The recent management shuffle at one of the pioneer companies in the development of location apps is not to be ignored around corporate circles. The now former CEO of Foursquare, Dennis Crowley, who was also the company’s co-founder, recently voluntarily gave up his position as the Chief Executive Officer and stepped down. The company’s chief executive role was passed over to Jeff Glueck, who had been its Chief Operating Officer for the past year and half.
Dennis Crowley had served as the Chief Executive Officer since he cofounded the mobile-location data company in 2009. He now assumes the position of the company’s Executive Chairman. Jeff Glueck, who previously worked as a CEO at Skyfire, (a software company) and the Chief Marketing Officer at Travelocity, now assumes the day-to-day operations of the company as its Chief Executive Officer. The location-based app company also named Steven Rosenblatt, who previously held the position of the Chief Revenue Officer, as its president and promoted Kinjil Mathur to the position of Chief Marketing Officer and Jonathan Crowley to the position of Vice President, products.
Foursquare was one of the first companies to take advantage of Apple’s iPhone location services, allowing its users to find and ‘check in’ in restaurants and other locations such as stores, from their current locations. Speaking to the New York Times regarding his decision to relinquish his position as Chief Executive Officer and to opt for the Executive Chairman’s role, Crowley said that he believed it is important for Foursquare to be run by executives who have previous experience scaling companies. He also made a blog post, indicating that he believed that Foursquare “is in great hands with both Jeff and Steven at the helm and our company is fantastically set up for success”. He further stated that his new position will allow him “to focus full-time on vision and innovation, long-term strategy and creating new consumer products. If this sounds more like my job from 2010 than my job from 2015… well, that’s the point. It frees up my time from operational and management duties and allows me get back to the ‘let’s just make something awesome that people love’ spirit that got us here.”
Crowley also stated that the reshuffle will give him time, as the Executive Chairman, to lead the company’s vision without day-to-day distractions.
This reshuffle in the company’s management coincided with a 45 million dollars funding round led by Union Square Ventures, which has been a long-time and ardent supporter of Foursquare. Foursquare indicated that it will channel the new funding to building the app’s location data-based advertising products and its business selling data on consumer behavior to developers, such as Twitter and Pinterest. Furthermore, the new Chief Executive Officer, Jeff, made a blog post stating that the company expects this latest funding will aid its plans to fill 30 new positions, ranging from sales to engineering and other functions.
However, something to be noted is that this funding by Union Square Ventures also came at a time when Foursquare was valued at 250 million dollars. This is obviously a clear and sharp reduction from an earlier valuation in 2013 which valued the company at 650 million dollars, more than half of the earlier valuation.
Basically, the reshuffle and the cash injection by the angel investors comes after a critical year for the company, during which it made an effort to move from a consumer-product to an enterprise service generating real revenue. Moreover, stiff competition from major social media companies such as Facebook is set to stifle the growth of a company such as Foursquare, and this is a fact that cannot be ignored. Furthermore, Foursquare’s reliance on other companies such as Apple and Twitter, rather than focusing on creating its own brand, may come as a major hindrance to its growth as a company.
Enthusiasm for the company’s service went down as other companies including Facebook and Instagram built location services into their own apps. Many people also questioned the value of just checking into restaurants and other spots. Foursquare tried to resolve that issue in 2014 by splitting its services into two : Foursquare to be used for recommending restaurants and other venues, while a separate new app, called Swarm, would be for check-ins.
Not all hope is lost, though. The company’s apps and websites draw 50 million monthly users and more than 100,000 developers use Foursquare’s location data. Furthermore, the funding by Union Square Ventures is a clear indicator of investor confidence in Foursquare and its new management. The funding can also be refereed as a “down funding”, a term used in investor circles to denote companies that are forced to raise funds at lower valuations, as compared to times in the past when they raised funds at much higher valuations. This is an indicator that the Foursquare is struggling to monetize its business.
What now awaits is to see whether the reshuffle will pay off. The new Chief Executive Officer, Jeff, has the requisite experience in the field of technology but unless the company makes efforts to establish itself as an independent brand, (rather than relying on other companies) and to explore other avenues, (other than just “checking in”), then the reshuffle is set to have very little effect in its growth and the company.