/// Is Foursquare’s Dennis Crowley the Pied Piper of Silicon Alley? (AdAge)

August 8, 2011  |  Blog

Charismatic CEO Is Big Reason Why Foursquare Is Toast of the NY Tech Scene, Despite Little Revenue

On a bright Wednesday afternoon this past June, Dennis Crowley, co-founder and chief executive of Foursquare, hailed a cab across the street from his downtown Manhattan office. Inside, he pulled out a deck of Foursquare stickers and quickly slapped one on the vinyl wall that separates the driver from the passenger. Does he do that in every cab ride? “Only if I happen to have stickers,” he said, “which I usually try to have on me.”

It’s all part of Mr. Crowley’s quest to tell the story of Foursquare, his two-year-old startup that now employs 75 people in two offices and lists over 500,000 merchants and 2,500 brands. In the two years since he founded the company, over 10 million people have used the service to mark their presences on venues across the globe with the declarative “check in,” the latest media habit to enter the lexicon along with “friend” and “follow.”

But despite his lightning success, Mr. Crowley rarely misses an opportunity, no matter how minor, to market his brand. Last winter he starred in an ad along with co-founder Naveen Selvadurai for retailer Gap that became a kind of grudging emblem of the New York technology scene: It was received with both a detached irony and a tacit pride – we’ve arrived, was the underlying sentiment. It was the same treatment given to an earlier generation’s arbiters of New York City cool: the founders of Spy Magazine.

But unlike that earlier media experiment, Foursquare is a well-funded enterprise with $71.4 million in backing, a $600 million valuation and early adopting brands such as Pepsi, MTV and American Express as partners, making it one of the most closely watched start-ups in digital media today. The company also recently entered the group buying space, signing deals with Groupon, LivingSocial, Gilt Groupe and others. Top-flight investors are hoping to get in on its next round of funding. International users are clamoring for more venues to check into. The company can’t hire engineers fast enough. Oh, and one other vital fact: Foursquare also has little revenue to speak of.

WHY DO PEOPLE CHECK IN?
While it may be curious that advertisers, investors, and Foursquare’s ever-growing horde of users continue to maintain faith in the company’s fortunes, this allegiance has almost entirely to do with the enchantments of a single person: Mr. Crowley. He is part of this late generation of entrepreneurs — showmen and polymaths, ringleaders of a geeky, sometimes awkward sort who dominate whatever conversation they’re having. But unlike other internet celebrity founder-CEOs — Facebook’s Mark Zuckerberg or Google’s Larry Page — Mr. Crowley isn’t a master of computer science or an impresario of technology. His particular talent, according to those who know him, lies in his awareness of something his more highly remunerated contemporaries are often criticized for lacking: how media works.

“I’m not an engineer,” he says. “I tell the story. That’s what I do.”

His early boss in the ad business agrees. “He’s one of the best storytellers of his generation,” Michael Duda, the ad exec and entrepreneur, tells me. “He comes from a marketing-journalism background, and he knows how to tell a story and killer products tell a great story.”

Mr. Crowley interned for Mr. Duda at Kirshenbaum Bond + Partners while he was a journalism undergrad at Syracuse University. He later switched to advertising department when he saw that it was “doing more advanced things online than journalism, which was still just posting up web pages.”

The entrepreneur put that on display one afternoon in his office, talking about his company: “The reason for Foursquare is, ‘Why do people check in? What do you offer on that screen afterward? Do you offer a game? Do you offer specials, or some kind of tips, or some other surfacing information? It’s designed around that lets-make-the-real-world-easier-to-use idea,” ” he said.

Soon after its launch Mr. Crowley started realizing software could actually influence people. “So if you say, ‘You can only get this badge by going to 50 places you haven’t been to before,’ it encourages people to go find new places, or ‘You can only get this badge by going to different movie theaters,’ and people will seek out those theaters…. We’re augmenting your life through software,” he said.

‘INTENSELY SOCIAL ICON’
Mr. Crowley, 35, who stands a few inches shy of six feet, is partial to T-shirts and jeans, and his floppy haircut drapes over his sweetly gnomish face, altogether lending to his air of friendliness. According to friends (and Foursquare), he also likes to go out — a lot. He prefers the fried pork chop at Brooklyn eatery Buttermilk Channel. He plays skeeball at Ace Bar. He does a summer share with friends in Montauk where he surfs but stopped recently after encountering a shark. “Very freaky,” he said. He plays soccer in a pick-up league and has recently taken to training for a triathlon. He has 539 friends on Foursquare, and given his prolific hand at building friendships, chances are they’re all palpably real. He’s a shy but garrulous beast, an “intensely social icon,” according to Frank Lantz, a professor and entrepreneur with whom Mr. Crowley had worked with. “He wants to meet up with his friends on the spur of the moment and have drinks and have fun and that’s what he’s motivated by,” he said. “Crowley wants to be surrounded by people. It’s, ‘Hey what’s going on tonight? I don’t know, let’s check in with Dens.’ Crowley was always well provisioned for social events.”

That kind of where-is-everyone-else paranoia has always infected New Yorkers to the degree that it has become a kind of unspoken game of the city: As everyone ventures out to their respective scenes they’re all saddled with the thought that there’s probably a better party going on elsewhere. That kind of cynical read on urban life, however, is hardly Mr. Crowley’s metier.

“He’s genuinely interested in social systems and how gaming affects life,’ said Sarah Simmons, a close friend who introduced Mr. Crowley to Mr. Selvadurai a few years ago. “Not in a nerdy way, but how it moves into real-life situations. How it can change the way people think. He’s been thinking about this for years.”

Before Mr. Crowley started Foursquare, before he was a celebrity entrepreneur, he was a New York City resident who liked going out, and as he explained to me one afternoon the original motive behind Foursquare is fairly humdrum, or decidedly analogue – Time Out New York, the weekly magazine listing events in the city.

“I’d basically be ripping out little squares from it and stick them in my wallet — the places I want to go and try out,” he says. “And then I thought, ‘I just wish there were an easier way to do this.’ But also to know if my friends had been there or if they were out there right now.”

‘THIS IS THE PLACE I NEED TO BE’
Mr. Crowley grew up in Medway, Massachusetts, a leafy township an hour outside Boston where he would “cut paths in the wood.” After graduating Syracuse he came to New York to feed off of its can-do-nothing-wrong tech boom of the late Nineties, only to see it implode a few years later. He then considered applying to business schools until a friend invited him to New York University’s Interactive Telecommunication Program’s bi-annual art show where he saw, among other projects, “this woman who had three robots following one another….No purpose whatsoever, just technology for the sake of doing it, and I was like, this is the place I need to be.”

But after two weeks, he almost dropped out, thinking it was “too arty.” His parents insisted he stay, and a few months later he met Alex Rainert, a fellow student with whom he would later construct their thesis project. That turned into the company Dodgeball, a texting-based version of Foursquare that was eventually sold to and then shuttered by Google.

To those who know him, Google’s summary dismissal of what was a heartfelt media enterprise, was painful for Mr. Crowley. “It was one of those things you could see really upset him,” a friend said. Dodgeball was a mobile application at a time when mobile media was in its embryonic stages, and Google took notice. It bought the company in May 2005 and Mr. Crowley and Mr. Rainert were hired as part of the acquisition. Dodgeball, however, never hit more than 75,000 users, and Google never supplied engineering resources to the project. Frustrated, Messrs. Crowley and Rainert left after two years, both with a bit of a financial cushion. Mr. Crowley declined to say how much Google paid for what was essentially his graduate thesis, but people familiar with the deal say Google spent in the high seven figures for Dodgeball, not an uncommon figure during that period when the search titan was buying every promising company in sight. Mr. Crowley began consulting for other start-ups andsettled into a $1.1 million co-op on the Lower East Side.

Patrick Keane, an internet media executive who had known Mr. Crowley since the early days of the dot-com boom when they both worked at Jupiter Communications and later on at Google, said Mr. Crowley is not the type to retreat. “You could sense his frustration,” he remarked about working at Google. “But he’s not a negative guy — he’s not going to sit in a corner and say, ‘Woe is me.’”

Despite never fitting in at Google’s engineering-dominated culture, Mr. Crowley took some lessons from the search titan — as well as a few engineers — and incorporated them into the foundations of Foursquare. Clay Shirky, the internet guru and Mr.Crowley’s former professor at NYU, said Mr. Crowley isn’t someone who loves technology for technology’s sake. “Dennis is unique,” he explained. “He only cares about making things better for users, and he avoids the trap that a lot of techies fall into, which is to assume that because the tech is interesting to them that it’ll be valuable to users.”

Significantly, those who seem to be appreciating this approach more and more aren’t necessarily venture funds, but major advertisers. Pepsi signed on when Foursquare debuted at South by Southwest Interactive two years ago — a partnership that, according to PepsiCo’s global head of digital Shiv Singh, is dictated not by either party so much as the product itself.

“Foursquare is one of those really strange partners we have who would give me ideas and recommendations where they would say to me, ‘Shiv, this doesn’t fit into the DNA of Foursquare, it would work better this way,’” he says. “That sort of purity of product purpose you don’t see so much.” Mr. Singh was further impressed that Foursquare’s recommendations meant Pepsi would be spending less with them.

The start-up’s focus on its application as opposed to immediate revenues appeals to American Express as well. “They’ve got an incredibly smart product, and you see with each new version they release, they make it easier for users to explore cities,” David Wolf, American Express’ vice president of global marketing, said. “As long as they keep doing that, it’s going to be pretty easy to then have the marketing solutions tied to that product as opposed to going at it from the other way around.”

Still, Foursquare eventually has to start making some money, and Mr. Crowley sees an opportunity in offering data to merchants about who’s checking in to their stores and buying their products. For the moment, however, he’s more concerned with scaling the enterprise, as they say, a strategy that Mr. Keane agrees with. “They have to move past being an app just for young, hip kids and more of a mainstream product,” he said.

The abiding premise of Foursquare, its potential charm has less to do with ticking off the places you’ve been, or even just knowing the places your friends have been, but rather the serendipity of meeting someone where you’ve both checked into. Foursquare attempts to bridge the random and easy connections that define online behavior to the weighty, real connections that occur offline. It is that flesh-y interaction that drives him.

Fittingly, even within the elite ranks of the latest tech boom, Mr. Crowley has become a kind of convening priest within its New York diocese, advising ITP students as well as the city’s entrepreneurs. Brooke Moreland, founder of fashion start-up Fashism, said she knew Mr. Crowley through mutual friends and thought they didn’t know each other well, she emailed him out of the blue. He responded. “He was super nice and super generous with his time,” she said, explaining that Mr. Crowley helped the former TV video editor on her “pitch deck,” pointing out which metrics investors would be looking for and which elements to leave out. Fashism closed a $1 million in funding late last year. “It’s been very good for New York that Foursquare is here,” she said, suggesting that other entrepreneurs are looking to draft off its success. “A lot of people look up to Dennis for that reason.”

That kind of success has put Foursquare on the cusp of mass scale, which also presumes a certain financial windfall. The company’s backers, however, aren’t too concerned with exits, and Yahoo’s reported $100 million offer last year now seems like a paltry sum given where the company currently stands.

“The exit isn’t supposed to be the end of this story,” Mr. Crowley says. “People say the goal of Foursquare is to sell or go public. That’s not my goal. The goal is to change how people think and how they connect to real spaces. That’s the stuff we get excited about. That’s the stuff I think people get excited about.”

By Edmund Lee


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