Recently, Foursquare had split itself into two: one new app, Swarm, to focus on check-ins and seeing friends’ locations; and a new recommendations app to compete with Yelp. The latter will keep the Foursquare name.
This division makes no sense. We’re not even talking about the wisdom behind unbundling, although that’s still questionable. Founder Dennis Crowley made that division because he thinks recommendations is the future and he wants to give it the best possible start, thus inheriting the Foursquare namesake and its 40 million user base. This is success theater because what makes more sense is for recommendations to be the new app, and for Foursquare to still be about check-ins.
A check-in app for seeing your friends’ location requires network effects. If your friends aren’t on the service, the incentive to check-in or even to open the app is much lower. So a check-in app benefits more from a large installed base. The recommendations app utilizes check-in data from Swarm so in of itself does not require network effects to be valuable. From a strategic point of view, what is now Swarm should have kept the existing Foursquare name and app base.
Crowley himself admitted that most think of Foursquare as a check-in and gamification app.
The check-in story has dominated the brand and user experience [for Foursquare]. . .We’d hear people say ‘I had no idea I could use this app to search for places.’
Why change what people already believe? Wouldn’t it be more efficient to maintain the integrity of the Foursquare brand — check-ins, friends’ locations and gamification — and to create a new brand for place recommendations? Does anyone think this branding switcheroo wouldn’t further confuse people? From a branding point of view, it doesn’t make sense either. They’ve gone so far as to completely change the logo; what’s the point then of keeping the name, they might as well start from scratch.
The only way this makes sense is that Crowley wants the recommendations app to be as successful as possible, and that means inheriting the Foursquare brand and installed base. No matter how badly it fits, and no matter how it handicaps check-ins. Have courage, Crowley! If the recommendations app is any good, it will grow its own brand.
Even then, it will still be dependent on check-ins for data – so the company can’t afford for that pipeline to dry up. Even more reason why Swarm should have remained Foursquare. Currently, Swarm sports a 1.9 average on the iTunes store (all countries) and a 3.5 on Google play. Not a good sign.