By  on November 3, 2010

“Do you guys know what Foursquare is? Does anyone here have no idea what Foursquare is? OK. Cool.”

Dennis Crowley, co-founder and chief executive officer of Foursquare, who, dressed in a hoodie and jeans, had “the honor of being the most underdressed person here,” as he put it, got right to the point with a mile-a-minute presentation delivered without slides or cue cards and barely a moment for air.

At its most basic level, Foursquare is a platform through which Crowley and his staff of 35 “build things for mobile phones aiming to make cities easier to use.” People go somewhere, they check in through their phone to share their location with friends via Foursquare, Facebook and Twitter. In the last 24 hours, Crowley said he had checked in at an airport in Florida, at Epcot Center, at the coffee shop this morning, and, prior to his speech, at the Plaza Hotel, where another user had left a tip to check out the hotel bookstore.

On one hand, “it’s like a crowdsourced city guide,” said Crowley. On the other, Foursquare is like a game whereby users earn points every time they check in. Repetition is the key to success. The more one checks in at a certain bar or restaurant, the more likely one is to be named mayor or earn a badge — the Gym Rat badge for going to the gym X amount of times, or the 16 Candles badge for X number of birthday parties attended. Digitally, Crowley said a badge amounts to a 60-by-60-pixel “representation of what we think is fun,” but Foursquare has partnered with retailers and businesses to turn those badges into real-life rewards in the form of discounts and free merchandise. So there’s a social, gaming and value incentive for the average user, who in turn generates invaluable data for businesses, which Crowley compared with Google Analytics for the local merchant.

“You turn your laptop around and say, ‘These are all the people who checked in here over the last week or the last month,’ ” said Crowley. “You can cut that data up and say, ‘This is the breakdown of male to female, this is the age bracket.’ We’re building a way for local merchants to reward their best customers. And it’s not just the people that are frequenting your business most often, but it’s potentially who used to be your best customers and where do they go now? Who are the people who could be your best customers because they work in the area and go to similar shops, but you’re just not reaching them yet? They’re challenging us to build these tools.”

Initially, Foursquare’s targeted audience was on a local level, but it soon realized the broader, large-scale appeal. It recently partnered with the Gap in Europe to offer a discount to patrons who checked in to Gap locations. Crowley said that during the two-week trial period, check-ins at the Gap rose by 30 percent, all of which is measured by social media impressions on Twitter, Facebook and the like, that act as mini ads sent directly to friends. “That’s really valuable to retailers, pizza shops and coffee shops,” said Crowley.

So much so that Facebook recently introduced Places, a similar device. Crowley said that, so far, the competition has been good for business. The site partnered with Lucky Magazine during New York Fashion Week, and applied Foursquare’s data-catch to Fashion’s Night Out to get the breakdown of who was going to what stores. He also noted that businesses are free to build on the platform without an official deal, as Jimmy Choo did when it created a Foursquare account for a new style of shoe and had the shoes “check in” at various locations in London. Pretty soon what Crowley called “an army” of Jimmy Choo fanatics was following the shoes in hopes of scoring a free pair.

As much as Crowley made Foursquare sound like good ole modern fun with a bonus of monetizable information, the audience had a few questions/concerns. On the subject of how Foursquare authenticates user information, Crowley talked about a self-service tool that either uses an automated phone call to ask users to verify their information or an automatic voice-mail system. For those put off by the idea of continually checking-in, the idea of automatic check-in was raised. “Sometimes it takes 10 to 15 seconds to get out your phone. What you want is the phone to check you in automatically. But I don’t think most people want to be tracked,” said Crowley, earning himself a few laughs.

Which led to the hot-button issue of privacy. Right now, Foursquare employs prompts, asking users if they want to share their check-ins with Facebook, friends, Twitter, etc. After that it’s at their own risk. When a woman in the audience said that rumors of a potential romance between two coworkers swirled around her office when the couple in question began checking into Foursquare at all the same places, Crowley said, “That’s exactly the reason we don’t do the auto-check-in.”

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