I've been discussing "morphing" a startup in recent blogs.
Morphing a startup is all about movements and focus.
My blogs on startup morphing are aimed at delivering special tips to founders of today's startups -- because they are under very intense (read that as acute) pressure in this current era of "rapidly scaling startups". Investors (and increasingly experienced startup employees) expect a founder to swiftly move from initial idea into an established new enterprise that moves swiftly upward in users and revenue. If not, they start moving to the exits. Life has become very impatient for slow moving founders.
So I thought I'd pick apart today's story about the latest change at startup Foursquare and list a few tips that might add to your skill set as leader of a new enterprise.
FOURSQUARE STORY OF THE DAY
Here is the story headline from TechCrunch: "Foursquare Outgrows Mobile, Wants to be Your City Guide".
Here are some things to ponder that I noted in the blog:
- Startup Morphing is a continuous process. Note how the company has moved on from its initial catchy "check-in" feature:
"The Foursquare.com site redesign is the third major product development that aspires to move Foursquare beyond the check in; The company recently launched Explore to derive value from all the checkin data it has accumulated over the past three years, then Radar which allowed users to take advantage of that data with minimum effort."
A serial entrepreneur I respect recently remarked to me that Foursquare had shifted from a generic location based service into "a place people go to brag where they have been."
- Startup Morphing is focused on generating user-driven revenue growth. That means the number of unique daily users must remain loyal, continue growing (faster than competitors) with new ones arriving by the hour, and be attractive to advertisers and merchants.
"One million daily unique visitors is a terrible thing to waste."
So the company has been adding more features aimed at keeping existing users clicking on the service, while the new offerings become more and more attractive to hesitant users. "Growth, growth, growth" that 's the mantra chanted by Foursquare founders 24x7.
- Startup Morphing demands that Marketing figure out how to convert user clicks into Revenue. The next trick is to convert a growing number of users into real $$$$$$ in the form of revenue. That's the job of Marketing.
Now Foursquare Marketing has made a major change in the focus of the business: The new New is focused on leaving "check-in" behind and moving on to being a "city guide service".
"And it just might succeed too, with the wealth of more than a billion checkins from which to draw conclusions about the destination predilections of its ten million users, “[We want to do whatever] we can do with this data to make people more aware of the world around them in real-time and geographically relevant way,” Foursquare Head of Product Alex Rainert said as he gave me a tour of the site earlier."
- Startup Morphing changes the branding of your business (and thus is frought with risk). Foursquare owns the word "check-in" and always will (Search = Google, etc.). But now the company wants to become The Gorilla of "Your city guide". That is definately a move, a big move. And it is into a market that is crawling with solutions (search for "city guide mobile" and you'll get 53 million items). And if you add to the search "recommendations" you run into another crowded space. Yet that is what the Foursquare is going to do next.
Foursquare is making a concerted effort be more than just an app for checkins, as we and every other person who covers this stuff has noted before. The difference here is the mobile-first startup is expanding its horizons way beyond its iOS roots in order to become a location-based city guide and recommendation service, sort of moving towards Yelp while Yelp ironically moves towards Foursquare.
The danger is that these moves create a generic city guide out of the Check-in King, one whose unique appeal ("bragging"?) is lost to a not-so-exciting-city-guide.
But if successful, we might find ourselves observing an new category of "recommendation-based city guide" or something along those lines (web and mobile accessed). The growth they are seeking might be there. I for one am forever amazed how much time I have to take to research a city I am going to visit in order to add a bit more enjoyment to my time there. Perhaps this New Foursquare is my solution.
- Startup Morphing calls for guts, soul-deep courage. . . Or reveals ignorance. Marketing branding is based on end users instantly recalling one simple thing when they think of your name (that's what becomes branded by that single, special thing: Social Networking = Facebook). To loose that indentity with that single thing is death to a brand (what is a Sony?). To keep that identity is central to creating a brand that is recalled by your Ideal End Users.
Thus there is a critical trick to morphing from that initial branding focus: each move has to build onto that focus, that word, and thus retain in the end user's mind the identity that has been earned and that is the reason for millions of clicks/uses on/of the service. That takes guts, real courage.
So I commend Foursquare's leaders. They have made a major move with boldness. That reflects the intensity of their personal drives and ambitions, and their guts and courage. It also resonates the intensity of competition that surrounds them, competition that is moving daily, attempting to encroach on Foursquare's success in its current space (market segment). It is a story unfolding, well worth watching and learning from.
BOTTOM LINE: Startups that move from an entrenched market position into a crowded space have to have leaders wise in strategic planning and skilled in execution of bold moves. That happens to be central to what serial entrepreneurs are very good at ("brilliant"). Studying moves made by new market leaders can teach you how to gain such abilities. When you can do Startup Morphing, you are well on your way to building an unfair competitive advantage.
I wish you The Best on your Adventure!