Foursquare's Yelp problem (they just got time to figure it all out)

Yelp LogoFoursquare Logo

This week I downloaded a new Yelp app onto my iPhone. In it Yelp included a copy of Foursquare’s badges, which reward people for checking in frequently. Sometimes you might get a swarm badge for checking into someplace that has a lot of other users checked in too. Sometimes you might win a mayor badge for checking in more often than anyone else at your favorite restaurant or park.

Well, Yelp (CrunchBase info on Yelp) has now copied the checkin gesture that Foursquare (Crunchbase info on Foursquare) introduced to us all and also they added badges of their own. I already am the baron of my favorite Mexican restaurant in Half Moon Bay.

This copying behavior demonstrates to me that Yelp is definitely jealous of the attention Foursquare is getting and isn’t able to innovate on its own.

This seems to be a problem for Foursquare. But is it really?


Here’s why.

Back when I first met Steve Wozniak I asked him how an entrepreneur can build a new company that gets radically big like Apple. He told me that that only happens if two preconditions are met:

1. That a market is about to explode. That certainly seems true of geolocation-based services.
2. That the existing businesses ignore the new upstarts long enough for them to get traction. He told me how Apple was ignored by bigger companies like HP and IBM from 1977 to the early 1980s when IBM released the PC. Foursquare is only a year old and already it’s seeing its best features copied by Yelp. That’s a real problem.

Now, that doesn’t mean that Foursquare isn’t building something defensible.

Foursquare’s value is in two places:

1. Serendipity around people. Foursquare’s social graph is much more nuanced and much more focused on things that help me meet interesting new people. For instance, in Foursquare, if you’ve added your phone number like most people have, I can see you’re near me and I can also text you. It also shows me your Twitter and Facebook address. Yelp doesn’t focus on this so much.
2. Serendipity around place. Yelp is awesome if you: a. know where you are and b. know what you want. “I’m in financial district in San Francisco and I want great sushi.” Yelp is the best system for that. But what’s Foursquare awesome for? a. when you don’t know where you are and b. you don’t know what you want. When I arrived in Paris I had no clue what neighborhood I was in and I had an afternoon free. I checked in on Foursquare and it showed me, thanks to a tip left by someone, that there was the best Paris bakery right around the corner. I never would have known to search for that.

So, Yelp is jealous of Foursquare’s serendipity and gaming. But they haven’t nailed that yet. I think that’s why Foursquare’s CEO, Dennis Crowley, says that Yelp hasn’t copied the right features yet. But he’s gotta be nervous that they’ll figure it out in a couple of more months and totally take away Foursquare’s air supply. Now, this morning, Techcrunch is reporting that Foursquare is getting an investment, so that gives Crowley some time to figure it all out.

Where would I go if I were Foursquare?

1. Make the badge system web wide. Not just usable inside Foursquare. Lots of other companies are looking for a game to include in their apps. Open that up and make the badge system a platform. That’s probably why Facebook was so interested in it. Facebook needs more things to go web wide than just its like buttons (speaking of which, click like on my blog, please, see the bar below).
2. Add more utility around the tips. Finding the utility there is a bit difficult, and there isn’t enough of a game around adding them in, so lots of locations don’t have any tips, even ones that have Foursquare users checking in. And on places that have tons of tips it’s hard to find the ones that really are going to make your experience magical.
3. I’d buy some other companies, like Foodspotting, or Fiddme, and start hooking them together with Foursquare to make the utility better and more defendable against Yelp and, eventually, Google and Facebook, when they start getting a clue about location. I tried to set that up when I interviewed both Foursquare’s CEO and Foodspotting’s CEO together.
4. Buy a loyalty-card system, like CardStar. They claim not to be interested in selling, but there’s a HUGE amount of value in there. I’m using CardStar now to check in at Safeway with my Safeway card. Imagine if those two systems were joined?
5. Get Plancast and to share their data via APIs and build in new location features into them. Why can’t my calendar, on, check me into Foursquare automatically when it knows I’ve arrived someplace?
6. Add a “check out” feature. Why? Because that way I’ll know my friends are no longer at that coffee shop down the street so I shouldn’t try to meet them. How long you linger in one place says a lot about you, too. For instance, I hate shopping so I’ll only spend four minutes inside the Gap, if I go at all. But there are many people who will linger there for hours. If you are another clothing store, which customer is more valuable to you to get to come to visit your store? Me or that other customer?
7. Let us add a lot more data about the location we’re in. For instance, can eBay add inventory into that location? Can I post pictures or videos? Can you link to a wikipedia entry? Etc etc.
8. Extend the malleable social graph (that’s one thing Yelp hasn’t copied yet and won’t be able to easily). What is that? Foursquare is the only system that shows you users who are near you. That’s a malleable social graph. It shows you only a part of the social graph depending on a non-related variable (in this case location). Now, why can’t I have Foursquare only display people who’ve been to four Austin city BBQs? Or only show me the people who’ve been to five Sonoma wineries? Or, even better, show me only the people who’ve been to Sonoma wineries AND Austin. Yelp won’t be able to do that, and won’t see the value in doing that, but there’s DEEP value in that for getting rid of noise. After all, why am I taking sushi recommendations from people who don’t know anything about sushi and haven’t had enough experience with enough places to rate a sushi place?

Anyway, Foursquare does have a Yelp problem and it’ll be interesting to see how they deal with it over the next year.

What do you think? What would your advice be to Foursquare, or, really, any company that faces a larger, bigger, competitor, who keeps copying you?

The list maker

Making lists is something lots of us bloggers do. Here, for instance, is a list of the best apps for Android.

How did that list happen? I started a list on a new service,, and then I tweeted it. Within minutes I had dozens of apps that people all over the world had entered. Now 10s of thousands of people have visited that list, and have voted up their favorite app. The list changes, indeed, gets better, over time. This is a new kind of list, one that’s interactive.

Here the CEO, Shyam Subramanyan, explains his philosphy behind these lists and where he wants to take them in the future.

Lithium CEO: how game mechanics changes enterprise communities

Lithium‘s CEO, Lyle Fong, came to my house for a chat the other day. His service is being used by tons of companies to run their communities.

Now, companies have had communities for a long time. They might even be seen as boring, to take off a theme of my last post on eBay.

But why is Lithium winning?

Because they are using game mechanics to find the key influencers on a community and reward them with power. Why is this important? Well, when I was at Microsoft I learned that only a small number of people who are participating can make a HUGE difference to your community.

Listening to Lyle you’ll learn how this works to entice more people to put more content into these communities.

Why eBay's mobile chief loves them iPhones; eBay schools Yahoo on how to be interesting again

The other day I met with eBay’s mobile chief, Steve Yankovich. In the interview he starts out saying he loves iPhones “because it gets more traction.”

This is developer lock in front and central. eBay is one of the largest retailers in the world. They sell more shoes and clothing than Zappos/Amazon, for instance. So, if they are selling more stuff through iPhones then a raft of developers will continue putting their best developers on Apple’s platform.

You can even see this on Twitter/Facebook apps. I’m using Seesmic and, while it’s quite nice on Android, it runs faster and is more productive on the iPhone.

Listen to the 25-minute conversation with Yankovich and you’ll hear some other things eBay is seeing.

What? We’re decoupling our lives from the laptop or desktop computers. There are a new group of customers who are living almost their entire lives on their mobile phones.

We’re expecting to “try out” products online before we buy them. “Can we see the clothes on myself?” he asks.

I ask him if eBay will buy apps like RedLaser, that lets users with iPhones scan bar codes, or apps like CardStar, which let you hold retailer’s loyalty cards in your iPhone. He didn’t answer the question directly, but did lay out an interesting vision of where eBay will go with mobile in the future.

Around the world they see that there’s different things that matter to different regions. 50% of their mobile business is done outside the US. Emerging markets will eventually be almost all mobile, he says. “We gotta be there.” I talk about why Waze (a traffic app) is popular in Israel, but not popular in San Francisco. He riffs on that point and talks about how they’ll build different experiences around the world than they build for San Francisco.

I ask him whether he would like to buy Yelp or Foursquare, too. He answers that there’s so much to do with mobile to exploit what eBay already has before they get wild and go into totally different markets.

He’s bullish on tablets. “The iPad has been an eye opener for folks. People who are not early adopters are buying it,” he says.

At the end of the interview we talk about how eBay will use the higher resolution screens that are now shipping on high end smart phones like the EVO or the iPhone 4.

Check out his team’s work on the site.



After I met with Yankovich, I went over and had an off-camera conversation with eBay’s CTO, Mark Carges. Now, if you have been following eBay you know they have gotten pretty damn boring in recent years. Worse, they really pissed off a lot of their most loyal users. My ex-wife is an eBay Power Seller and you should hear the stories she told me over the last couple of years of how anti-customer eBay was.

eBay was in a deep hole. Yahoo is in a similar hole. So much so that its CEO, Carol Bartz, is yelling at Mike Arrington, telling him to “f*** off” and give her more time to turn around the company (she did that on stage at the recent Techcrunch Disrupt conference).

So, how is eBay digging out? Ideation software from Spigit. If you don’t know what Spigit is, here’s an interview with Spigit’s CEO where we learn more about that company.

Now software alone doesn’t make a company more interesting.

But listen to what Carges and his new team (some of whom were hired away from Microsoft’s search team) are doing:

1. Focusing on innovation for the first time in a long time.
2. Empowering everyday employees to try things out.
3. Building systems that let employees work with customers to improve eBay.
3. Aspirational messaging to employees and to the press.

So, what does that mean?

When Carges got to eBay (he came from BEA, where he learned how important platforms are) one of the first things he did was look around for places that eBay’s employees could play around and try out “small” projects that would help customers. He found none. So, first thing he did was setup an “eBay garden” where developers could pitch something out and work with customers to find out whether they liked this idea or not, and if they did, how could they make it better.

Each new project there has a “Tell us what you think” link, which goes into a system so they can see what’s the most important thing that customers are saying. Developers need feature priorities. Here the customers themselves set the feature priorities and that also gets everyone onto a mission of making things better. It’s very empowering to hear that customers are actually using your code, Carges, told me and it alone motivates developers. I asked him whether he was compensating developers based on innovation. He told me that the customer feedback is a huge motivator alone, along with executive support. He always tries to provide aspirational messages when talking to employees. Knowing how to please the boss is, he told me, very important, and if executives don’t tell the world how they want to be pleased then things will get political and teams won’t focus on the right things.

So, watch for them on stage to always be talking about where the puck is moving. Notice that subtle shift in how Yanchovich is talking above. He’s willing to talk about where mobile is going. That’s a pretty sizable shift from the old eBay administration. Compare and contrast to Yahoo or Microsoft’s current administration.

Why does this matter to making a company more interesting?

Because it’s the small new projects that tell us how a company is changing to marketplace demands. We like talking about what’s new, not what’s already been built. eBay is boring because it’s a retailer that hasn’t shipped much new lately. That’s changing, look at the mobile page with its “new” or “updated” buttons under all those apps. That’s interesting.

Their garden has tons of interesting new apps. I’ll dig into a few over the next few months and get more interviews. Why? Because eBay has turned a corner and is doing interesting small things again.

I hope Yahoo and Microsoft take notes. I’d like to consider those companies interesting again someday.