Foursquare's Twist on Facebook: A Reward for Checking In
Tweeting was the breakout web term for 2009. The early favorite for 2010? “Checking in.” — That's the basis of the Foursquare, the gorilla in a new wave of location-based social networking sites.
Context & Ripple Effects
Foursquare spent late 2009 building the rails before anyone paid attention: a TechCrunch warning that Facebook was poised to dominate geo framed the startup as an underdog back in November, even after it closed a $1.35 million seed round led by Union Square Ventures with O'Reilly AlphaTech Ventures, shipped an Android client in September, and dropped its city-by-city waitlist in early January so check-ins worked anywhere.
Time's framing lands on the differentiator: where Facebook broadcasts status, Foursquare pays users for showing up — badges and mayorships turn each venue visit into a game. That reward loop is the wedge a small, venture-funded team is betting can carve out loyalty in a market everyone assumes belongs to Facebook.
First-order effects
- Local venues gain a free loyalty program overnight: every check-in is a public endorsement and a competition for 'mayor' status that costs merchants nothing to host.
- Users choosing between Facebook's passive status updates and Foursquare's incentive-driven check-ins now have a concrete reason to run both apps.
Second-order effects
- Competitors in the location wave must bolt on game mechanics or merchant rewards of their own, since Time has just crowned check-and-reward as the category's defining feature rather than raw location broadcast.
- Merchants become a customer-acquisition channel for these startups, shifting the business model question from consumer subscriptions toward who can sell foot-traffic value to local businesses first.
Third-order effects
- If the pattern holds, physical presence becomes an advertising and loyalty currency: whoever aggregates check-in data sits between merchants and customers the way search engines sit between advertisers and queries.
- The check-in points toward location-based social networking consolidating around platforms that own both the user graph and the merchant relationship — a structure that invites scrutiny if rewards start steering consumer behavior at scale.
The trend: Location-based social networking is evolving from broadcasting where you are into rewarding where you go, turning foot traffic itself into the product that startups like Foursquare can sell back to merchants.