Foursquare CEO Dennis Crowley, Rebuffing Sale Offers, Says Revenues Grew 500% in Q1 2014, 600% In 2013
Foursquare — the app that has shifted its business model from a place to track where your friends are going to the go-to place for people searching for local information — is fast approaching its fifth birthday (it’s March 11, for those of you prepping presents). And CEO Dennis Crowley wants us to know that it’s still growing — in revenues at least.
Yesterday, speaking on CNBC alongside Foursquare investor Ben Horowitz, he said that revenues at his startup grew 600% in 2013, and in the first quarter of 2014, they were on track to be up by 500% compared to Q1 of 2013.
Crowley didn’t give concrete numbers, but doing some back-of-the napkin math, and assuming linear growth, that gives Foursquare 2013 revenues of $14 million, and Q1 2014 revenues of $21 million (based on the widely reported figure of Foursquare making just $2 million in 2012).
That’s $1 million shy of the $15 million-$20 million that was estimated for 2013. Still, it is a sign that the company’s ambitions to generate revenues from businesses and other advertising around its app is indeed bearing fruit.
It’s also likely before a licensing deal comes into play with new investor Microsoft to power location across Windows and Windows Mobile services.
What’s also interesting about Foursquare’s revenue growth is that it points to another kind of inflection point for the company, recalling the one Crowley discovered a couple of years ago when he saw that more people were using the app than were checking in).
Could that pose a problem longer term? No audience, then no revenues from marketing and advertising, after all. There are licensing deals, and Foursquare has yet to commercialise its API used by zillions of other apps to provide a location layer.Still, that stall may be one reason why Crowley is also pushing another idea: the concept of Foursquare being used without people even thinking of it.
“A lot of these tools have been designed where, if you want to use them, you have to think about using them,” Crowley said of the wider trend in smartphones and the apps we use. “But what’s starting to happen is that with all the sensors [on devices] you have the opportunity to be smart and contextual. We know when you are in a restaurant you’ve never been in before or a city you’ve never been in before. How can Foursquare come to life when you are not thinking about it?”
(Sidenote: this could come in very handy for the four CNBC journalists chatting with Crowley, who seemed genuinely surprised when he told them that they could use the app to, for example, find a place to eat in an unfamiliar city. “A lot of people don’t really understand what we’re building at Foursquare,” Crowley said forgivingly.)
Of course, given the news of WhatsApp and its $19 billion acquisition by Facebook, they also asked a question about exits.
Foursquare’s been a rumored target for a number of tech companies in recent times, so how much pressure does Crowley feel to sell? “We’ve had plenty of opportunities to sell the company and we turned them down, a number of times,” Crowley said. “What we’re doing is not a sprint from A to B; it’s a marathon.”Horowitz then agreed with that concept, at least in principle, if not citing Foursquare specifically. “There are exits involved but it starts with what is the size of the market and are you going to win? From an economics standpoint it doesn’t make sense to sell,” he said.
Citing the story that Yahoo was in a position to buy Google in 2006 but Google said no, Horowitz said that was obviously the right move. “Google was in a bigger market and was going to be number one, but if you are not going to be number one and a company can help make you that then that is an interesting opportunity.”
Time will tell on which side of that equation Foursquare will fall.
You can see an excerpt of the Crowley interview here: Read more: www.mtv.com
More On Flipboard’s Acquisition Of Zite: “The Deal Whisperer,” Zite’s Fate, The Price Tag, And Paper
After Flipboard and CNN today announced that personalised magazine app Flipboard was buying Zite from CNN, I had a chance to talk with Flipboard CEO Mike McCue and CNN’s digital head KC Estenson about the deal (pictured here looking chummy around the time they announced the news).
The two wouldn’t say anything directly about the price of the deal, or any other terms, except to question that CNN itself reported the $60 million figure (a question that has since turned into a statement that the figure is inaccurate, with some suggesting no cash was exchanged). Nor would they comment on a question I’d asked them about whether part of the financial terms included CNN investing in Flipboard, although a later story in Bloomberg, unconfirmed by the companies, noted just that.
What they did talk about was some of the germination behind the deal, the fate of Zite, and a bit about how the two will work on advertising together. Key to the ad agreement is that CNN and Flipboard are working together on ads for CNN content on Flipboard — but also for across other parts of the Flipboard experience.
And lastly, no one’s sweating over Paper.
So, who approached whom?
McCue: It was really down to Quincy Smith [Flipboard investor and former president of CBS Interactive], who I like to call “the deal whisperer.” KC could see how important this technology would be for digital content. And I wondered how we could partner with CNN. Quincy introduced us and ultimately we came up with this.
Estenson: We actually met on Tinder. (Funny guy.) I look at this as doubling down on news aggregation and personalised news. Flipboard is a bulletproof product on a big growth path. That was the impetus for me looking to reach out to Mike.
Tell me a bit about what happens to Zite.
McCue: Over time Zite is getting closed down, but it will be a seamless transition path for the user base, which includes my own mother.
The tech that powers all of the discovery in Zite will be integrated into Flipboard in the coming weeks and months. People will notice a significant increase in discovery on Flipboard as we roll this out.
Zite has the ability to teach itself what you like as you use it and we are integrating that capability as well. This is important because as we add thousands of new content publishers they will create content of different kinds. We will enable that content to be more readily discoverable by curators.
Can you comment on the terms of the deal? CNN itself reported a value of $60 million.
Estenson: We’re not confirming the number. What I can say is that we bought Zite outright. We advanced it in meaningful ways and it’s much stronger than when we acquired it, and that enabled us to align in a very strategic long-term agreement.
Is CNN taking a stake in Flipboard as part of this?
Estenson: We’re not commenting on any details of the deal, but Mike has agreed to take me out on a date.
Can you tell me anything about comparative user numbers?
McCue: We don’t disclose active users in detail but we do have well over a 100 million activated users and growing very fast. Engagement is extremely good.
Estenson: We’re not breaking out numbers but Zite more than tripled in size in the time that we had it. It’s a meaningful user base but Flipboard’s hand here was to leverage the capabilities of the UI behind the Zite product.
Tell me more about how the advertising will work.
Estenson: The way that this partnership is structured is how Flipboard works with all publishers. There are different arrangements for web share and so on.
Everyone gets to sell this inventory and premium ad executions, but also we will be partnering with Flipboard on new things that are not exclusive to CNN. That’s the key thing. Flipboard has a powerful and unique ad execution and we can help them scale to more users and grow that exposure.
McCue: We are trying to create a platform and ecosystem where publishers feel good about the platform. You’ve got to figure out really great content as the whole world moves to mobile. We format and optimise their content and then we make that content discoverable by repackaging in different ways based on human and algorithmic decisions.
How have ads been performing to date on Flipboard?
Ads perform incredibly well. We’re finding Gucci and Bottega Veneta and other luxury names are buying really beautiful ads, like the ones you’d see at Vogue. Some just value having those ads be seen [as in a magazine] but of course with Flipboard you can also tap to enter a “native” experience with a curated ad opening up more content, such as catalogues. Then you can create your own look books from those.
In terms of our click-through-rates, we are seeing 3 percent and sometimes quite a bit higher, some 7-10 percent depending on the native elements.
Do you feel threatened at all by Facebook’s Paper?
McCue: No. I see it as a different way of letting you look at Facebook. It was inspired by a lot of what we’ve done and it does some content stuff on the side, but it’s not very deep or very broad. What most people do on Flipboard is use it to discover things they really love. Paper doesn’t really do a lot of that. It’s interesting for Facebook but not taking the world by storm, so we don’t see it as any threat whatsoever. Those who use Paper probably still use Flipboard.
Interestingly, we’ve seen an acceleration of downloads since the Paper announcement as some have discovered us as a result.
More acquisitions coming up? More consolidation to come in the personal newsreader/magazine space?
McCue: We’re on the lookout for other teams so that certainly could happen.
Lady Gaga's performance and keynote speech at South By Southwest Festival will be historic for more than one reason. Not only will this mark Gaga's first stint at SXSW, she's also the youngest keynote speaker the fest has ever had at 27 — and the first woman in 15 years.
"I think she's a pretty obvious keynote choice," music festival general manager James Minor told MTV News. "Our festival is known for its diversity and I believe that having her as a keynote follows with that thinking. In the past we've had everybody from Lou Reed to Smokey Robinson to Dave Grohl. We've kept it pretty diverse throughout the years."
Although speakers have, indeed, run the gamut over the years, it has been a while since one of those speakers has been a woman, according to Minor. The last female speaker was singer Lucinda Williams in 1999.
"It's definitely not something that we planned," Minor said. "It's just kind of the way that things worked out. It's about time."
Gaga announced last week that she would be making her very first SXSW appearance with a performance Thursday evening at the Stubb's Doritos #BoldStage.
All proceeds will go to the Born This Way Foundation and tickets will be doled out to fans who undertake Doritos Bold Mission challenges, which include everything from busking to leaping from a platform and nabbing a golden ticket.
Someone just got tix to my SXSW Doritos Stage Show #BoldBravery DRESSED LIKE MY DOPE SINGLE COVER http://t.co/GgGD0FK4fH— Goddess of Love (@ladygaga) March 8, 2014
Minor doesn't know what is expected from the performance quite yet, but he thinks it will certainly be unique. "It's something that she's developing just for that show," he said. "It's a pretty cool situation. She's playing such a small venue."
He's also not sure what will go down during the keynote, which will take place in the form of a conversation led by John Norris of Fuse on Friday at 11:00 a.m. in the Grand Ballroom of the Hilton Austin-Downtown.
"I have no idea what to expect," Minor said. "But I'm excited."
What do you think the ARTPOP singer will say come Friday?
The buzzy new app Secret — which lets people post messages to their circles of contacts without attribution — has closed a $10 million round of funding at a $50 million post-money valuation, TechCrunch has learned from two sources close to the situation. The funding was led by Google Ventures, with participation also from KPCB.
The news follows a report from Friday in the WSJ, which noted the company was in the process of raising a round of money. It accurately reported the potential backers and funding amount at a $40 million pre-money valuation; we’ve learned that post-money valuation is $50 million, and that the term sheets have already been signed.
It’s a healthy sum of money and valuation for a relative newcomer.
Secret launched at the end of January — amid a rush of many other apps like Whisper, Wickr, Confide, Telegram, and more — some of which were inspired to protect users from the sneaky ways of the NSA, some of which are catching on to a bigger trend for more user privacy.
Secret is currently only available on iOS in the U.S. and Canada. So far its highest ranking was on February 7, when it reached No. 16 in the social networking category (130 overall), according to App Annie. As of March 8, its ranking in social networking stands at 81 (1,143 overall).
Co-founded by David Byttow and Chrys Bader-Wechseler (respectively with Square and Google pedigrees behind them), the idea behind the app, as Byttow has explained it in the past, was to create a forum where people can feel free to speak their minds about one thing or another that a social network with more identification and accountability like Facebook or Twitter may hinder*, for fun but maybe also just to get a point across. Anonymous feedback, in other words.
In its current form, Secret has captured the attention of early adopters/tech enthusiasts. But that hasn’t always been in the most positive light, with false rumors and not a small dose of slander among more salacious, frank, funny and mundane posts. Honesty may be the best policy, but when you don’t have to put your name to it, is it the policy all of us will always follow?
The startup has had a boost of attention in the last few days around the SXSW confab in Austin, possibly because people have been actively hunting around for the next big thing à la Foursquare and Twitter’s coming-out parties of years past, but possibly just because of new features. Secret added social sharing and nearby gossip to the app, as well as an online message board dedicated to SXSW that anyone can access (the illustration for this post, with a picture of Byttow on stage at SXSW, comes from that board).
Taken together, the three additions are early signs of how Secret is already starting to branch out from more closed beginnings focused primarily around your own contacts. Location-based gossip, cross-posting to other networks and theme-based boards all point to other ways that Secret may not only build up conversations and interest groups, but (in my opinion) also potential commercialising opportunities.
In Byttow’s on-stage interview on Saturday with TC’s Josh Constine, the Secret CEO mentioned a couple of key points that are also worth remembering as we watch the app evolve. Currently only around 10%-20% of Secret users are creating content, and that anonymous may mean without a name attached to it, but it “doesn’t mean untraceable.”
In other words, we are in very early days of seeing how this evolves, and even if it looks on some level like the anti-Facebook, it’s still following some of the rules of social engagement we have seen elsewhere.
And even if it feels a bit like the Wild West right now, is that bound to change? Byttow says that already there is an effort to “quarantine” certain posts (similar to how commenting system Livefyre lets moderators “Bozo” posts so that a user thinks they are live, but actually no one else can see them), and lewd content gets taken down — although there is a grey area here, apparently.
Still, you can’t help but wonder when and if consumer interest, commercial focus and potential litigiousness may collide.
Both Google Ventures and Kleiner Perkins also invested in Secret’s $1.43 million seed round, alongside Initialized Capital (the JV formed by Y-Combinator partners Alexis Ohanian, Harj Taggar and Garry Tan); SV Angel; Index Ventures; S-Cubed; Brett Slatkin; Harry Cheung and Fuel Capital.
* Yes, Facebook is moving away from insisting on real-world names, and Twitter has a long history of accounts not associated with specific people, but the idea here is that Secret lets you keep a connection to your circle of contacts — based on names in your phone’s contacts — without your identity attached to it. If you create an “anonymous” account on Twitter or Facebook, you’ll have to forge a group of followers without the crutch of a preexisting social graph.
Secret declined to comment for this story.
Updated to clarify the post- and pre-money valuations.