The Games Businesses Play with Customers by briansolis

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Part four in a four-part series on innovation and change as the new schools of business management Dennis Crowley founded Dodgeball, mobile 'check in' technology 10 years ago which eventually became long and forgotten, but gave rise to a new creation many years later. Crowley came to find a new version of his Dodgeball entitled, Foursquare.

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By Brian Solis, industry-leading blogger at BrianSolis.com and principal of research firm
Altimeter Group, Author of the highly acclaimed book on social business Engage!




Part four in a four-part series on innovation and change as the new schools of business
management…

As a child, you most likely played two very popular playground games, dodge ball and four square. If
you’re an adult who is also an early adopter of emerging mobile applications, chances are you play
them once again. The difference is that this time a mobile phone takes the place of a ball and it’s
usually not hurling toward you.

Dennis Crowley knows a thing or two about both games. In fact, he’s re-imagined them for the
mobile and social markets as a way of connecting people both online and also in the real world.
Crowley is a tireless advocate in the concept of geo-location social networks and the idea of using
mobile technology to “check in” to physical locations. He earns the tag “tireless” because his first
foray into check-ins dates back a decade. Dennis Crowley and his co-founder Alex Rainert started
Dodgeball in 2000 to transform mobile devices into a platform where users could text their location to
reveal friends, friends of friends and interesting venues nearby.


Playing a New Game




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Looking back to that year, much of the world wondered whether or not the now infamous Y2K or
Millennium bug would cause a system-wide and worldwide meltdown of digital information. Even
though computer systems and our data safely made the transition from 1999 to 2000, the U.S.
economy didn’t fare so well. The dotcom bubble burst and the historic stock market crash that
ensued caused the loss of $5 trillion in the market value of companies from March 2000 to October
2002.

While the dreams and hopes of many entrepreneurs were dashed during these uncertain times,
others, such as Dennis Crowley and Alex Rainert, sought to break new ground. Before Twitter and
even before Facebook enchanted the world to start social networking, the pair ushered in a new era
of geo-location social networks and introduced us to the act of digitally “checking in” to physical
locations.

At the time, Crowley worked as an analyst at Jupiter Research and Dodgeball would serve as his
thesis project at New York University’s Interactive Telecommunications Program. The platform
initially found adoption among the New York tech elite and generated a significant amount of
underground buzz.

Dodgeball fever eventually caught the attention of Google and in 2005, Google acquired the five-
year-old startup and ultimately employed the founding team. With Google now behind the Dodgeball
brand, interest was piqued, causing a torrent of adoption among the digerati. While usage was
growing within tech capitals around the country, Dodgeball was unable to secure the interest of day-
to-day mobile phone users. When Twitter emerged in 2006, attention focused elsewhere. And
without support from Google, Dodgeball faded into obscurity. Crowley inevitably left Google in 2007,
not on the best of terms either. While loyal users kept the service alive for another two years, Google
eventually pulled the plug and officially killed Dodgeball in 2009.

In reality Dodgeball was one of the first mobile social services in the US. While it was ahead of its
time, it would reveal the birth of an entirely new kind of social network, one that wouldn’t see its first
true mainstream adoption until almost a decade after its debut.

Game Theory: A New Look at Mobile Commerce

Fast forward to the present. While Google focused elsewhere, the competition for geo-location was
heating up. Twitter was slowly garnering mass appeal, but rather than compete for location, it
evolved into a real-time communication network. Other services such as Loopt and Brightkite were
carrying the torch for geo-location networking while Google transitioned its Dodgeball service into
what we now know as Google Latitude.

In March 2009, Crowley and Naveen Selvadurai founded Foursquare, which one could view as an
evolved Dodgeball 2.0. Crowley and company knew that the key to unlocking the true promise of
geo-location networking lay beyond connections, the location of friends, and the act of checking-in to
local establishments. In order to attract users and convert them into evangelists, Foursquare would
have to empower the “me” in social media.

“The inspiration behind Dodgeball was based on the idea of carrying a map in your pocket that
shows everything about where your friends are and where they’re going. With Foursquare, the
question now was, if you have this map, how can you crowdsource everything a city has to
offer…taking the experiences of your friends in an offline world and bring them online so other
people can discover them.”




(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
The Foursquare experience starts with checking-in to a location via a mobile phone using the free
Foursquare app. Users could easily share their location with friends and also see who’s nearby.
Instead of sending Tweets like Twitter, Foursquare players could “shout” out to one another to share
experiences and observations. Check-ins and shouts can also syndicate to Twitter and Facebook to
unite multiple networks with one action. But, that’s only the beginning. This time, Crowley and team
employed a clever system governed by game mechanics evoking a spirit of competition propelled by
a reward system that coaxes active and deeper participation.

Game On

Foursquare was developed to change how people experience the world around them. As Crowley
explains, “I thought a lot about the amount of time that people spend creating and curating their
online persona. We wanted to create a network where people could connect and socialize online
around the activity that they’re already doing in real life”

Crowley also revealed why check-ins emerged as a foundation for a new dimension to the social
economy, “When people check-in, we know that a person goes to any given place and that they’re
there with these people, and we look at how this place relates to the other places they’ve been to in
the past. It’s now giving people digital breadcrumbs to leave behind as a reminder, but also to share
with others. When people go back to those establishments, it creates an even richer dataset that
inspires us to create new products to encourage engagement and exploration.”

With the introduction of gameplay, points were now earned for all previous activity as well as the
introduction of new gaming elements, each of which contributed to a local leaderboard. In addition to
points earned for check-ins, shouts, etc., players were encouraged to also leave tips about each
location to help guide the experiences of others. And, the more players checked in to each
establishment as well as greater varieties of locations, Foursquare would unlock hidden badges as
rewards. These rewards ranged from prestigious mayorships for each location to achievement
badges commensurate with the experience.

Why is this innovative?

First, it was addictive. In its first year, Foursquare attracted its 1 millionth user. In just a year and a
half, Foursquare skyrocketed to over 3.5 million users with over 20,000 new users checking-in every
day. But it’s also so much more than that. The act of checking-in ushered by Crowley dating back to
2000 was now ubiquitous. Competitive social services such as Yelp, Gowalla, and even Facebook,
also introduced the ability to check-in to places within their respective networks.

Foursquare Brings the Yellow Pages to Life

Not only are check-ins done to notify friends of an individual’s current location, these random acts of
patronage have now become a form of social currency. The check-in has already evolved into formal
personal endorsements, with repeated check-ins practically shouting out, “I highly recommend this
place!” Check-ins as a form of social currency also redefined the role of the patron and the
relationship between businesses and customers.

“The network started to take on a life on its own. Foursquare gave everyday people, venues, and
local merchants a voice. It opened the doors for businesses see a whole new way of seeing their
customer.”




(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
Crowley envisioned a new dynamic between people and also between places and people and as a
result, introduced a working archetype for consumer empowerment and also customer engagement.
He created a new channel where customers create a community around each business. And, as a
result of people earning points, leaving tips, winning mayorships, or simply checking-in, business
owners awoke to an already vibrant and still growing customer base that now expects their
participation and attention. Essentially, Crowley handed business owners the keys to open the doors
to social media and fresh business opportunities.

Crowley and company realized that business owners would ultimately benefit from the consumers
who were willfully checking-in to their location. As such, businesses would have to jump into the
game to steer experiences, encourage points and mayorships, and the creation of helpful and
beneficial tips. Crowley and team then focused on empowering businesses by developing tools that
gave merchants more control. And, more importantly, they gave businesses the ability to activate
their customers through social specials, promotions, and rewards to further entice visits and
commerce.

Online Check-ins Lead to Real World Commerce

Local businesses such as AJ Bombers, a popular burger joint in Milwaukee, are realizing increased
business as a result of offering free burgers for mayors and free cookies for adding tips. They’ve
also offered dedicated badges to guests who attend special events all organized through Foursquare.
Larger chains are jumping in as well. Starbucks offered discounts or free products for mayors and
subsequently noticed a 50% increase in check-ins. Recently Old Navy experimented with offering
25% off coupons simply for checking-in. As a result, many consumers did just that. Consumers also
took to Twitter and Facebook to share the news of the promotion acting as a surrogate sales force or
a digital street team designed to trigger foot traffic.

“The activity in Foursquare gives local merchants special insight behind the check-in in order to
improve customer relationships, such as understanding who these people are, how often they visit,
where else do they go, do they come in with certain friends, etc. It also helps merchants learn who
their best customers are and how to ultimately help everyone become their best customer.”

Doing so connected people online and offline, brought local establishments to life in a highly popular
digital domain, and also put the customer front and center of the business owner, forever changing
how companies think about the people they serve.

With Foursquare, Dennis Crowley reimagined what Dodgeball could be and built an ecosystem that
is growing in popularity to the tune of over 20,000 new users a day. And, the company celebrated its
200 millionth check-in this past October.

The company has already fielded acquisition offers from the likes of Yahoo. It was also rumored that
Facebook was entertaining the possibility playing Foursquare as well. Instead, Crowley and the
Foursquare team closed a second funding round of funding at $20 million led by Ben Horowitz of
Andressen Horowitz.

The work is only beginning though. As Crowley explained, “As a startup, we have to continually
focus on developing the ecosystem that we’ve created. And it’s not just about consumers; we’re
developing solutions for merchants as well to encourage people to check-in more. This is about
changing the way people experience the world around them.”

The evolution is far from over, but it has seen validation lately. Local reviews network Yelp and now
800-pound gorilla Facebook have entered the business of checking-in, to which Crowley responds



(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
with open arms, “Facebook doesn’t keep us awake at night, but it does inspire us. They’re validating
the market, but we’re still focused on innovating and growing our ecosystem.”

In the end, Crowley’s vision is clear and focused. The future of Foursquare will focus on transforming
how people experience their world online and offline, “Foursquare is about improving relationships,
making cities easier and more fascinating to experience, and making the world a more interesting
place to explore.”

Have you checked-in to the future of business?

Introduction: The Innovator’s Dilemma
Part 1: Jack Dorsey, Twitter and Square
Part 2: Zappos’ Tony Hsieh Delivers Happiness Through Service and Innovation
Part 3: Dennis Crowley, FourSquare

Connect with Brian Solis on Twitter, LinkedIn, Facebook




(cc) Brian Solis, www.briansolis.com - Twitter, @briansolis
Brian Solis is principal at Altimeter Group, a research-based advisory firm. Solis is
globally recognized as one of the most prominent thought leaders and published
authors in new media. A digital analyst, sociologist, and futurist, Solis has studied and
influenced the effects of emerging media on business, marketing, publishing, and
culture. His current book, Engage, is regarded as the industry reference guide for
businesses to build and measure success in the social web.




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