It’s a bad month to be Foursquare or Gowalla. Ten days ago, 900-pound gorilla Facebook announced Facebook Deals for Facebook Places (i,e., location-based coupons) and check-ins for third-party apps. A day later, Pew Research reported that, despite all the hype, the use of location-based services is actually declining in America, from 5% of the online population in May to 4% last month. Forget the fabled hockey stick; that’s more like a broken pencil.
Why? Because these services not giving us any good reason to use them. Look at their web sites. Gowalla proclaims, “Discover the extraordinary in the world around you.” Foursquare says, “Unlock your city.” To which I say: “Oh, come on“ — and it seems I speak for approximately 96% (formerly 95%) of the population. I have no interest in enlisting in a virtual scavenger hunt, or unlocking merit badges — what is this, the Cub Scouts? — or becoming the narcissistic “Mayor” of my local coffee shop. Thanks for the offer, but I’m afraid I already have some semblance of a life.
I do want to keep up with my friends, and (sometimes) let them know where I am. But if you’re competing with Facebook in social networking and your name isn’t Twitter or Google, I’m sorry, but I don’t like your chances.
Don’t get me wrong. Foursquare and Gowalla have done really well building ecosystems that attract early adopters. Unfortunately, the evidence indicates that they only attract early adopters. If they want to reach the majority who don’t care about making it to Mayor, they need to abandon their pretense of fun, stop pussyfooting around with silly slogans, and make their value proposition stark, simple, and profoundly unsexy: “Check in and get coupons.”
Look at Groupon. Do they have a cutesy motto? No, they just have the fastest growing company ever. Location-based services can and will be at least as big. But they need to make it clear that what you get is the ability to announce I’m downtown, I’m hungry, and I don’t know what I want to eat! or I need to buy a Kris Kringle gift, and I don’t much care where! – and then sit back and watch the discounts roll in.
It’s true that location-based games will eventually be huge, too, but such games imply interaction with friends. By the time they really take off, Facebook will own the mobile social graph, and direct competition will be disastrously dumb.
Location-based discounts, however, have little to do with social networking. That makes them a poor fit for Facebook — and hence still an opportunity for Foursquare and Gowalla. But if they don’t move fast to make it clear that that’s what they do, Shopkick is going to leave them eating dust.