On any given day in New York City, there are usually close to a dozen, if not more, “meetups” for people who work for tech start-ups. There are NY Tech Meetups, monthly events that can attract nearly a thousand people to an auditorium at the Fashion Institute of Technology, where developers have five minutes to demonstrate what their technologies do and then get to network with the venture capitalists and entrepreneurs and bloggers and assorted hangers-on in attendance afterward at Black Door, a bar on West 26th Street. There are breakfasts for Women in New Media and for entrepreneurs in North Brooklyn, poker games at the apartment-slash-office of a start-up in Harlem called SpeakerText, Ping-Pong nights at SPiN New York, and dinners for the residents of a Union Square incubator called Dogpatch Labs.
And of course there are the myriad smaller gatherings of 27-year-olds who talk knowingly of series-A rounds and angel investing at places like the Scratcher, the bar on East 5th Street that has seen legions of 27-year-olds come and go, and Destination Bar on Avenue A and 13th Street, which is co-owned by a founder of an online product-development firm called Hard Candy Shell that shares office space with the geographical social-networking company Foursquare and the mini blog empire Curbed, in the building on Cooper Square that also houses the Village Voice.
Even in a city as large as New York, it’s not hard to figure out where anyone in the tech scene is at any particular time, because they have usually “checked in” to their location on their iPhones using Foursquare, which allows users to accumulates points and earn “badges” based on the number of places of the same type they go to in a night. (The person who has checked in the most to a location becomes the “mayor.”) Foursquare is also useful if you want to let everyone know that you are, for example, at the offices of Union Square Ventures, perhaps meeting with Fred Wilson, the venture-capital firm’s co-founder, to discuss funding your start-up, or that you’re having lunch at the Breslin, the restaurant in the Ace, with, say, Ben Lerer, the 28-year-old angel investor and founder of the men’s e-mail newsletter Thrillist, whose father, Ken Lerer, co-founded the Huffington Post. Foursquare is essentially an urban network of hipsters, their favorite haunts, their favorite food and drinks—a marketer’s dream, in other words.
Foursquare—which now has close to a million users—has been around since March 2009, when it launched at South by Southwest Interactive, the annual tech conference in Austin, Texas, that attracts a combination of tech entrepreneurs, journalists, bloggers, and social-media consultants for five days of panels and parties. These early adopters brought their Foursquare badges back to New York City, where the service began spreading a new way of experiencing the city—using the web to amplify the urban experience, making it richer, deeper, more fun. It’s the opposite of the canard that technology is ultimately alienating, that it has turned us into a nation of pale, hypnotized Second Life denizens who have forgotten what it’s like to interact in real life. Using New York as their laboratory, Foursquare—and Meetup and Yipit and Venmo and Hot Potato and dozens of others— facilitates and documents urban interactions, usually in real time, often with an eye toward building communities of users. While consumerism is at the core of the business model for many of these start-ups, that’s only part of the point. The entrepreneurs behind them have a sense that the city belongs to the rising generation, not some Wall Street guy or old-media geezer or other antiquated gatekeeper. In a way that can, at times, seem overly idealistic, even naïve, they believe in a sort of golden rule of Internet behavior, one that chooses trust over suspicion, optimism over skepticism, hope over doubt. And for the time being, hope seems to be winning.
Three weeks ago, while in Silicon Valley for the Where 2.0 Conference, Foursquare’s co-founder Dennis Crowley took a grand tour of its richest companies—chronicled, of course, by his own company’s app. He checked in at Apple, Twitter, and Square (Twitter co-founder Jack Dorsey’s new start-up), so all of New York’s tech world could note his progress. There were rumors—spread with excitement using these tools and eminently believable—of a possible $100 million deal with Yahoo. If the future of the web is social media conducted through mobile devices, Foursquare could be very useful to a company like Yahoo. But the fever over the hypothetical deal had a lot to do with a larger sense of what it implied: The West Coast tech world, for once, was at least sipping New York’s Kool-Aid. Foursquare and its brethren are, for the moment, on the cutting edge.
Go to a party for an “old” media company, and there can often seem to be a cloud of doom hanging over the proceedings. It can seem like half the guests have been laid off and the other half fear they still could be. The talk is of cutbacks and making do with less and paradigm shifts whose conclusions are, inevitably, the death of the industry.
And so, to spend a couple of months immersed in this new culture of optimism was, mostly, refreshing, if startling. Wasn’t New York the place where misanthropes and cynics flocked? Wasn’t New York the place for people who thrived on knowing, and never revealing, the secret phone number for Keith McNally’s restaurants—not the one for people who held open networking parties for anyone who wanted to attend? Wasn’t that so very uncool? But that forbidding, closed version of New York has, for this new generation, itself become uncool.
“Start-up culture is about really changing the world,” says Scott Heiferman, the 37-year-old co-founder of Meetup. “I know that’s a cliché. But Si Newhouse never wanted to change the world.”
At a recent party for a literary magazine, I was talking about social media to an editor—in his late thirties, though seemingly of an earlier generation—at one of the more august publishing houses in town. He had never heard of most of the companies I mentioned. “I guess they just really do fundamentally believe in the power of technology to improve people’s lives,” I said, completely unironically.
He rolled his eyes and laughed. “Oh, come on.”
The Interactive Telecommunications Program—or ITP, as everyone calls it—is an NYU Tisch School of the Arts graduate program in art and technology housed on the fourth floor of a university building that takes up most of a city block, from Broadway to Mercer Street and Washington Place to Waverly Place. I’m there on a warm March afternoon with Crowley, the 33-year-old co-founder of Foursquare, who is a 2004 graduate and sometime instructor. Crowley’s first company, Dodgeball, a kind of Foursquare precursor that was sold to Google in 2005, was developed here with a fellow ITP student named Alex Rainert.
ITP feels like an Alice in Wonderland version of graduate school. There’s a piece of wall art that, Crowley points out, is actually a mirror; stand in front of it, and the wooden slats move. Crowley—who is wearing turquoise Adidas, jeans, and a gray long-sleeved sweatshirt—gestures to several innocent-seeming plants hanging from hooks near the big windows overlooking Broadway. “Those are Botanicalls,” he says. “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’s a vending machine that, next to Twix and salted almonds, sells Photocell 200K light sensors for $1.25. The machine doesn’t take cash—you pay online, and the machine automatically registers it.
Crowley, who majored in communications at Syracuse, had been laid off from Vindigo, a city guide for Palm-device users, in 2001. He was planning on applying to business school when a friend invited him to “this weird art show.” It was one of ITP’s twice-annual student shows, and Crowley felt 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,’ ” he says.
In the lounge, a bunch of students are sitting around tables on their laptops. “See that foosball table?” Crowley asks. There are four guys playing what looks like an intense match. “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,” he says. “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,’ ” he says.
There’s an overthrow-the-overlords spirit at work in the tech world now. “Here we were schlepping around, protecting the power of gatekeepers and publishers and Barry Diller,” says Heiferman. “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.”
Venmo, a mobile-payments company co-founded by 26-year-old Andrew Kortina, allows users to pay for goods and services via text message and also encourages people to trust vendors (the first one in New York is the Simple Kitchen, a café in Chelsea) to take the money owed to them directly from their accounts. The idea, says Kortina, is “it feels good to be trusted.
“I think everyone wants to be a regular somewhere,” Kortina says. “It’s more poignant in New York than elsewhere—there’s an innate desire to connect with real people. Say you’re going to the coffee shop every day. It feels good to know the people who are on the other side of the counter. It feels good when they know your name. If we can help make it easier for people to establish that connection, I think it just makes people feel good.” The technology is being used to enrich urban face-to-face interactions—a better New York, if you, as a New Yorker, can believe that.
Crowley’s original start-up, Dodgeball, resembled a primitive version of Foursquare. When users checked in to a location, their friends received a text message; the premise was that people would be going to multiple places in an evening and their friends would want to meet up with them at different spots along the way. But Dodgeball was in many ways ahead of its time; it came out not only before the iPhone but also before Twitter and the Facebook explosion. The idea that people would want to share, constantly, the minutiae of their lives was not one that had permeated much beyond the early-adopter crowd; Crowley estimates that Dodgeball had 75,000 users at its height— barely a Facebook rounding error.
But the promise of location-based social networking was appealing, even then, to a company like Google, which had launched a beta version of Google Maps in February 2005. Crowley and Rainert had started trying to get venture-capital funding, but instead sold to Google in May 2005 for an undisclosed sum and went to work at Google’s New York office. The idea was that Google’s software-engineering prowess would help bring Dodgeball to the masses, but almost from the beginning it seemed like a bad fit. Crowley’s reluctant to talk about it, but he says, “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.”
By April 2007, Crowley and Rainert were gone, and Google announced it was shutting down Dodgeball in January 2009. Two months later, Crowley and Naveen Selvadurai, a 27-year-old, launched Foursquare. (Rainert recently came onboard as the head of the product team; he’s also an original investor in the company.) People in the tech world have decidedly mixed feelings about Google: How can something that big not be at least a little evil? At the same time, there’s no denying that having those 1,000 engineers here has led to a ripple effect, by establishing that New York—not just Silicon Valley—is a place that’s hospitable to technologists. “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,” says Union Square Ventures’ Wilson. “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.”
And then the city itself becomes a draw. “There are people who wouldn’t move from San Francisco to, say, Pittsburgh or Austin, but they would move to New York,” says Hunch co-founder Caterina Fake, who sold Flickr to Yahoo in 2005.
“The stuff is, first and foremost, meant for our friends,” says Crowley. We’re sitting with Selvadurai in the lobby of a Cooper Union building, across the street from the Foursquare offices, one afternoon. “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.”
Crowley’s experience with Google in some ways exemplifies the complicated relationship that many in New York’s tech community have with the technology behemoth. Chris Dixon, the 38-year-old co-founder (with Flickr co-founder Caterina Fake) of Hunch.com, recently blogged, “Whenever I see a brilliant kid decide to join Goldman Sachs, McKinsey, or Google, I think to myself: a start-up just died, and as a result our world is a little less wealthy, innovative, and interesting.”
In early March, Foursquare redesigned its app and also announced plans to launch a dashboard for businesses that would make it easier for them to take advantage of the data Foursquare was accumulating about their customers. Occasionally, when you check into a location on Foursquare, you’re informed that there’s a special offer where you are or one nearby; these are generated almost entirely by users, often the “mayor” of an establishment, who encourages the owner or manager to set up a deal for Foursquare users.
“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.”
To certain superannuated people—over the age of 35— this manic optimism brings a queasy sense of déjà vu.
Foursquare also allows anyone to use its software—or what’s called its API, the application-programming interface. So Yipit, which was launched a couple of months ago by Vinicius Vacanti and James Moran—both twentysomething Harvard grads and finance-world refugees—uses your location and your preferences to send you the best daily deal at area shops, restaurants, spas, and other businesses. And if you’re a Foursquare user, it pulls in everywhere you’ve checked in and lets you know whether there’s a deal at any of those places. When I signed up for Yipit, it informed me of two deals I hadn’t been aware of—including a happy hour at the bar I’d been to the night before. Depending on which deals I click on in the future in my daily e-mails, my Yipit account will get smarter and start recommending deals that will, theoretically, be tailored to my tastes. “New York is the perfect place to test new, local products, just because of the demographics and the density,” says Vacanti. Moran left Blackstone around the same time that Vacanti left Quadrangle, in July 2007; since then, they’ve been living off their savings. “In New York, people are constantly moving into the city. It’s such a confusing city, getting your arms wrapped around everything.”
Eventually, Yipit will get smart enough to know that if you’re interested in wine-tasting deals, you’re probably also interested in artisanal cheese. But these deals encourage social interaction; they take a DailyCandy or a Thrillist, both e-mail newsletters, one step further. Vacanti says that one of the most popular shared deals in New York was one that went out on February 18, less than three weeks after Yipit launched, for an $18 ticket to the “Taste of 7th Street” festival. At the time, Yipit had only 500 New York subscribers (currently they have 7,000)—but 40 clicked on that deal, and ten forwarded it to their friends. Tiny, tiny numbers. But imagine if, as they say, they’re scalable.
At this point in the game, not many of the latest wave of social media have any profits. This is the fun and messy business of collecting eyeballs, which then—somehow, some way—can be monetized. They don’t talk about it as much as, say, a Goldman associate would. Yet alongside their tech idealism is often an ecstatic vision of a liquidity event, the sale to Yahoo or Google or Facebook—at which point the tech dreamer becomes a guru, someone who can then mentor and invest in start-ups him- or herself.
Other companies—including Art.sy, a soon-to-launch online art service that will connect galleries with collectors—are living their arts-communitarian ideals. Kickstarter‚ which launched in April 2009, is a kind of community funding site for creative projects. One afternoon, I’m at their Lower East Side office, where they’d recently moved. Their eight-person staff is working at one large table in the front room. The floor-through office itself is badly in need of renovation—it looks like a long-neglected apartment—and some friends of Kickstarter’s two New York–based co-founders, Perry Chen and Yancey Strickler (a third founder, Charles Adler, lives in Chicago), are going to be taking on the project; in the back room are tools and plywood.
When I went to Kickstarter, the projects that were seeking funding included everything from a documentary on Asian-elephant conservation and a project that will cover the funding to send journalist Ted Rall to Afghanistan to a pair of Brooklynites who make artisanal soda. People can put up whatever they want, and the people behind the projects agree to give their funders something from the venture. So if you give $10 to the artisanal-soda folks, you get a coupon for two free sodas, but if you give $50, you’ll get a printed tote bag, a mix CD, a coupon for four free sodas, and a handprinted card with one of their soda recipes. Give more than $500 to Rall and you’ll get personally thanked in the acknowledgments section of his book plus signed copies. People set a funding goal for their projects, and funders don’t get charged unless a project reaches its goal. It’s a way of not only encouraging creativity but also making consumers feel more connected to the things they buy. (Kickstarter takes a commission of 5 percent of all projects that get funded.) The biggest project funded so far was for $85,000 for a book of Obama-campaign images, Designing Obama, by Scott Thomas, the campaign’s design director.
“The value is in the exchange,” says 33-year-old Chen, when we go down the block to Schiller’s for a snack. Chen looks like a surfer, with shoulder-length black hair; he wore a navy hooded sweatshirt over a T-shirt. Born and raised in New York, he spent a few years in New Orleans and still owns a house there. “I think that’s how you create an economy, and a commercial market that is sustainable, rather than seeing donor fatigue enter into it.”
Chen sees the power in returning control to the creative producer, the way it could upend much of the way culture is produced. “If you’re in music and you have a record label, if you’re in fashion and you work for a studio, you are giving up the mass bulk of your intellectual property right off the bat,” he says. “And with Kickstarter, you keep 100 percent of your own intellectual property.”
To certain superannuated people—anyone over, say, the age of 35—all of this manic optimism can summon a queasy sense of déjà vu. After all, by the end of 2001, Silicon Alley lay in ruins, littered with the detritus of now-forgotten companies like Kozmo.com and Inside.com. The bubble “got birthed in the craziest kind of hyper period,” says Union Square’s Wilson, who has invested in companies like Twitter, Etsy, and Tumblr. “So when the bubble burst, it came crashing down, like everything did. But when Silicon Valley came crashing down, there were lots of big companies that weren’t going to go away, like Sun and Cisco and Oracle. In New York, that wasn’t really true.”
Worse, New York has historically lacked what people in the tech community call “start-up culture.” To Meetup’s Heiferman, it comes down to the need for a shift in worldview. “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,” Heiferman says. “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.”
Heiferman is an evangelist-slash-contrarian in New York’s start-up scene. He’s got the history—he worked at Sony as its “Interactive Marketing Frontiersman,” then co-founded the first online ad agency, i-traffic, which was acquired by Agency.com, and the photo-sharing website Fotolog—and a vision for the tech scene that, appropriately for a contrarian, rubs some people the wrong way. He hates the idea that some of New York’s start-ups seem to exist only to support the so-called legacy industries of the city. “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,” he says. “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.”
In San Francisco, start-ups have cachet that they’ve never had in New York. It’s in part because of these legacy industries, the Condé Nasts and Goldman Sachses that have historically served as shiny, aspirational baubles for 22-year-olds and have long driven the city’s gestalt.
“I think it’s partially the Wall Street mentality,” says Wilson. “This is a very merchant town, a very commercial town.” He points out that compared with Boston and Silicon Valley, New York still has relatively few early-stage venture-capital firms. “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.”
The economic climate of the last couple of years has been a boon for start-ups. Costs, especially real estate, are lower, and it’s easier for entrepreneurs to hire engineering talent. “You’re seeing a lot of people who are very talented get laid off,” says Justin Smithline, 36, the co-founder and president of a music service called Instinctiv that’s sort of an enhanced iTunes Genius—it’s a mobile player that uses your musical taste to determine what you’d prefer to listen to and offers easy media synchronization and concert tickets—that’s received $1.6 million in financing.
“In the past eight years, the finance world sucked up all the technical talent. That’s stopped, so it’s rational again,” says Hunch’s Dixon. “In the past, you’d just get the idiosyncratic M.I.T. grads who happened to not want to make a million dollars on Wall Street or whatever. Now you can actually compete with them to some degree. And now you see kids coming out of college and just starting companies in New York.”
“Today, Amazon has their hosting platform, Amazon Web Services. Facebook has their identity platform, Facebook Connect,” says John Borthwick, co-founder of Betaworks, which builds and invests in start-ups. “If you want to build something now, you can build it on top of these building blocks. What it means is the cost of development goes down. The cost of entry goes down.”
And founders don’t necessarily have to be engineers, either. It’s easier than ever for someone without a hard-core engineering background to start a company—which bodes well for the development of more tech companies in New York. “The skill set required to build web technology is no longer an elitist skill,” says Boxee’s Zach Klein, co-founder of Vimeo.com.
Take SpeakerText, a company that links transcripts with videos that debuted at the NY Tech Meetup in January. If you copy and paste a section of a SpeakerText transcript onto your blog, the link will take people back to that exact portion of the video. It was founded by a 29-year-old Columbia grad, paramedic, and former journalist named Matt Mireles with no engineering background; the idea came to him because he thought it would be a better way to tell stories on the Internet. (Mireles is currently seeking funding.)
That being said, Betaworks won’t consider investing in a company unless at least one of its founders is an engineer, Borthwick says: “Three guys like me who are trained M.B.A.’s, they’re probably not going to get a meeting with us.”
“You ask yourself, is this guy a winner or not?” says Thrillist’s Lerer. “Is this guy going to figure out how to make this thing work, or isn’t he? It’s driven by people. I go from my gut. Do I really like this guy? Do I want to be partners with this guy?”
It’s this default use of the term guy that can grate for women in the scene. “Men refer men,” says 29-year-old Elizabeth Stark, a Brown and Harvard Law grad who teaches law and technology classes at Yale. “You have to directly address the problem, or you won’t change it. So if we just keep it status quo, for all the reasons defined in these self-reinforcing networks, they will stay self-reinforcing with the white, geeky, male, Stanford/Harvard-dropout types. And that’s who a lot of the V.C.’s are investing in. If I had a bunch of money, I would start a firm for women tomorrow.”
As a general rule—and there are exceptions, like tech investor and commentator Esther Dyson; Hunch’s Caterina Fake, who is also an angel investor in her own right (she sold the photo-sharing site Flickr to Yahoo in 2005 and was recently named one of the country’s top angel investors by BusinessWeek); Dina Kaplan, one of the co-founders of the web-TV distribution site, blip.tv; Emily Gannett of Klickable; Alexis Maybank and Alexandra Wilkis Wilson of sample-sale site Gilt Groupe; Jennifer Hyman and Jennifer Carter Fleiss of the Netflix-for-couture site Rent the Runway; Ann Baldinucci of the neighborhood-finder site NabeWise; and Brooke Moreland of fashion-advice site Fashism and Marissa Evans of the similar Go Try It On—the founders in the scene tend to be male. (I encouraged several single female friends to start going to tech meetups, promising them a ratio of approximately ten men to every woman.)
“We have a two-year program here, and we try like hell to hire women into that program,” says Union Square Ventures’ Wilson (whose office, except for his assistant, is all male). “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.”
The first time I visited Foursquare’s office, the company had six people. In a matter of months, it’s ballooned to sixteen. (Still, Crowley says, it’s not enough: “We just need to hire more folks. But if we hire more folks, we need to get another desk and some chairs.”) Everyone is leaving the following day for South by Southwest. The walls are covered with whiteboards and sheets of paper with various checklists; one says “SXSW Knocklist: Badges, XP, Venues, Design.” Also hanging on the wall is a framed quotation that says, “It’s not a bug, it’s a feature”; a single-speed bicycle leans up against a table. On the inside of his left forearm, Crowley has three temporary tattoos in the shape of Foursquare badges; one is special for SXSW. It’s a hookup badge, Crowley explains, for stops at three or more hotels in a night.
Since our first meeting, Foursquare has been busy—and growing. There were deals with several big companies and brands—including Starbucks, Bravo, Lucky magazine, the New York Times, and Marc Jacobs—that encouraged people to check in to places associated with them and earn special badges or get “tips”; Crowley sees this as a potentially important revenue stream. But with only one employee doing business development, it’s one that the company isn’t fully equipped to manage yet. “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,” he says. Foursquare, he says, 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,” he says. “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.”
Crowley wants to build a whole community—the consumerism embedded within it is an afterthought. Of course, Foursquare’s utility increases with the number of users it has, and its 900,000 or so users don’t come anywhere near Twitter’s 100 million or Facebook’s 400 million. (Crowley says it’s projected to hit 1 million users on April 21.) There’s still a psychological barrier that Crowley has to encourage people—not just early adopters—to cross. When I first joined in January and asked Foursquare to search my Gmail contacts to see who was registered, a relatively paltry 80 people showed up, most of whom were business contacts who don’t necessarily need to know the bars I frequent and where I get manicures. At a dinner party recently, I asked the ten other guests—none of whom worked in anything related to tech—how many were on Foursquare. None of them was, and only four had even heard of it. “Look, I could check in to your apartment building,” I said to the party’s host, showing him my iPhone as the name of his building—a high-rise in midtown—came upon Foursquare’s list of locations. He looked horrified.
Foursquare’s success is breeding imitation. Facebook is expected to launch a feature this month that will allow users to share their locations with their Facebook friends. “There’s enough of a unique user experience within Foursquare that I don’t think someone can come along and replace it,” Crowley responds. “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.”
Focused, indeed. With Twitter now running sponsored tweets, everyone seems to be getting more serious about the search for a business model—selling ads, selling to Google, earning a living by any means necessary. The wide eyes of the tech romantics—seeing a world where everything is changing, drinks are free, and a hangover at 11 a.m. is a small price to pay for being young in New York City—are evolving into the gimlet eyes necessary to survive in the long term. Working for free is about as popular as it ever was.
Foursquare’s first round of investors included Twitter co-founder Jack Dorsey, Silicon Valley angel investor Ron Conway, Union Square Ventures, Digg founder Kevin Rose, and O’Reilly AlphaTech Ventures. Crowley is currently considering a second round of funding—reportedly for about $10 million, which might value the company at as much as $80 million. When I ask Crowley about the Yahoo-acquisition rumors, he doesn’t deny, them, exactly. “We’re trying to figure out what the best thing is for us going forward,” he says. “We’re raising financing and meeting with tons of different companies. Don’t read into it too much.”
They’re not necessarily opposed to selling, Crowley says—but “it’s a business that can be a real business.” In the last boom, companies that were barely out of diapers were rushing to IPO, which led to the nasdaq’s becoming a graveyard of start-ups that peaked too soon. Today, people seem wary about selling too soon, as though they need to prove—to themselves, to the world—that they can create a viable business that actually affects people’s lives. Sure, everyone wants to be a millionaire, but to be a millionaire while also saying that you fundamentally changed the way people interact and engage with one another is, if you take their word for it, perhaps an even bigger badge of honor.
“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,” says Crowley. “The future is rosy.”
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