4 ms·

Reading the press on this, there is one thing that is glaringly absent: any numbers around growth. They quote a bunch of numbers that are sums of things since

Reading the press on this, there is one thing that is glaringly absent: any numbers around growth. They quote a bunch of numbers that are sums of things since inception of the company: how many checkins total, how many businesses 'using foursquare' (they don't define what 'using foursquare' means, which implies it's something trivial and misleading). The title of the press release is "Continuing Foursquare’s Growth"! Growth is obviously what they want to make you think is happening, unfortunately they have no growth to show. http://www.google.com/trends/explore#q=foursquare%2C%20pinterest&cmpt=q http://www.google.com/trends/explore#q=foursquare%2C%20pinte... Foursquare has no growth since 2011 and no way to generate significant revenue. If the numbers they quote on the press release are true, they would have so much cash rolling in that they would laugh at the idea of raising more money. The press release is intentionally misleading; this company is dying.

ollysb 14y ago
Yeah, my first thought was, no one I know has ever used foursquare, after so long without significant traction why would anyone want to pump it up? Having said that, there's a huge opportunity for someone that can become search for the real world. Foursquare might just be best placed to move into that area.
larrys 14y ago
"this company is dying." When something doesn't make sense many times I have found that there is probably something about it that is not known. Either something in the pipeline, or is a candidate to be acquired and they need to keep it alive a bit longer to make that happen.
martinshen 14y ago
Foursquare is largely used by cool urbanites. There aren't that many cool urbanites. The use cases for Foursquare in middle America are laughable. People want to humble brag: share cool coffee shops, countries they've been to etc. I wrote a sizable piece on the future of Foursquare and monetization today here. https://news.ycombinator.com/item?id=5533949 https://news.ycombinator.com/item?id=5533949
seeingfurther 14y ago
You missed the point entirely. This is a convertible debt deal and as such is not dilutive to common/employees. If FourSquare fails they lose everything. If FourSquare hits a homerun they benefit greatly. It's a very very smart move. (They meaning employees & management)
patrickambron 14y ago
You might be right. I don't really know people who use foursquare, and it's use cases from a consumer standpoint are really limited to people who live in cities (forget middle america) That said, this round does make a lot of sense for investors and management. If they didn't raise a round they would have run out of cash. That's over 5 years and $100M down the drain today. Rather than write the entire thing off, they're giving the company another 2 years to create something worth more than bankruptcy. There is still a lot to bet on. I'm not sure where they'll concentrate, but there is something valuable in being the location based layer of the internet, or being in a position to make cities more searchable on the go. Notice it's a debt round (w no valuation). They aren't trying to value the company higher, they're just trying to keep it alive as cheaply as possible
- justin_vanw 14y ago
  I get that, but I think this is an example of a desperate move. In order to have any value left for the founders and employees, the company will have to sell for some huge valuation that they are almost certainly not going to get. I'm not questioning the decision on the Foursquare side anyway, although they are clearly avoiding releasing any data that would give people an understanding of the current state of the company. I question the decision on the part of the investors. This is a lot of money to put in, and for what? The best case might be a 2x-3x return, but in my opinion the median return on this is $0, all the money spent and virtually no value in the end. I would imagine it's very hard for the management of FourSquare to let go emotionally, especially after hopes ran high in 2009/2010 and they had huge growth. It's clear that that growth has ended, and that they are now in a period of declining use. Combine that with an inability to monazite the existing user base and I see absolutely no hope of success. I suppose they could pivot the company, but why would they do that? It would make far more sense to leave FourSquare and build a new company that didn't have all of FourSquare's baggage and dilution from investments in the old model.

ollysb 14y ago

Yeah, my first thought was, no one I know has ever used foursquare, after so long without significant traction why would anyone want to pump it up? Having said that, there's a huge opportunity for someone that can become search for the real world. Foursquare might just be best placed to move into that area.

larrys 14y ago

"this company is dying." When something doesn't make sense many times I have found that there is probably something about it that is not known. Either something in the pipeline, or is a candidate to be acquired and they need to keep it alive a bit longer to make that happen.

martinshen 14y ago

Foursquare is largely used by cool urbanites. There aren't that many cool urbanites. The use cases for Foursquare in middle America are laughable. People want to humble brag: share cool coffee shops, countries they've been to etc. I wrote a sizable piece on the future of Foursquare and monetization today here. https://news.ycombinator.com/item?id=5533949 https://news.ycombinator.com/item?id=5533949

seeingfurther 14y ago

You missed the point entirely. This is a convertible debt deal and as such is not dilutive to common/employees. If FourSquare fails they lose everything. If FourSquare hits a homerun they benefit greatly. It's a very very smart move. (They meaning employees & management)

patrickambron 14y ago

You might be right. I don't really know people who use foursquare, and it's use cases from a consumer standpoint are really limited to people who live in cities (forget middle america) That said, this round does make a lot of sense for investors and management. If they didn't raise a round they would have run out of cash. That's over 5 years and $100M down the drain today. Rather than write the entire thing off, they're giving the company another 2 years to create something worth more than bankruptcy. There is still a lot to bet on. I'm not sure where they'll concentrate, but there is something valuable in being the location based layer of the internet, or being in a position to make cities more searchable on the go. Notice it's a debt round (w no valuation). They aren't trying to value the company higher, they're just trying to keep it alive as cheaply as possible

justin_vanw 14y ago
I get that, but I think this is an example of a desperate move. In order to have any value left for the founders and employees, the company will have to sell for some huge valuation that they are almost certainly not going to get. I'm not questioning the decision on the Foursquare side anyway, although they are clearly avoiding releasing any data that would give people an understanding of the current state of the company. I question the decision on the part of the investors. This is a lot of money to put in, and for what? The best case might be a 2x-3x return, but in my opinion the median return on this is $0, all the money spent and virtually no value in the end. I would imagine it's very hard for the management of FourSquare to let go emotionally, especially after hopes ran high in 2009/2010 and they had huge growth. It's clear that that growth has ended, and that they are now in a period of declining use. Combine that with an inability to monazite the existing user base and I see absolutely no hope of success. I suppose they could pivot the company, but why would they do that? It would make far more sense to leave FourSquare and build a new company that didn't have all of FourSquare's baggage and dilution from investments in the old model.