AdExchanger: What is Foursquare’s value prop in a nutshell?
STEVEN ROSENBLATT: We’re the only company out there with first-party location data that’s been built from how the phone sees the world, and we have enough data that we can also determine location in high-density areas like cities or specific stores in a mall.
Eight billion people have told us that their phone is in a place, and we have 100,000 developers that we get data from.
How does Foursquare handle the known issues around location data accuracy?
We have deterministic data, not probabilistic data. There are a lot of fundamental flaws if you’re just an ad tech company trying to make sense of location data. If you don’t have a ground truth, you don’t have anything.
What do you think about other location data companies? There are a lot of them.
There’s going to be a big shakeout in this space. The only other companies that have real first-party data are Google and Facebook, but they don’t have consumer confirmation – a consumer actually telling you, “I am here, in this place.”
Geotargeting by state, for example, is broad enough that you’re not going to make much of a mistake, but a lot of other companies are making assumptions because they’re using proxies. GPS data bounces. Cell phone triangulation is so inaccurate.
Take Mall of America. Outlying signals may allow a phone to know it’s in the mall, but there is no way that those other companies could, with any degree of accuracy, understand which store someone is in.
How do you keep your location data fresh?
More people are actively checking in now than ever before, so we’re constantly getting fresh information. And we know when places open and close because the crowdsource community is faster at figuring that out than anyone else. We also have 100 million Wi-Fi scans, and we have a core technology built into our app called Pilgrim that creates a passive record of location, snapping users to places whether they’ve checked in or not.
What are Foursquare’s main revenue sources?
We have two major lines of business that form the lion’s share of our revenue: media and enterprise.
On the media side, we built Pinpoint to be a massive platform for digital targeting in the real world which allows marketers to reach audiences of non-Foursquare users based on where they go programmatically on any device. It’s the location equivalent of cookies.
We process location data from partners and we’re able to confirm whether it’s accurate or not because we have an always-on panel of users, and we’re plugged into all the major exchanges. AppNexus, AdX, Drawbridge and Adelphic are our preferred partners.
On the enterprise side, we have a developer platform subscription business for companies that want to access our API, which is moving toward a SaaS model.
We also have our place insights business to provide information around foot traffic and business intelligence around things like lift and exposure.
Does the market “get” Foursquare and what it’s all about?
We’re the most misunderstood company in the history of technology. That’s really our major challenge. Everyone wanted us to be the next Facebook. Well, we’re not the next Facebook, but we’re in the 1% of startups that make a success of themselves, and we’re thriving.
Is location data and its uses also misunderstood?
Anyone else who tells you they can use deterministic data programmatically while sitting on top of an ad exchange to reach someone in real time in a particular place is just full of shit. That is not truly happening. They’re making a complete guess, and we know this because of our consumer database and because we sit on exchanges, so we can see location data coming in – and at least 80% of what’s being passed isn’t accurate enough to snap someone to a particular place.
Any plans to IPO?
We’re just coming off fundraising. Our goal now is to put our heads down with the new funding, meet the demand that’s out there and get to profitability. From there, we’ll see.