Thanks to supportive venture capitalists with deep pockets, some of the most prominent startups in recent years have been able to put off the 'making money' part of creating a new business.

But no business can survive forever without a revenue model, and for Foursquare, it looks like it's time to make money.

Last week, the company announced that merchants could pay to instantly verify their accounts. The cost: $10. And yesterday, in a play for an even bigger revenue opportunity, the Wall Street Journal reported that Foursquare is preparing to "join the coupon craze," something that has been in the works for some time.

Slated for launch in June, Foursquare's strategy will involve a new version of its app, as well as a new platform for merchants. Through that platform, merchants will be able to pay to distribute coupons and offers that Foursquare's users can redeem if and when they check in at the location of the merchant in question.

According to Foursquare CEO Dennis Crowley, "We are building software that's able to drive new customers and repeat visitors to local businesses." He added, "We're getting really good at connecting people with places, and connecting those places with people. We're finding ways to do this algorithmically."

The question for Foursquare, of course, is whether it's too late to the coupon party. Thanks in large part to the meteoric rise of Groupon, which popularized local deals in recent times, there is no shortage of companies aiming to bring customers through the doors of local businesses. From upstarts to established companies like Yelp, merchants who haven't yet tired of discounting -- a market that may be getting smaller -- have plenty of options.

As Crowley sees it, Foursquare's "secret sauce" is its ability to analyze and "[make] sense of" the more than 2bn check-ins the company has tracked. But as the Wall Street Journal notes, a recent research paper found that the Foursquare check-in is quite unpopular with some consumers, raising questions about the company's ability to hit a home run with merchants.

Time will tell if Foursquare checks in to a revenue model that can make it wildly profitable, but in the meantime one thing is for sure: for many of today's most heavily-funded startups, finding a way to make money will be a lot tougher than finding ways to spend it.

Patricio Robles

Published 9 May, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (3)


KSingh - Web Designer, London

It was about time FourSquare have joined the coupon craze. Its never too late as coupons are here to stay. Moreover, location based services like FourSquare are better suited for coupons as it will be far more targeted. I can see it working well on FourSquare. Imagine, you are out with friends and can have access to a range of offers in your vicinity.

over 6 years ago


Paul Zeno

Foursquare are a bit late to the table with the coupon proposition, and what is more, it is the wrong proposition. I use foursquare a lot and in my mind foursquare is positioned as a user based app, it’s about word of mouth and getting tips from trusted and unbiased source – friends. The minute you open this up to businesses to peddle their offers, I believe it will weaken the existing proposition. There are revenue options open to foursquare without distorting their current proposition. The billion dollar question is why. I hear investors screaming ‘we should of backed Groupon’.

over 6 years ago



well no business can survive last without a good revenue-model, and for Foursquare, it looks like it is time to make money.

over 5 years ago

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