Selling FourSquare Would Be A Mistake, Partnering Would Be Genius

Dennis, Fred, Scott: Tweet Boom Tweet Boom
4/16: I Found Myself A Party: Tonight's Gonna Be A Good Night
If The Tweet Is The Atom, What Is Location?
Location! Location! Location!
Craig Newmark, Dennis Crowley, Jennifer 8 Lee: Koreatown

First there was talk that Vinod Khosla wants to pump 10 million dollars and above into FourSquare at a 80 million dollar valuation. Vinod Khosla, mind you, raised half of all money all VCs raised last year. He is a top dog in the game. (I Just Became Friends With Anu Shukla, Anu Shukla Has Found The New Frontier In Advertising)

Then there was talk Yahoo wants to buy FourSquare for over 100 million dollars, some figures put it at 125 million. More recently there have been reports other big fishes are also looking, namely Microsoft and Facebook. These stories are relevant whether they are true or not. It is entirely possible the different players are exploring their options. Feelers might have been sent out. Formal talks might or might not have happened.

I think selling FourSquare would be a mistake. Selling Hotmail was not a mistake. Sabeer Bhatia sold it to Microsoft for 400 million. But Hotmail was pretty much a finished product. FourSquare is nowhere close to being a finished product. I could argue it has not even started to start. And if it is about money, waiting a few years makes money sense too. Sell for more in a few years if you really, really want to sell it. But I am going to argue against that as well.

For me it is not about price. I am not saying don't sell to Yahoo for 125 million, but if they give you 200 million, then maybe. I am saying don't sell it, period. Google buying Facebook would have made no sense. Facebook could not have digested Twitter and instead would have ended up with constipation.

I can't think of one company that could buy and digest FourSquare and do the location space justice. Facebook could not do it, Twitter could not do it, and I am not even thinking about any other name.

The mobile web is bigger than the old web and also is growing faster. With the mobile web, location is key. Where you are when you are playing with your smartphone is so very important. And for FourSquare location is not an afterthought, location is the beginning point, and that makes all the difference.

FourSquare should be flattered by all the attention. Things have not always looked this rosy for FourSquare or its two founders. So they should take all this attention as ways to boost their self-esteem.

But flat out saying no might also be a bad move to make. The attitude should be, selling to you would be injustice to the location space, but let's work together, let's see if we can add the location feature to your many web properties wherever they make sense, and pay us for that instead. I think that would be the smart thing to do.

FourSquare has only a million users. That is nothing. The FourSquare team knows better than to wallow in all of the buzz. It is always safer to stay focused on the fundamentals of the business. Buzz comes and goes, ask Twitter. Twitter is in a better shape as a business today than ever before, but it does not have the buzz it had a year back.

FourSquare should use all this offer talk to expand its user base. Google expanded its user base dramatically by becoming the search engine for web properties like Yahoo and AOL. FourSquare should make similar moves. Create location space where it does not exist, and inhabit that space. It makes a ton of sense to talk to the big dogs in town. Cut deals.

2010 is location's year and FourSquare has the clear lead in that space. I see FourSquare never getting sold. Just like I never saw Facebook or Twitter getting sold. FourSquare has IPO potential, not now, I don't know when precisely, but it has IPO potential. If I had my way, Twitter would go for an IPO this year, before Facebook. (Twitter Should Go For A Netscape-Like IPO) I can see FourSquare going IPO somewhere in the mid 10s.

FourSquare is a business. For a business it is about money. The big money is in going IPO. FourSquare has reached that rare threshold for a tech company that it will never have any problems raising money ever again. That gives the FourSquare team the luxury of superb execution.

FourSquare will not get bought. FourSquare will buy. It could makes its first major acquisition later this year or early next. Stay tuned.

Fractals: Apple, Windows 95, Netscape, Google, Facebook, Twitter

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Fred Wilson: DJ

Image of Fred Wilson

When I first came across the FredWilson.FM web address, I "accused" Fred of flashing a vanity URL. If FredWilson.FM is not a vanity URL, I don't know what is, I said.

Fred Wilson: VC

A little later I started following Fred on Tumblr, and ends up he is quite a music man. I was not surprised. Books, movies, music are mind food. We are in the middle of a fundamental transformation akin to the one from an agricultural to an industrial one. We are heading toward a decidedly post-industrial age where mind food plays a pretty central role. Fred, owing to his vocation and interests, has a front seat to much of that change. He had to have had a huge appetite for mind food all along.

Fred Wilson's Insight

I also figured Fred might help me go one layer beneath the top layer I have stuck to for the most part. (Tumblr: Casey, Nina, David, Fred) There was this promise of richness, novelty, discovery and plain good music, although our tastes are slightly different. Some of the songs on the list are a little too soft for me, and when I say soft, I am not talking lyrics here, I pay attention to the lyrics only much later into liking a song, I am talking about the tempo of the musical rhythms; but I like all kinds of music, I could even name you a few country songs that got me truly excited. (Lady Gaga) I don't like all songs on Fred's list, although I'd be hard pressed to skip any. But I like most of what I hear. (I'll Be Gone)

Fred Wilson: A VC

So earlier today for the first time I ventured over to FredWilson.FM, and the site is a treasure. There are 881 songs liked enough by Fred that he was compelled to share. And I really like the streaming concept. You turn the music on and go do something else. 881 songs, how many days of music is that? I think I just listened to about 20.

Fred Wilson

I went over to the Streampad site that supposedly powers FredWilson.FM and FredWilson.FM is prominently displayed on their front page. I am not surprised. I guess Fred is a celebrity user of the service. If Fred Wilson is using it, it must be a good service. Good marketing. It is a good service.

Fred Wilson: VC

I wonder if during my second visit to FredWilson.FM I can go to say song number 46 and start from there. Or do I have to begin at the beginning again? I know I can skip songs, but having to start at the beginning and then skipping one song at a time would take away from the experience.

Fred Wilson's Insight

One feature that is lacking or that I did not discern during my first 10 seconds at FredWilson.FM is the shuffle feature. I want the system to jump randomly from song to song. Then repeat visits would be more likely. But even now I am definitely coming back. Something in me wants to listen to all 881 songs over months. No pressure, no hurry, just something to end up having done some day.

Fred Wilson: A VC

Now that I have found it, I realize I have been looking for something like FredWilson.FM for a while now, a good music collection of mostly never heard before music that I can simply turn on and listen to end to end. Now there is a link to FredWilson.FM from my private homepage that is my jumping point to most of my daily web experiences. That is not to say I will be visiting daily, but I'll be back.

Fred Wilson

(Update: 40 tunes down.)

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Graphic Reality

Image via CrunchBase

Albert Wenger: Facebook And The Net
Fred Wilson: One Graph To Rule Them All?

Both Al and Fred are saying Facebook runs the danger of repeating Google's mistake in some form or fashion. Google made several attempts to "get" social. None of them have succeeded in a dramatic way so far. But Google was the company of the decade, and for good reasons. An obvious example of a Google social failure has been Buzz. Gmail already had tens of millions of users. And aren't people who you email back and forth with the most your closest people socially? Let Buzz present to you your social graph. That thinking bombed in a big way.

For Google the starting point is information, and it is the best in the game with that. For Facebook the starting point is the social graph, and it has been taking the lead there. You could argue for FourSquare the starting point is location, and since that can not be the starting point for either Facebook or Twitter, FourSquare does not run the danger of getting under the Facebook, Twitter bus.

Yesterday I watched Mark Zuckerberg's keynote at the F8 conference. Today Fred Wilson was talking about it at his blog, and looks like he got inspired by a blog post by his partner in venture capital crime Al Wenger.

Since Facebook has taken over Google as the most visited site in the US, you can not blame Zuck for trying to suggest PageRank is b.s. That what really matters is the social graph. I think all the Facebook initiatives are robust and good ideas to take Facebook to the next level, but only if Facebook keeps the criticisms of the likes of Wenger and Wilson in mind. Respect that there is not just one social graph. LinkedIn a few days back came out saying they will also now allow for the sharing of updates, news items and links in general, and I am thinking, great, this can be the Facebook for your coworkers and bosses. Your work social graph looks different from your friend social graph. Your family social graph looks different. And what are the chances I will find a friend of mine read the same Time magazine article as me. The chances are minimal.

So I say, march forward, but march with caution. Always be iterating means always be listening.

(Al just got promoted to the A1 section of my blogroll. He is very good about replying to the comments you leave at his blog.)

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Chatroulette Is For Real

We are all sold on location, and for the right reasons. But random connections as a space is not garnering the same respect, and I am going to call that a case of adultism. Because the founder of Chatroulette is a 17 year old, a lot of people are having a lot of fun talking about penises that supposedly sprout out during the Chatroulette experience. Guess what, sex is in the mind. Penises sprouting out do not take away from the basic Chatroulette promise, that random connections is a new web space, and Chatroulette has a bright business future.

Once I got a hang of Twitter, I said many times you can take Facebook away. I feel like both a high school and a college dropout. Most people on Facebook remind me of two institutions I do not want to be particularly reminded of. I liked it that on Twitter I could interact with people I did not know. Chatroulette takes that to a whole new level. Note: I have not tried Chatroulette yet, but I don't have to, I am sold on the space.

Chatroulette has to iterate. It is already at 30 million hits. That is a great point at which to roll out the future versions, to add new features. What could some of those new features be?

Once I roll the dice a few times, and I find someone I like interacting with, I should be able to bookmark that person, but only if that person agrees to get bookmarked. Once I build a library of a certain number of bookmarked people - and I don't need to know anything about them to that point - I should have the option to roll the gun only inside my library.

On the other hand, I should also have the option to block people. If I see a penis, and I don't like it that I had to see a penis, I hit a button that says Block For Nudity, and if a person accumulates 10 or more such blocks, they should enter a special zone. As in, people should have the option to say keep me away from people who have been blocked for nudity 10 times or more.

Voila. The penises are gone.

When I am thinking Chatroulette, I am thinking world peace. Seriously. We need more people talking to more people to get at that utopia called world peace. I want Chatroulette on all Israeli and Palestinian screens. Get those buggers talking to each other. And let them show penises to each other when they are pissed instead of blowing each other up. The 2010 version of make love not war?

Ever heard of people to people interaction programs run by governments? This is it. Chatroulette is the ultimate people to people interaction program.

But it is important to keep the randomness intact. You should be able to bookmark me, but I should not have a profile on there, no name, no location, nothing about me. If people volunteer such information to each other during conversations, fine, but Chatroulette should keep the randomness very much intact.

The next big filter jump would be to allow for geographical filtering. So I go on Chatroulette and I want to meet random people from Africa, I should be able to do that. (Nfodjo, is that you?) Or go to the country level. Or maybe even city level. I feel like meeting people from Moscow, how about it? Hello Olesya.

Just a few filters and the bookmarking and blocking options, and a lot of the caricature of the service vanishes.

Fred Wilson (the first person to tell me about Chatroulette, through his blog.... I accused him of now having got into the breaking news business)
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Dennis, Fred, Scott: Tweet Boom Tweet Boom

Image via CrunchBase

New York Magazine: Tweet Tweet Boom Boom

Dennis Crowley

“Those are Botanicalls. When they need to be watered, they send you a message on Twitter that says, ‘Water me, please.’ I have it hooked up with one of my plants at home.”

“There was a girl who had a project that was just three robots following each other around. I said, ‘I need to be here playing with this stuff. This is where I belong.’ ”

“See that foosball table? That was my first project at ITP. I put sensors in the goals. When you started playing, you swiped your NYU I.D. on the table and your stats got shown on the screens behind it. If you scored a goal, it would show.”

“I wanted to make the foosball table smarter. My professor”—Internet-culture guru Clay Shirky—“said to go analyze a source of social data. I had all the data from the foosball table, and I started thinking, What do friendship circles look like? Who are the outliers? Who doesn’t connect to other folks? I was trying to wrap my head around it. To make a foosball table smarter isn’t that different from ‘Let’s make a city smarter.’ ”

“It was just after their IPO. The New York office had just opened. A couple weeks into it, we were like, ‘Where are those engineers?’ We were hoping to have more of a team, but it was hard to get engineers.”

“The stuff is, first and foremost, meant for our friends. The same thing happened with Dodgeball. We were just building tools that were making New York more efficient for twenty of our closest friends. A lot of the ideas we shoot within Foursquare are also themes that I think already existed in Dodgeball. We’re just bringing them back to life in new ways, with smarter phones. At the time, Dodgeball was a New York application. It was meant for people to start off with 25 friends who could easily jump to five places in one night, which is definitely an urban type of experience. Foursquare has been changed so that it rewards a one-player experience—it gets more interesting as you add friends to it, but it’s definitely a better one-player experience. And it’s designed to work in New York, and then we kind of tweak it so it works everywhere else. I think it works best in really dense urban areas. New York’s been critiqued for a long time,” he continues. “The critique is that you can’t do stuff like this here, but I think part of the reason that our product is interesting and special is because it came out of New York. It was designed to solve problems in that context, and those solutions tend to work in other parts of the world pretty well. I think the product is better because we’re based here.”

“Usually what will happen is a user becomes the mayor somewhere and asks the manager, ‘What do I get for free?’ ” says Crowley. “The manager at first is usually like, ‘What are you talking about?’ They’ve never heard of Foursquare. Eventually, the manager will break down. It’s an opportunity for us to start turning users not just into evangelists but also salespeople. So the venues win—anytime someone checks in, it’s like a mini-ad. With the stats tools, you can find out who the most valuable users are to local businesses, like who’s sending their check-ins to Twitter. Maybe the owner wants to reach out to that person.”

“We have all these companies calling us, and it’s a little bit problematic—we have so much inbound business development that we can’t capture it all. Foursquare could eventually turn into not just an app that tells you how many bars your friends went to the night before but a more ambitious project about social relations. You build a game of it. The first person to do ten crazy things wins. It expands it beyond consumption. Maybe you get badges for meeting people or bringing people together.” So on Foursquare, based on the bands you saw in one week, maybe you met more people, and so maybe your happiness and your productivity is higher. So check-in is just the first part of this story.”

“There’s enough of a unique user experience within Foursquare that I don’t think someone can come along and replace it. It’s a different type of sharing. When Facebook changed its status updates, it didn’t kill Twitter. It might make us a little more focused.”

“We’re trying to figure out what the best thing is for us going forward. We’re raising financing and meeting with tons of different companies. Don’t read into it too much. It’s a business that can be a real business.”

“We could make it work as a stand-alone business, or it might turn out that there are other companies that would find us valuable. The future is rosy.”

Fred Wilson

“They’ve taken the Silicon Valley culture and infected hundreds of engineers with it, and those engineers are not likely to want to go work for Morgan Stanley or Goldman Sachs. It’s not in their DNA. That’s not what they’re going to do. They’re more likely to go into one of our start-ups.”

“I think it’s partially the Wall Street mentality. This is a very merchant town, a very commercial town. My partners and I make a decent living, but we manage $275 million. I have friends who are my same age who are partners at Goldman Sachs, or who are running their own hedge funds, who make ten to a hundred times more money than I make. I’m not upset about it, because I love what I do. But in New York, it’s about making money.”

“We have a two-year program here, and we try like hell to hire women into that program. We tell the world we’ve got this opening, and anybody who’s interested can apply, and it’s 90 percent men who even bother to apply. I mean, I don’t know what the problem is.”

Scott Heiferman

“Start-up culture is about really changing the world. I know that’s a cliché. But Si Newhouse never wanted to change the world.”

“Here we were schlepping around, protecting the power of gatekeepers and publishers and Barry Diller. Fuck that. We really have to look at ourselves—the Internet is reinventing and rejiggering everything. We need to see ourselves as making a new New York.”

“In Silicon Valley, when an Apple or a Google happens, it inspires tons of people to not just be entrepreneurs or founders of start-ups. It encourages people to just work in the industry because they know if you’re an engineer for a company that does really well, then you do well. New York does not have its great success stories that become the stuff of legend and lore and myth.”

“Madison Avenue ain’t gonna be the heart of New York anymore. Wall Street’s not going to be the heart of New York anymore. Media’s not going to be the heart of New York anymore. New York is actually really hot. We’re inventing the shit that the world is using! This is a first. The fact is that New York didn’t create any great companies in the first tech boom. The closest thing was DoubleClick—but that was about making what old advertisers need.”

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