the time.
And then, meeting people on the internet that were doing the same thing, Justin’s Links from the underground. I mean, there was a very, very small group of people that were doing this stuff at the time. And you’re just like storytelling on the internet for an audience of who knows how many, but it just felt like this is the thing to do.
By the way, if you were listening closely, you heard Dennis referenced Justin’s Links from the Underground, that would be Justin Hall, creator of Links.net and the man often credited as being, if not the first, then one of the very first personal bloggers and online content creators. We actually talked with Justin in Web Masters Episode Number 31. Check it out if you haven’t already.
It’s interesting to know that Justin’s work documenting his life online helped inspire Dennis who himself got started online by, well, documenting his life in the exploits and activities of his college buddies. It was this social community building and sharing that ultimately laid the foundation for what would become Foursquare, though there were lots of important steps and missteps along the way between community building as a college kid and building a multibillion-dollar location-mapping company.
So, let’s learn about some of those, shall we?
My freshman year, I lived in a dorm that you couldn’t get internet in your rooms so you had to go down to the computer cluster. It’s just like a room that has computers in it with no windows. And then the second year, my roommate and I, we chose our dorm based upon which one had high speed internet. And it’s like, “We’re going to need to be in this dorm. We’re going to need to be on the first floor. This room is the best room,” whatever.
And we had one of those web cameras. I got Logitech QuickCam. And we would get our friends together and do live streams of us playing quarters like drinking games and stuff, so stupid. But that’s just what you did. No one’s done this before. We should totally do this, just really dumb experimental stuff. You felt like you were pushing the boundaries of things at the time.
So how’d you go from fooling around with your buddies on the internet to building an internet company? What motivated you or I guess excited you enough to make a career out of this nascent web-thingy?
Yes. Well, so the first four years of I guess the internet because I think I started college around year one of the web browser, ’94. And so the time I graduated ’98, there was internet advertising agencies, episodic web serial stuff, people pushing the edge of what you could do with like QuickTime VR. I don’t know if you remember that format, but it was like Google Street View but on a CD-ROM.
And just lots of really interesting stuff. I used to subscribe to The Wall Street Journal at the time because it was the only coverage on what was going on in the internet. And all of the stuff was happening in New York. And so I wanted to get down to New York. And every time I read an article, I had a quote from these analysts that work at this company called Jupiter Communication. And I was like, “I got to go to this company. All these articles mentioned all the smart people that work there. I got to go to this place and work with these smart people.”
So I didn’t want to go to a startup. And it wasn’t like a product I was chasing. It was just like, “Where are the smartest people?” So I lobbied and lobbied and lobbied. I eventually got a job at this company making slides. But that was my first entrance to any tech scene, the New York tech scene. And this company Jupiter was right in the epicenter of the whole thing. I got to meet all the analysts and hang out with all them. There was a pool of young researchers underneath all of them. And I was part of that pod.
And our job was just to meet with the people that were making these companies. And by these companies, I mean like all of the companies, the search engines, the music companies, the streaming companies, the technology companies, and customer service companies, catalogs going online. Anyone that was doing anything of the internet wanted to come to Jupiter and pitch the analyst.
And so, we sat in on all those meetings for two years. And it was super exciting. And you get that sense of like some of these people are way ahead of their time, some of these people are full of shit, some of the stuff is super interesting, some of the stuff is never going to work. We were right in the middle of it. You could not be any more right in the middle of it. And it was amazing.
What kinds of things were you seeing at Jupiter research that were most exciting to you?
While I was there, this company came out, it’s called VindoGo. And VindoGo was making city guides for PalmPilots. PalmPilots is like a cell phone that doesn’t work. But back then, it was like a magical device that came down from the heavens and had a little stylus and stuff. They had crammed every bar and restaurant in New York City into this little device that you would carry with you.
And I was like, “This thing, that is a thing,” because I like to go out. My friends like to go out. I got to work at this company.
But you weren’t really a tech person at that point, right? So, how were you going to get yourself into a tech company?
I was starting to tinker on the side with building my own stuff. I had an idea for my own city guide. We should have a city guide where anyone can add any place and anyone can write a review, radical idea at the time. And New York was evolving so quickly. And every week, there was another street that was safe to go down, another neighborhood that was interesting to explore. It was changing so quickly.
And the products that people were building, the city guide products that people were building for New York, they weren’t based in New York. They’re based in Seattle or wherever. Someone should make one of these things in New York for New Yorkers and I was tinkering on that. That was a project that I used to teach myself how to make webpages. I mean, because I knew how to do HTML but I didn’t know how to program anything.
And so, after having a lot of these ideas for things I wanted to do, there was a guy at work that had one of those like Learn How to Do This in 30 Days books on his desk in a big red cover. It was like this thick. And I’m just going to come in on the weekend and just start burning through this guy’s book and learn how to do this.
And so, I taught myself how to hack basic database-driven webpages together so I could make this city guide which I did and I love this. It’s fun. I had a lot of friends that were using it. But then, that thing was able to get me a job at that company called VindiGo which is my first real experience. It’s a tech company. There’s 30 people here. There’s stock options. There’s parties. It was awesome.
Okay. So, it sounds like you’re at one of those stereotypical late ’90s tech boom startups and, of course, all the mess that came with those things. How did that end up working out for you?
It was maybe the most transformative job I’ve ever had, although I only was there for one year because I got laid off, one year into it. And then, when I got laid off, I was rather devastated. It’s making pretty good money and the job I wanted to have, with the product I wanted to do. I was super inspired by … VindiGo was a company that I got bit by the product bug.
I would go out to bars and restaurants. I would see people using the product in the booth next to me on the PalmPilot with the blue light and they were using our software, the thing that I was working on during the day. And I was like, “That’s it. I want to make the things that people use when they go out.”
Anyway, so we got laid off from VindiGo. I still had some friends at Jupiter. They all got laid off. Dot com, heydays are over. Things are crashing. Pretty much, everyone is laid off. No one has any jobs, like more friends without jobs than with jobs. And people are just bumming around during the day.
So that’s when I took the Dodgeball database that I had, database of places in New York, and basic infrastructure for pulling up on webpages. And I had a really crappy sprint phone that had the wireless web. I might have paid an extra $9 a month for the wireless web which means you’d get four lines of text, internet on your phone.
And so I hacked together this interface that was like, “Hey, you could go out.” If you went somewhere, you’d say, “I am here,” and it would send a message out to all of your friends like, “Oh, I’m at this bar watching the Yankees game.” And 10 of your friends would get the message. And then, what would often happen because no one was getting any notifications on their phone at all, if you’d got one, you’d be like, “Oh, Dennis is doing something, I guess I’ll go meet him.” And people just did that. And that’s how my whole group of friends just started organizing and meeting up for that whole summer of 2001.
You may have noticed Dennis used the phrase Dodgeball to refer to the database and rudimentary app he built for himself and his friends in order to help them meet up around town. That was actually the origin story of Dennis’s first success in the location-based app company space. It was a company called Dodgeball. Dennis and his cofounder Alex Rainert began growing it in earnest while graduate students at NYU.
It was a bit ahead of its time, but it managed to cultivate a decent size and devoted following while laying the foundation for much of what Foursquare would eventually become.
I applied to grad schools and I decided to go back to NYU. And NYU had this weird program. It’s called ITP. It’s like a technology research lab that is in the art school. So it’s just like this weird mix of stuff. I was 25 years old at the time and my 25-year-old crisis. I’m like, “I really should go to business school, but I don’t want to go to business school. I can’t even get through the application because it’s so disinteresting to me. But this art school, this is interesting but I’m not an artist. I have no business going here.”
But I went there. And on day one, I met this guy named Alex. And he was an ex-Razorfish designer in a Razorfish, the studio.
Razorfish, by the way, was the notorious New York-based internet design firm that built an outsized reputation for itself in the late ’90s. We heard all about it back in Web Masters Episode Number 12 featuring Razorfish cofounder Craig Kanarick. When you’re done with this episode, don’t forget to check that one out, too. It’s one of my favorites.
We just hit it off. And we decided just to start working on projects. And we started working. We built a whole bunch of random stuff together. And the second year of ITP, it’s like, “Hey, you want to dust off that all Dodgeball code from years ago,” because Friendster had just come out. And it’s like, “We can say it’s like Friendster but for cell phones.” I was like, “Yeah, that’s a cool project. Let’s do it.”
Since I’m busy plugging old Web Masters episodes, I might as well add in here that we’ve also got a great one about Friendster with founder Jonathan Abrams, that’s Web Masters Episode Number 18 which I think you’ll also enjoy listening to.
And so, we dusted it off. It used to be Microsoft ASP, rewrote it in PHP with MySQL, and did an independent study at NYU to get credit for it. And we built this thing. It turns into our thesis project and it was starting to get some steam. At the time, technology blogging was a thing. And so, Gizmodo and Gadget would write about things.
And then, the New York Times would be like, “Oh, Gadget wrote about that thing, we should write about that thing.” And Newsweek would say, “Well, the New York Times just wrote about it, we should write about it.” So before you know it, a little thesis project is getting these huge write-ups and magazines and newspapers. And my cofounder Alex and I have this epiphany of like, “Maybe we shouldn’t get jobs after graduating, maybe we should work on this. Maybe this is our job.”
So we gave ourselves six months to just hack away, eating pizza and ramen every day and working out of the computer lab at NYU just because it was like free office space. They were cool enough to let us camp there. And about a year after we graduated, we happen to be at the right place at the right time pitching Dodgeball at a university conference. We meet some people from Google. They invite us to go to the Google offices.
While we’re at Google showing this thing off, “Oh, pitch to this person, then this person, this person and this person,” And before we know, we’ve showed it to 100 people at Google in an afternoon. And then Google’s like, “Hey, we want to bring your project here. We want to buy you guys.” We’re like, “Yeah, that sounds great because we are two totally broke grad students. We would love that opportunity.”
So, since most people haven’t really heard of Dodgeball but they’ve heard of Foursquare, we can guess how that acquisition went. But still, would you mind telling your story of trying to build Dodgeball inside of Google? What was that like?
So, we went to Google for two years. And we were trying to build mobile and social and location technologies all in the same group. All this stuff was just being formed while we were there. And it’s a really crazy time. And we didn’t get as much done as we want it to get done at Google. And so, we were there about two years and we ended up leaving. We think we had the philosophy that we needed to really get stuff done.
I know Google eventually shut down Dodgeball, but are there any fun stories from your time at Google that are worth sharing? I mean, I’m sure that must have been, the very least, an interesting experience, right?
We were at the dodgeball office in Google New York right after we got acquired. Sergey came by on his rollerblades. He was rollerblading through the office. And he stopped by and he peered his head in. And he’s like, “Snowball.” And we’re like, “What?” He’s like, “Yes, this is the snowball, guys, right?” And like, “Dodgeball?” And he’s like, “Oh, yeah.” And we’re like, “You’re Sergey, right?” He’s like, “Yeah.” He was like, “Keep up the good work.” And we’re like, “All right, man.” He skated away. Alex and I were like, “What the hell was going on? That’s super, super weird.”
That’s incredible. I’m not sure I’ll ever be able to get that visual out of my head of Sergey Brin skating by on rollerblades at the Google office. Okay. So, I guess I’m curious and maybe trying to find out a bit more about this. I’ve heard other founders that I’ve spoken with on this show actually directly referenced Dodgeball as the reason they decided not to accept an acquisition offer.
Google buying Dodgeball seems to be this sort of I guess you’d say cautionary tale for entrepreneurs. Any chance you can maybe shed some light on that?
That came up in one of the early Facebook books, too, where they were going to sell to Yahoo. And they’re like, “Oh, the Dodgeball guys had a crappy experience at Google.” When we left Google, we were really just frustrated. Man, this was the ticket. We were going to make this thing and it’s going to be huge. And meanwhile, we sat at the Google office and watched Twitter take off and Facebook take off. And so, we were just disappointed.
And so when we left, we took a picture of me and Alex just for posterity’s take of us with the thumbs down outside of our office at Google. And I posted it on Flickr. And I said, “We left Google today.” And I wrote something short and a little nasty and in hindsight, honestly, a little obnoxious. Just about like, “It didn’t work out. We escaped. On to the next thing. We’re going to have a party this week. Come to our party.” And that was it.
But that changed a lot. The word acquihire apparently came out of that. I later learned like, “Oh, two guys doing something interesting, but not really a company. It’s called an acquihire.” I mean, I only learned that six years ago, that term was born after the Dodgeball deal. And just that one paragraph of text and maybe the stories that we had told over beers to people had changed the way that people thought about selling their companies to bigger companies and led a lot of people to stay independent.
I mean, that might have been the biggest thing I’ve ever done, putting that stupid thing on Flickr. Never mind 12 or 15 years of pain and struggle and hustle like Foursquare. Life is weird like that.
I can’t tell how many people in the 20-year journey I’ve had of doing this had been like, “Oh, I remember that photo. It changed the way I thought of it.” That’s nuts, but people always remember it as us flipping people off. And it was a thumbs-down. So, when I left Foursquare and I did my blog post about leaving Foursquare, I purposely went to the Foursquare office with my baby in the stroller and I waved hello like not thumbs-down, not thumbs-up, just hello. Just as a nod to that old photo on Flickr, but I had a weird story.
For the record, I went and tracked down Dennis’s old Flickr posted. It really doesn’t seem too obnoxious. He and Alex are standing in front of what I’m guessing is the old Dodgeball office inside of Google’s New York headquarters. And they’re both flashing exaggerated sad faces and the thumbs-down sign.
The caption reads, “It’s no real secret that Google wasn’t supporting Dodgeball the way we expected. The whole experience was incredibly frustrating for us, especially as we couldn’t convince them that Dodgeball was worth engineering resources, leaving us to watch as other startups got to innovate in the mobile plus social space. And while it was a tough decision and really disappointing to walk away from Dodgeball, I’m actually looking forward to getting to work on other projects again.” And that’s pretty much the end of the quote.
Then there’s some additional stuff about what companies they’re moving to next. And as Dennis mentioned, he has a few words inviting people to their “escape party,” still nothing too bad at least not in retrospect. Regardless, Dennis left Google and pretty soon started working on his next big project.
A couple of months after we left, Google announced that they were going to turn the project off, the Dodgeball project off. And when they turned it off, we said, “Well, if they’re going to turn it off, they don’t want it. Let’s just build it again.” The world is different now. The iPhone just came out. People know how to use social networks. People know how to download apps.
We can do this same thing again just through the lens of a lot of hindsight. And with a lot of insight also from knowing what was interesting and what was becoming interesting about this project while we’re at Google. And we started Foursquare and started tinkering late 2008, started in 2009. And then from there, it’s just up into the right all day long and just getting now from there. The company we’ve been building for 12 or 13 years, we’ve taken every left and right turn we could possibly take.
But we’re doing well. We’re profitable. Good things in the future for us. We got a board meeting tomorrow I’m excited about. And as one does, I just glossed over a decade of what we did at Foursquare, but happy to answer more specific questions.
Sure. Good. Okay. I got lots. Let’s start with how do you see the relationship between what you were trying to do with Dodgeball and then what you started building with Foursquare?
The crux of what I’ve been trying to do is software that brings people together to have more interesting experiences to change the way that they experience the world around them. And I think Dodgeball started scratching the surface of what you could do. And then Foursquare, I think took that to a whole different level because with 50 or 60 million people using it at one point. And then, what Foursquare eventually turned into, especially now, we call ourselves the location layer of the internet.
We know about every single place on the planet. We know how phones move in and out of those places. We have a whole community of Wikipedia-esque editors that are in there cleaning the database and updating things for us. We run geospatial analytics so we can understand the ebb and flow of traffic in and out of different retail places, different neighborhoods. Ironically, we build the tools that we needed when we were grad students.
It was really hard to build Dodgeball. It’s really hard to build Foursquare. We had to make a lot of stuff from scratch. No one had made a venue database that you could easily access and could easily update. And as soon as we started making this stuff at Foursquare, it was like, “Just put an API on it. Let’s just make it so no one ever has to recreate the wheel again because we’ve already done this twice. So let’s just be done with it.”
And that ethos that we’ve had at Foursquare is I take everything that we’re doing and make it available to developers so they don’t have to do the same work that we’ve done. That’s become what the company is today from the analytics and venue database and developer tools’ point of view.
So this is interesting because you’re not really describing Foursquare at all in the way I feel like people think about it. People think about it as social media or this check-in app/game. But you’re talking about something that almost sounds like a completely different company.
I love this… because the conversation does usually go here. So, when we were at Google, the core insight that we had was we were a toy. We are a toy to help people go out and get drinks with their buddies. And I would be at my desk running these queries, the database queries on my sequel like, “Show me all the places in the East Village that people go on Saturday morning between 11:00 and 2:00 p.m. Rank them by popularity. Add a filter to the ones that my friends have been to. Add a filter to the ones that I haven’t been to.”
And suddenly, you get this list of the best and most popular brunch places that are on the rise that my friends had been to that I haven’t been to yet. And I would run that query. And I was like, “This is what I’m doing tomorrow.” And then, I’d run into my friends like, “Here’s what you do this weekend.” And I sit there. I mean, this is obviously the thing. And so, how do you just do this at scale.
The problem with Dodgeball is that you couldn’t get people to use it unless they had 50 friends that they needed to meet up with for a beer every single night. It just wasn’t in the DNA of the product. So, we went to create Foursquare. Foursquare was like another Dodgeball, a smarter Dodgeball. It was like, “Well, what are we going to do?” “Well, first of all, it’s got to be more than just bars. It’s got to be restaurants and convenience stores and gas stations. Any place.”
Well, how are you going to get people to check in there? What are they going to do? No one’s going to come and meet someone at a gas station or a bookstore? Well, let’s make a game out of it. All right, well, what kind of games you want to make? I don’t know what’s going to work. Let’s pick three games. Let’s pick a one-player game that you can play by yourself. Badges, click all the badges. Let’s make a two-player game that you can play against strangers, become the mayor of a place.
Let’s invent a two-player game that you can play against your friends. The leaderboard, who got the most points for going out on a Saturday night? One of those things has to work. Put all three in the app. Well, what if I don’t care about checking in? Well, let’s put the city guide in it as well and we’ll let people leave tips behind of the best things that they found. And every time you go to a place and you check in, we’ll pop up a tip that says the best thing that you should get here is the Eggs Benedict or nothing is good here, leave and go across the street and get the bourbon old fashioned.
So, turn it into a city guide that pushes things at people. Instead of like, “I don’t know, let me search for something.” Anytime you did something, it would push you to do something else. And we didn’t want Foursquare to be a game. It wasn’t supposed to be social media that you’re going to do it with your friends. This is what you do. But it was a city guide. It was a smart city guide built off of data.
That wasn’t how people saw it. How did you feel about the public perception of Foursquare versus what you were trying to build?
We were never able to get in front of that or really push that to the side. And really, we struggled with that for years. And it was ultimately one of the things that led us to split the app in two pieces. One piece for checking and there’s one piece for city guides. Because you get to the point where you’re growing a million users a month, you got 50 million people that have downloaded the thing.
And you talk to the newest person that signed up because they heard about it on the Rachael Ray Show. And it’s like, “Okay, let’s do a user interview with this person. What is this thing?” It’s like, “Oh, I check in and I get a coupon for Dunkin Donuts.” Yes but no. You use the thing and it will teach you about all the amazing things that are in your neighborhood so that you don’t go to Dunkin Donuts, you go to the Indy coffee shop that’s down that street that you never been to before.” That’s what it was supposed to do. But we never really got there. We did, but not for everyone.
You heard Dennis referenced splitting the app into two pieces. Foursquare launched a companion app, it’s called Swarm, S-W-A-R-M. The company moved all of Foursquare’s more publicly-recognizable social media and location-sharing aspects over to Swarm effectively creating two completely different services, Foursquare and Swarm.
At the time, the launch of Swarm was a widely publicized and often maligned move. And I’m sure it cost Foursquare, the bigger company some of its users. But really, it helped them move to the successful company they are today which isn’t quite what Dennis had set out to accomplish. But I’d say it’s still pretty impressive nonetheless.
You have this realization after you raise all this money and you’ve built this big company, 10, 20, 30, 50 million users, it’s a lot of people, but it’s not a billion users, it’s not 100 million users. And let’s say 10 or 15% of them are in the US which is the monetizable audience. It was really tough to build an advertising business off that would sustain the company. So then it’s like, “Okay, we got to find other revenue streams.”
And once you started down the road of finding other revenue streams which is great, it’s the reason the company is here and thriving and doing great, but it also pulls resources away from all the other things we wanted to do. So I feel like we flew really, really close to the sun in terms of like, “Oh, my gosh, we have almost solved this problem.” But then we pulled ourselves away from it because we ran out of time to invent the future of consumer experiences. And we had to dedicate our time to this is going to be a profitable business that makes these things and grows and can sustain itself.
Again, that sentence glosses over five or six years of just angst and agony and drama and sleepless nights at Foursquare. But that was hard to even remember all the madness that’s right in the middle of it all.
Okay. So, let’s talk about this. What did Foursquare evolved into and how did we get here?
Around 2011, we’re growing by a million users a month which is something we never thought would happen. One of our investor is like, “When will you hit a million users?” I’m like, “This thing will never hit a million users in each product.” And then eight months later, it’s a million users a month and you’re just trying to keep up with it because everything is broken every day. The tech stuff is broken. The database is broken.
The company is broken because you added another 10 people to it. Everything is broken. You’re just trying to keep up with it. Anyway, so we’re like, “Listen, this is not going to last forever where people are taking out their phones and spending 15 or 20 seconds to check into a bagel place or a gas station. This is not going to happen.” What we need to do is we need to make a check-in button that you don’t have to press. And that was the thing I rallied the company around in 2010. Like, “Listen, we did this thing. It’s great, a lot of attention on us.”
Okay. Next thing, the check-in button, you don’t have to press. How does that even work? That means it is a piece of software that’s running in the background, you can’t do that. It’s impossible. It has to have access to the GPS and the cell signals, impossible. We can’t do any of that stuff. It’s going to happen. It has to happen. How do we get to work on it?
So, how do you end up making all of that work? It sounds almost magical.
Around 2011, iPhone 4S comes out with iOS 5 background processes, geo-fencing. And the stuff that Apple had built into the OS, we thought was going to be like, “Oh, this is it. This is the stuff that we needed.” And when we got and looked under the hood, it’s not. Apple had built something to help you get the milk when you went to the one supermarket within 20 miles, not the thing that can trigger an alert when you walk by the best tissue place and there’s an amazing whiskey place right next door to it. It was never going to work in New York City.
The pieces are there to make this. They’re baked into the hardware and they’re baked into the OS. We just have to build a better version of what Apple made. And so that’s when we started working on this thing which was eventually called Pilgrim. And Pilgrim is Foursquare’s engine. It’s context aware, snap to place engine. That you put this piece of code in the Foursquare app, in the Swarm app, in a third-party app.
And as you walk around and as the phone stops or slows, it starts to figure out like, “Oh, I know this place. Oh, I’m inside of Foot Locker. Oh, I know this place. I’m inside of a Dunkin Donuts. I’m in the best sushi restaurant in all Greenwich Village.” And once you’ve given the device, this contextual awareness of like, “I know where I am. Have I ever been here before? Is this place any good? Should I go someplace else? Is anyone else nearby? What’s the best thing on the menu?” You can offer all these services on top of it. And so, we spent years and years building this thing. And it probably took us good three years to get it working.
And why is it called Pilgrim?
The reason it’s called Pilgrim is a joke was like we’re on this religious pilgrimage. We’re either going to get this thing working or we’re going to tank the company trying. We used to hire interns just to give them a phone and a backpack full of water. And it’s like, “Welcome to the internship. Go walk around the city aimlessly. Write down the places you go to and we’ll compare notes with what the phone thinks you did.” And people were like, “This is (beep) internship I’ve ever had.” It’s like, “We’ll see you in a little bit, thank you.” But that’s the brute force testing we were doing to tune this thing and get it working.
When did you feel like you’ve finally got it? When did you feel like you’ve actually built this thing you’d been pushing so hard toward?
I think it was August 2013 where I went out one day for a coffee. And every day, a developer would give me … we call them like a virgin android phone, had nothing on it, had no check-ins, just like another prototype. Go walk around. See if it does anything and you take the thing and, of course, it doesn’t work. But this one day, I went into the coffee shop. And as I step in, the Android phone lights up and it’s like, “Oh, you’re at the little cupcake bakeshop. You should pay attention to the Oreo Cheesecake, the such and such.”
And then it said, “The Dreaming Princess.” And I was like, “Dreaming Princess, what the hell is a Dreaming Princess?” It’s pulling these nouns out of the Foursquare database. I’ve been in this coffee shop a hundred times and I go into the display case looking around, looking around, looking. I’m like, “There’s a cake called Dreaming princess.” And it feels like this moment in Legend of Zelda. So I go and I buy the cake. It’s $6 a slice of cake.
I bring it back to the office and I get seven forks because I have an exec meeting. And I bring this people cake. And I bring them forks. And it was, “That cake is delicious. Where did you get this cake?” Like, “I just went out and Foursquare told me to go into this place to buy the cake. The thing freaking works.” And the cake was pretty delicious. But that’s the origin story of this thing working.
Once you had it working, then what? How did that change the trajectory of the company going forward?
It wasn’t supposed to work. No one ever knew if it would work, if it was even possible to do. Because it’s one of these things where it’s like Foursquare has no business solving this problem, Apple will do it, Facebook will do it, Google will do it. But they couldn’t because they didn’t have people 10 billion times saying, “I’m at the grocery store. I’m at the gas station. I’m at the fried chicken place.” People checking in to train the system and teach you the map of the world and where all the Wi-Fi spots were, and the Bluetooth spots, and the GSM radios, and just basically drawing a map that was meant to be read by cell phone sensors instead of human eyes.
It’s a totally wackadoo-looking map. But we made that thing. We were, in hindsight, destined to solve it because of all the stuff that we had built leading up to that. And once that stuff worked, it changed everything we could do from an analytics point of view, from an advertising point of view, from a consumer app point of view. And just give us a lot more flexibility to be creative I think, and creative in a lot of different ways like a business and enterprise perspective, too.
So Foursquare, the company today really isn’t at all the popular consumer app of the early 2010s, right? So, what is Foursquare now? How’s it operating? Where’s it getting all its data from? How’s it making money, those kinds of things?
Yeah, the consumer apps are still there and kicking. I don’t know what the usage numbers are on them. But it’s considerably lower than it was in its heyday. But the company has enough connections with other third-party apps that we’re ingesting data all the time about where phones are, what phones are doing. And then, it’s anonymized and aggregated for privacy purposes obviously. But then, we can ingest that data and use that to fine tune our map of the world, which is already pretty well fine-tuned.
And then, we have layers of different technology offerings whether it’s for marketing or developers or analytics. Or we’ve done partnerships with hedge funds that want to take a look at the data like, “Hey, are there more people going into these stores this quarter than last quarter, this week than last week?” We’ve famously done things. Even years ago, it’s like, “Let’s predict how many iPhones were sold on opening day based on how many people went into the Apple store?”
We did one with Chipotle years ago. We started getting really creative about the things that we could do. And instead of us having to sell badges to TV shows like, “Hey, got the Jersey Shore badges with your check-in.” That was awesome in 2010. And these days, it’s more like, “Do a big technology and data licensing deal with the Twitter, Uber, Samsung, Apple to help power or enhance that location offerings, either in the US or other parts of the world.”
What does that meant for you? What’s it been like going from running this massively popular consumer-focused company to what basically sounds much more like a B2B enterprise business? I mean, those are two very different types of companies.
Great question. So, I was CEO of Foursquare for six years. And then around the time where we really needed to focus on the B2b side of things, that’s when I decided to transition myself out of the CEO role and I hired a CEO. He was my right-hand man for a year. And then I put him in the CEO role. And then the thing was like, listen, I wake up every day thinking about what’s the craziest thing that you could make for a consumer app.
Like Foursquare doesn’t need that CEO anymore. Foursquare needs a person that wakes up every morning and they’re like, “How do we sell this to a Fortune 500 company? How do we sell these products and service offerings? So, I get this totally different mindset. So, it’s like bittersweet because I love building stuff. Going back to the beginning of story, seeing people use VindiGo when I was 25 at a restaurant and being like, “I wrote that software. I worked on that software, I contributed to that.” That’s the thing that gets me excited, the software that ultimately brings people together.
And for a long time, that was Foursquare. You would just sit in a movie theater. I would intentionally sit in the back and look over and I could see people checking in. It’s like, “This is amazing, there’s 25 people using my app in this theater. This is amazing.” They get satisfaction out of the fact that the stuff is out there. People build their stuff on top of our stuff and they just take it for granted.
And that’s what Foursquare is now. It’s gone from being something millions of people knew and cared about and wanted to use every day to actually something that lots, more and millions of people use and rely on every day. But most of us don’t even realize it because it’s baked directly into so many of our other apps and services. In that sense, the gamified version of Foursquare you probably think of when you hear the name of the company was more like a means to an end or rather a means to a hopeful end since it sounds like the company didn’t quite reach Dennis’s goal of providing a curated real world experience.
But hey, we might still get there. As you heard, Dennis mentioned he recently stepped down from his role leaving Foursquare which means he’s probably already thinking about his next project. And based on what we’ve heard here, it sounds like despite his success with both Dodgeball and Foursquare, he’s still got some unfinished business. I don’t know about you, but I look forward to seeing what he builds next.
In the meantime, I want to thank Dennis for sharing his story and the story of Foursquare. If you want to see what he’s working on now, you can find him on Twitter. He’s at dens, D-E-N-S. We’re on Twitter, too, @WebMastersPod. Follow us there and send any thoughts or feedback you’ve got on the episode. You can find me there, too, @AaronDinin. That’s A-A-R-O-N-D-I-N-I-N. And you can find all my articles, newsletters and classes about startups and entrepreneurship over on my website, that’s aarondinin.com.
Thank you to our audio engineer Ryan Higgs for pulling together this episode. And thanks to our sponsor, Latona’s for all their support. Remember, if you’re interested in buying or selling in internet business, be sure to check out latonas.com. Also, be sure you are subscribed to Web Masters wherever you listen to podcasts. That way, you get our next episode as soon as it’s released. It’s coming soon.
But for now, well, it’s time for me to sign off.
Out of curiosity, after your experience with selling Dodgeball to Google, did you ever consider selling Foursquare?
We flirted early on with Facebook. Facebook is one of the buyers back in the early days of Foursquare. And so, I got to spend a bunch of time with Mark. And I came to New York and we walked around once. And I just underestimated … even back in 2010, it’s like what a superstar this guy was. We went to the park to sit and talk. I’m like, “Can’t we go to a coffee shop?” “Let’s just sit and watch in Square Park.”
And then it was like all these reporters and paparazzi and stuff that showed up and it was like in the New York Post. I’m like, “We could get out of here.” And then, we were walking on the street and there was people following. And there’s like a security truck coming. And I was like, “You can’t even go get a cup of coffee in the city?” And he’s like, “Yeah, this is how it is.”
I mean, that was 12 years ago. I just remember that being like, “This is a whole different thing.” And just being really humbled by that experience and how naive I was about that.
Gosh, walk in with Mark Zuckerberg through the streets of New York City, that’s quite the experience.