Foursquare announced that it’s founder and CEO Dennis Crowley is stepping down. He will be replaced by Jeff Glueck, who joined as Chief Operating Officer in 2014. Crowley will move to the executive chairman position.
The change was a part of the $45 million financing round. Two years ago Foursquare has been valued at roughly $600 million. Today the company is worth less than a half of it (~$250), which could not be left unseen by investors. Signs that thing are getting bad were leaking out from at least couple of months.
In April Mashable reported that the most talented employees are leaving the company. The problem was lack any feasible vision to grow. It all started in May 2014 when Foursquare decided to do a controversial change. The most popular check-in app, where users could search for places to go, and share their location with their social network while earning points and badges at the same time, has been split into two apps. The first one stayed branded as Foursquare but it was focused on local search and discovery engine (similar to Yelp). The second one was called Swarm and it was all about sharing-location with friends.
Although Foursquare is still my favourite location discovery app, the Swarm has never been accepted by users. It was lacking of cool gamification features and users clearly started to use Facebook for sharing their location with friends. “Check-ins” – the main value added differentiating Foursquare from Yelp disappeared. One of Foursquare core revenue streams was selling its robust location data to other businesses and brands. If you’ve got no fresh data, it’s value and usability decreases.
So how is Foursquare planning to restore the growth?
The company said it will use its new funding to build the app’s location data-based advertising products and its business selling data on consumer behavior to developers, such as Twitter and Pinterest. The funding will also be used to hire 30 new employees in roles such as sales and engineering.
Foursquare also comments that the executive shuffle will give Crowley time to lead the company’s vision without day-to-day distractions. Crowley says he’ll continue to stay involved and working with the company in a full-time capacity — “1,000%,” he says — and that the transition has been on his mind for the past year.
What can we say… We wish Foursquare and Dennis all the best in 2016.