Early last year, "checking in" was the cool new craze. No visit to your favorite tech news site could be had without getting buried in an avalanche of articles about Foursquare, Gowalla, Loopt, BriteKite or a myriad other startups. The big guys quickly followed suit: Yelp introduced "Check-Ins" while Facebook launched "Places" and most recently, Google Latitude updated to incorporate check-ins and check-outs. But here's the thing: the trends aren't actually that good.
Let's look at Foursquare and Facebook. First, there's no doubt Foursquare is throwing off some impressive numbers (e.g. the company's recent announcement of 8.5 million users). It typically announces total, rather than active, users and that number is roughly growing linearly at present. Total users, by definition, of course, only goes up - yet according to compete.com, Web traffic has declined for five consecutive months, amounting to a 50% reduction in traffic over that period. And while traffic isn't the best indicator of usage, Web visits should be just as likely now as five months ago, and it's certainly not a positive sign of rapid growth in usage.
In July 2010, Foursquare had 2 million users performing 1 million check-ins per day. By the end of the year, that number had risen to 5 million users performing 2 million check-ins per day. Impressive growth, yet this means check-ins per user declined from 0.5 per person to 0.4. It also suggests that many of those five million users aren't active.
The trend for Facebook Places is even worse. Facebook had at least 30 million members check in at least once in a shorter time frame as a newer service with a larger built in user base. Yet Facebook Places offers even less value than a Foursquare check-in. There are no points to win and no discovery element like tips; it's just a flat statement that, "I am at Starbucks." As a result, early indications are that Facebook check-ins strongly lag Foursquare check-ins.
The other day, I checked in for lunch at the Ace Hotel in New York City, an epicenter of the digital elite, and, according the Foursquare, the single most checked-into hotel in the world. The place was packed and I could barely get through the door, much less find a place to sit down. Yet, over the course of my two-hour stay, only three other people checked in.
Why Check-ins Are Going to Falter
In 2011 check-ins are going to go the way of the eight-track tape and disappear. You probably already see this happening. How many of your friends are consistently checking in and broadcasting? How many "I just ousted Fred as the mayor of Starbucks" messages do you see in your stream? Across my network - a large and tech-savvy network - I see less than 1% of people checking in on any service, and the trend is down. Some people are undoubtedly checking in privately, but that has major (negative) implications for how a service can spread.
Both Yelp and Facebook have the advantage of huge audiences who visit the services with a clear purpose. People are on Facebook to socialize, and on Yelp looking for a great restaurant. Check-in services aren't going to replicate this scale or focus of audience in the short run, making it hard to make check-ins a mainstream activity. A number of check-in services have effectively already thrown in the towel; BriteKite abandoned its check-ins entirely and Gowalla integrated itself with Facebook and Foursquare check-ins.
All of this doesn't mean, however, that Gowalla, Foursquare, MyTown, Loopt and all the services with check-ins at their core are necessarily going out of business. It does mean they need to find a way to deliver deep value to people beyond the check-in. And unless Facebook and Google provide more value than they currently do, their check-in services will languish as well.
Let's take a look at why check-ins are going to falter and then explore some areas for delivery of deep, lasting value.
Why do people check in? Why should they?
- Finding people near you, a.k.a. serendipity: When your friends happen to be at the same location, it's like magic. Especially useful at conferences, this is check-ins at their best.
- Points and the hoped-for rewards: Whether it is rewards on SCVNGR or deals on Foursquare, people hope to get a discount: a free appetizer, a dollar off coffee. These deals are in their very early stages on location-based services.
- To remember things: In new cities or new venues, I'll often check in (privately) just to remember the place I went. Marshall Kirkpatrick has discussed this use case as well.
- Personal branding: While most people wouldn't use this term, it is what's going on. People are creating a personal online identity for themselves, showcasing who they are by telling everyone what they're doing. (Less charitably: they're bragging, and I'm just as guilty of it as most).
Here's why none of these are going to lead to significant growth for the LBS players.
- The serendipity factor is very much a creature of big cities, certain demographic segments, and New York in particular. If you're in New York, where all your friends are within 10 blocks of you and can quickly get from one location to the next, this is actually awesome. But it's not so hot in big cities like Los Angeles that are too spread out for these serendipitous moments to happen.
- Games are fun for about two weeks, but most don't have staying power. Like a lot of folks, I really dig Call of Duty: Black Ops, but I can only kill so many zombies before it's time to do something else. Games are a novelty and have a very finite shelf life. So long as check-ins are "just a game", they'll be subject to the short life cycle of a game.
- Remembering things holds promise of long-term value; a digital memory bank of places I've been could be really handy. It's just not clear that most people really need it. Unless you spend all your time traveling and going new places, there's just not that much to remember.
- Personal branding is most common amongst the digital elite - the bloggers, social media mavens, tech execs (ok, I plead guilty). Outside a niche set of people who want the personal branding (or ego boost) of the check-in, most people not only don't want to check-in, but they don't know why they should. Most women I talk to are creeped out by broadcasting their location.
Photo by KecMec
How do check-in services go mainstream?
Today, check-ins are mostly the purview of the tech savvy. What would drive the general population to engage on a sustained basis?
Socializing. If I see my friends doing it consistently, I might do so as well. Yet (at least on Foursquare), more and more people are checking in privately, choking off a key viral loop. Finding a way to socialize where you are or where you'll be in a way that isn't simply annoying, and has the right privacy model, is key.
Deals. If I can regularly and repeatedly get some kind of economic value from checking in, I'll probably continue to do so. But there are big challenges for location-based deals. Groupon has a reach to local businesses (through their sales force) that far outstrips anyone except possibly Google or Facebook. A lot of businesses have broken their pick trying to sell direct to hyperlocal businesses at national scale. The deals also have to be substantive enough to change behavior.The power and the limitation of check-ins is that they're after the fact. It's powerful because you, the system and the local merchant know exactly where you are, in the moment. The downside is that check-ins don't really help you decide anything.
If I'm a Dunkin' Donuts zealot, for instance, I'm probably not going to change my behavior and go to a Starbucks just to save $1. Location-based deals reward decisions already made. If I'm already at Starbucks, why do they want to offer me a deal? It may reward behavior, but doesn't incentivize it.
Having to be on-location to get a deal limits the reach of a deal, and doesn't drive foot traffic. I just got the world's best Groupon (for a book lover like me): $10 off $20 at Barnes & Noble. This is going to drive me into a store. But I can't find that deal on Facebook or Foursquare because I'm not anywhere near a store right now! The brilliance of Groupon is surfacing the deal before you've made a decision, and generally only costs the business money when it has product additional foot traffic to the store.
Photos. Photos being shared in the moment by location could tap into one of the key early drivers of Facebook growth photo sharing, and seeing what you're friends are up to. A photo is way more powerful than a cryptic Twitter post about a check-in. Foursquare's new photo capability will be interesting to watch. But, with Facebook I can already share photos in the moment and don't really need Places to do that.
Discovery. The power and the limitation of check-ins is that they're after the fact. It's powerful because you, the system and the local merchant know exactly where you are, in the moment. The downside is that check-ins don't really help you decide anything - they simply recognize and broadcast a decision you've already made. If you're trying to decide where to eat or what concert to go to, a check-in doesn't help. If you are an advertiser trying to influence behavior, you want your message presented before the decision is made, not after, which is when the check-in occurs.
The larger check-in services have yet to empower real discovery. But if Foursquare's app was encouraging me to broadcast where I will be checking in this weekend, or showing me which sushi spots had the most check-ins, that could be extraordinarily powerful. But they've not really done that yet.
Facebook Places is even more limited. Have you ever tried to find a "Place" in Facebook? The mobile apps will let you broadcast your location and not much else - there's no way to explore or find new locations or get recommendations from your friends. Nor does Facebook Places give you a way to let your friends know what you will be doing, only where you are now. It is all after the fact.
In 2011, a service that's just about check-ins is going to struggle (best case) or die (worst case). Those that succeed need to find a stronger motivation than badges and self-branding to thrive. That might come in the form of coupons and discounts, but that will run into trouble with the likes of Groupon and Facebook, both of which have far larger distribution. It might also come in the form of some kind of recommendation or discovery service, or personal journaling. Foursquare's new Explore feature is a step in this direction.
There's real opportunity here, and the check-in services have a lot of data they could harness for this. But unless "normal" people find direct, personal value in the service, they're not going to adopt it and the service will remain as a toy for the tech-obsessed.