6 ms·

Foursquare Closes $50M at a $600M Valuation

45 points by acak 15y ago

ChaseB 15y ago
I'm more interested in http://www.fivestarscard.com/ http://www.fivestarscard.com/, which I think is a YC alum. Their customer retention model is much more intriguing to me.
lycos1 15y ago
We're definitely in a bubble with these valuations!
jmjerlecki 15y ago
I love in all of these posts they claim Foursquare has 10 million users. There is no way the amount of active users is anywhere close to that. So many people I know sign up, check in once or twice, and never use it again.
- MatthewB 15y ago
  Good point. I like to talk trash about Facebook's PR but one thing they consistently do correctly is report total user numbers only when they are confirmed active users.
  - hvs 15y ago
    Facebook only reports "active" users because it is possible for them to do it in a positive light. If they had the same sort of usage that Foursquare undoubtedly has, they would be counting all users that signed up as well. That said, I still give Facebook credit for doing it.
    - andrewljohnson 15y ago
      Fundamentally, because Facebook counts it, that's what they seek. That's probably part of the recipe.
    - xentronium 15y ago
      I wonder if number of registered accounts on facebook already exceeds Earth's population and is kinda absurd to use in any kind of statistics.
  - phereford 15y ago
    I dont think when Facebook said they had 500 million users that they meant they had 500 million active users. I thought I saw a post today (or this week) that they hit 750 million users (without the word active in it...or so I think). The definition of active is so obtuse and varies wildly from company to company that it doesnt even matter :).
    - mikeryan 15y ago
      I dont think when Facebook said they had 500 million users that they meant they had 500 million active users. From Facebook's Statistics Site More than 500 million active users 50% of our active users log on to Facebook in any given day http://www.facebook.com/press/info.php?statistics http://www.facebook.com/press/info.php?statistics
      - phereford 15y ago
        Okay. My point is what is active? Someone who logs in once a year? Once a month? Sure 50% of "active" users log in once a day, but what about the other 50%?
        dillydally 15y ago
        For Facebook "active" has always meant "signed on within the last 30 days."
- jorgeortiz85 15y ago
  We report 10 million _registered_ users. We've never reported (or made any claims about) active users. Most tech companies report registered users; Facebook being the notable exception. When Twitter says they have 200M users or Skype says they have 650M users, they're reporting registered, not active, users. That Foursquare only reports registered users is in line with what most of the rest of the industry does.
  - JayNeely 15y ago
    But don't you think that's kind of shitty? "in line with what most of the rest of the industry does" doesn't make it any better of a metric.
    - harryh 15y ago
      FWIW I actually agree with you on this point. It's a bit of a prisoners dilema problem though. Basically everyone at this point has "defected" (reported signups). To be the only company to "cooperate (report active users) would be bad PR in a world in which most people don't pay attention to (or in many cases even understand) the difference. It sucks a little, but I'm not sure what to do about it. -harryh, engineering lead @ foursquare
      - jdp23 15y ago
        presumably your new investors understand the difference and are happy with the real numbers. so it's a great chance to invent the future (as you said above): do it the right way, and have other folks copy you.
    - physcab 15y ago
      All you want to do is showcase your company's growth in the best possible way without being misleading. They're not being misleading or shitty. If you're a free service that doesn't require a signup and makes money off advertising, then reporting registered users doesn't make sense. Advertisers just want to know eyeballs, so Google Analytics Visitor numbers will do. For Foursquare reporting registered users doesn't really make much sense either. They could have easily reported mobile installs too, but that would be similar. Internally, I'd be checking other growth metrics such as "How many people are using Explore", or "How many people are referring friends", or "How many businesses are getting new leads as a result of Foursquare". These are much more important questions, but alas, getting the media to care about that is hopeless.
ignifero 15y ago
Good news, guys, you can sell your foursquare accounts for $60 each.
acgourley 15y ago
"So a $50 million deal at any price wouldn’t lose money unless Foursquare winds up being worth less than $70 million." I'm just in awe this was written.
- alain94040 15y ago
  You just discovered one of the great secrets of VC preference and crazy valuations. If the startup guarantees to pay me back my investement plus some, then I don't care to announce that I invest at a valuation of $10B. In agreeing to such a high (and flashy) valuation, I give up on extra upside, but if my goal is 2X, then I don't actually care.
  - revorad 15y ago
    I don't think any VC's goal is 2X, especially not for one of the most promising startups.
harryh 15y ago
The two best things about working at foursquare: 1) It's our job to invent the future. We copy no one; other folks copy us. Every single day we're try to build new tools that change the way folks relate and interact with the cities they live in. It's super hard, and we don't get it right all the time but we keep pushing forward and we feel like we're on to something good. 2) We have the best engineering team of our size at any startup in the country. Everyone on the team is just incredibly sharp, hard working, and passionate about what we're doing. Want to find out more? Check out http://foursquare.jobs http://foursquare.jobs for open positions in both NY & SF or send me an e-mail (contact info is in my HN profile). I'm more than happy to answer questions here as well. -harryh, engineering lead @ foursquare
- chailatte 15y ago
  I have nothing against Foursquare, but this 'We copy no one' is a blatant lie. explore = copying yelp specials 2.0 = copying groupon Foursquare's vision appears to be looking backward. Dennis Crowley's been thinking about this space for 10 years?
  - harryh 15y ago
    explore = Personalized recommendations just for you based on where you + your friends have been in the past. Lots more powerful than a generic suggestion. Think "You've been to Aquagrill a lot, maybe you'd also like Lure Fishbar down the street cause it's pretty similar." LOTS of work to be done on explore for those with a background in search quality, machine learning, statistics, or infrastructure. specials 2.0 = much more flexible than a one sized fits all groupon. Venue owners can create specials around frequency of visits, checking in with a bunch of other folks (friends or non friends), being the mayor, and many other criterion. We're also, as you may have seen with our recent AmEx announcement trying to integrate our merchant tools with 3rd parties to provide value to both users and merchants on the foursquare platform. We've got lots more coming down the pipe as well. "We copy no one" might be a bit overstated[1] but it really is how we try to think about things. Not everything we do is revolutionary, a lot is evolutionary as well. That's just the nature of building a real product. It can't all be mind blowing (but we try!). Even if we don't succeed 100% of the time at making things totally new and awesome, I think having that as a conscious goal is a good trait to have in a company. -harryh 1. I'll admit to being overly dramatic at times. Sorry about that.
namank 15y ago
I honestly don't get why 4sq is worth 600M. As far as I know, their biggest asset is their user's location data; which is all in the past!! At least Facebook has 'friendships' that can be leveraged as value creating entities for which users go visit the site. 4sq is not even that. I use the app to check in to places, rarely every visiting the site. Someone please explain to me how is 4sq worth $600M?
- deleted 15y ago
  [deleted]
- harryh 15y ago
  Local advertising is a market worth many many many billions of dollars. In the future foursquare will provide more and better ways for local merchants to acquire new customers and treat their already loyal customers better. We'll charge for some of this. We think it will be a profitable endeavor.
  - yid 15y ago
    Have you dealt with the issue that checkins are almost impossible to verify in their current form?
  - nupark2 15y ago
    I like my phone, but I don't pull it out to be advertised to while I'm outside, I almost always make up my mind about where I'm going before I arrive there, and a physical sign at a store is still more efficient and user friendly than a smart phone coupon. There was a smart phone only offer for free popcorn at the movie theater the other day. It was advertised with physical posters all over the theater, directing you to Yahoo for free popcorn. I figured "why not," got out my phone while riding the escalator, got the evil eye from my wife for pulling out my phone in the middle of a conversation, got weirded out by the Facebook requirement, and gave up. I remain unconvinced that local advertising / coupons is something that is worth using a cell phone for.
  - namank 15y ago
    This is interesting. Just my opinion but you might be ahead of your time. NFC needs to be more mature before a user's location can be exploited. But by then, the concept of a 'check in' will be redundant to this process. Your window of opportunity seems to be now. What remains to be seen is what is the best way to leverage the 'check in' and that if you (4sq) have figured it out. Well, good luck to you and the rest of 4sq. I like you guys, just don't get how you will survive.

45 points by acak 15y ago

I'm more interested in http://www.fivestarscard.com/ http://www.fivestarscard.com/, which I think is a YC alum. Their customer retention model is much more intriguing to me.

lycos1 15y ago

We're definitely in a bubble with these valuations!

jmjerlecki 15y ago

I love in all of these posts they claim Foursquare has 10 million users. There is no way the amount of active users is anywhere close to that. So many people I know sign up, check in once or twice, and never use it again.

MatthewB 15y ago
Good point. I like to talk trash about Facebook's PR but one thing they consistently do correctly is report total user numbers only when they are confirmed active users.
- hvs 15y ago
  Facebook only reports "active" users because it is possible for them to do it in a positive light. If they had the same sort of usage that Foursquare undoubtedly has, they would be counting all users that signed up as well. That said, I still give Facebook credit for doing it.
  - andrewljohnson 15y ago
    Fundamentally, because Facebook counts it, that's what they seek. That's probably part of the recipe.
  - xentronium 15y ago
    I wonder if number of registered accounts on facebook already exceeds Earth's population and is kinda absurd to use in any kind of statistics.
- phereford 15y ago
  I dont think when Facebook said they had 500 million users that they meant they had 500 million active users. I thought I saw a post today (or this week) that they hit 750 million users (without the word active in it...or so I think). The definition of active is so obtuse and varies wildly from company to company that it doesnt even matter :).
  - mikeryan 15y ago
    I dont think when Facebook said they had 500 million users that they meant they had 500 million active users. From Facebook's Statistics Site More than 500 million active users 50% of our active users log on to Facebook in any given day http://www.facebook.com/press/info.php?statistics http://www.facebook.com/press/info.php?statistics
    - phereford 15y ago
      Okay. My point is what is active? Someone who logs in once a year? Once a month? Sure 50% of "active" users log in once a day, but what about the other 50%?
      - dillydally 15y ago
        For Facebook "active" has always meant "signed on within the last 30 days."
jorgeortiz85 15y ago
We report 10 million _registered_ users. We've never reported (or made any claims about) active users. Most tech companies report registered users; Facebook being the notable exception. When Twitter says they have 200M users or Skype says they have 650M users, they're reporting registered, not active, users. That Foursquare only reports registered users is in line with what most of the rest of the industry does.
- JayNeely 15y ago
  But don't you think that's kind of shitty? "in line with what most of the rest of the industry does" doesn't make it any better of a metric.
  - harryh 15y ago
    FWIW I actually agree with you on this point. It's a bit of a prisoners dilema problem though. Basically everyone at this point has "defected" (reported signups). To be the only company to "cooperate (report active users) would be bad PR in a world in which most people don't pay attention to (or in many cases even understand) the difference. It sucks a little, but I'm not sure what to do about it. -harryh, engineering lead @ foursquare
    - jdp23 15y ago
      presumably your new investors understand the difference and are happy with the real numbers. so it's a great chance to invent the future (as you said above): do it the right way, and have other folks copy you.
  - physcab 15y ago
    All you want to do is showcase your company's growth in the best possible way without being misleading. They're not being misleading or shitty. If you're a free service that doesn't require a signup and makes money off advertising, then reporting registered users doesn't make sense. Advertisers just want to know eyeballs, so Google Analytics Visitor numbers will do. For Foursquare reporting registered users doesn't really make much sense either. They could have easily reported mobile installs too, but that would be similar. Internally, I'd be checking other growth metrics such as "How many people are using Explore", or "How many people are referring friends", or "How many businesses are getting new leads as a result of Foursquare". These are much more important questions, but alas, getting the media to care about that is hopeless.

ignifero 15y ago

Good news, guys, you can sell your foursquare accounts for $60 each.

acgourley 15y ago

"So a $50 million deal at any price wouldn’t lose money unless Foursquare winds up being worth less than $70 million." I'm just in awe this was written.

alain94040 15y ago
You just discovered one of the great secrets of VC preference and crazy valuations. If the startup guarantees to pay me back my investement plus some, then I don't care to announce that I invest at a valuation of $10B. In agreeing to such a high (and flashy) valuation, I give up on extra upside, but if my goal is 2X, then I don't actually care.
- revorad 15y ago
  I don't think any VC's goal is 2X, especially not for one of the most promising startups.

harryh 15y ago

The two best things about working at foursquare: 1) It's our job to invent the future. We copy no one; other folks copy us. Every single day we're try to build new tools that change the way folks relate and interact with the cities they live in. It's super hard, and we don't get it right all the time but we keep pushing forward and we feel like we're on to something good. 2) We have the best engineering team of our size at any startup in the country. Everyone on the team is just incredibly sharp, hard working, and passionate about what we're doing. Want to find out more? Check out http://foursquare.jobs http://foursquare.jobs for open positions in both NY & SF or send me an e-mail (contact info is in my HN profile). I'm more than happy to answer questions here as well. -harryh, engineering lead @ foursquare

chailatte 15y ago
I have nothing against Foursquare, but this 'We copy no one' is a blatant lie. explore = copying yelp specials 2.0 = copying groupon Foursquare's vision appears to be looking backward. Dennis Crowley's been thinking about this space for 10 years?
- harryh 15y ago
  explore = Personalized recommendations just for you based on where you + your friends have been in the past. Lots more powerful than a generic suggestion. Think "You've been to Aquagrill a lot, maybe you'd also like Lure Fishbar down the street cause it's pretty similar." LOTS of work to be done on explore for those with a background in search quality, machine learning, statistics, or infrastructure. specials 2.0 = much more flexible than a one sized fits all groupon. Venue owners can create specials around frequency of visits, checking in with a bunch of other folks (friends or non friends), being the mayor, and many other criterion. We're also, as you may have seen with our recent AmEx announcement trying to integrate our merchant tools with 3rd parties to provide value to both users and merchants on the foursquare platform. We've got lots more coming down the pipe as well. "We copy no one" might be a bit overstated[1] but it really is how we try to think about things. Not everything we do is revolutionary, a lot is evolutionary as well. That's just the nature of building a real product. It can't all be mind blowing (but we try!). Even if we don't succeed 100% of the time at making things totally new and awesome, I think having that as a conscious goal is a good trait to have in a company. -harryh 1. I'll admit to being overly dramatic at times. Sorry about that.

namank 15y ago

I honestly don't get why 4sq is worth 600M. As far as I know, their biggest asset is their user's location data; which is all in the past!! At least Facebook has 'friendships' that can be leveraged as value creating entities for which users go visit the site. 4sq is not even that. I use the app to check in to places, rarely every visiting the site. Someone please explain to me how is 4sq worth $600M?

deleted 15y ago
[deleted]
harryh 15y ago
Local advertising is a market worth many many many billions of dollars. In the future foursquare will provide more and better ways for local merchants to acquire new customers and treat their already loyal customers better. We'll charge for some of this. We think it will be a profitable endeavor.
- yid 15y ago
  Have you dealt with the issue that checkins are almost impossible to verify in their current form?
- nupark2 15y ago
  I like my phone, but I don't pull it out to be advertised to while I'm outside, I almost always make up my mind about where I'm going before I arrive there, and a physical sign at a store is still more efficient and user friendly than a smart phone coupon. There was a smart phone only offer for free popcorn at the movie theater the other day. It was advertised with physical posters all over the theater, directing you to Yahoo for free popcorn. I figured "why not," got out my phone while riding the escalator, got the evil eye from my wife for pulling out my phone in the middle of a conversation, got weirded out by the Facebook requirement, and gave up. I remain unconvinced that local advertising / coupons is something that is worth using a cell phone for.
- namank 15y ago
  This is interesting. Just my opinion but you might be ahead of your time. NFC needs to be more mature before a user's location can be exploited. But by then, the concept of a 'check in' will be redundant to this process. Your window of opportunity seems to be now. What remains to be seen is what is the best way to leverage the 'check in' and that if you (4sq) have figured it out. Well, good luck to you and the rest of 4sq. I like you guys, just don't get how you will survive.