Yelp and foursquare are on a Collision Course

Awhile back I posted a question on Quora about services looking to disrupt Yelp via focusing on short-form reviews. I got a lot of feedback via email, Twitter, and Facebook and one person in particular, David Levy, pointed out that foursquare is the most likely competitor. All that was lacking was a better logged out user experience for foursquare – until today it wasn’t terribly useful if you weren’t a registered user. But now foursquare has a much more compelling logged-out / non-registered user experience and I think it puts them on a collision course with Yelp. I don’t want to make this an overly long post, but I do have a few thoughts:

Yelp has succeeded by becoming the de facto place to review restaurants and places of interest. You don’t need “friends” on Yelp to get value from the system as it depends on a combination of crowd feedback and good SEO to show up when you’re trying to get a read on places to go. Yelp has done really well in proving out the business value in creating an advertising and editorial relationship with local businesses. They’ve done such a good job, in fact, that they’re filing for a sizable IPO. But Yelp is becoming difficult to use for me for two reasons. One, the reviews are becoming too wordy – there are too many 500 word preambles about everything that happened prior to visiting the place before you get to the meat of the review. That’s too much reading for too little value. Second, reviews (over time) seem to converge on 4 stars. That’s not a problem with Yelp, it’s more a consequence of a 5-star review system – maintaining 5 stars is virtually impossible and who wants to go to a place that can’t at least hold 3 stars? That being said, Yelp is still useful for many and continues to grow.

While foursquare is valuable to me, I am not willing to open up my real-time foursquare checkin activity to the world and the service has been pretty uninteresting if you don’t have friends on it (until today). I would have to say that foursquare is one of my favorite social networks. The downside of being a double opt-in / symmetric friend network is that the service is really only fun if you have other friends on it. They don’t have a real “follower” model – the data you get as an active user is a function of what your friends choose to do. But foursquare is gathering a lot of data. Ask a lot of location-based services companies whose places graph is the best and many of them will tell you that it’s foursquare. So they are doing a really good job of activating and engaging the community of people who like the product. But most of this data and insights is locked up in the service and accessible to those who are active participants. I believe that the non logged in user homepage is the first step toward making the service more useful to a wide range of users. It will expose (and make useful) a lot of the data they’ve collected.

The other step I see foursquare making is the level-based badging system. This provides them with a really unique opportunity. It could (potentially) mean a lot more to me to see the top-rated or reviewed sushi restaurants from people with the high-level “Bento” badge on foursquare because at least I have some sense that person has visited a number of sushi restaurants and should have a point of view. That’s not something that’s easy to get from Yelp today.

So, for what it’s worth, I think Yelp and foursquare are on a long-term collision course around being the authoritative source for local recommendations and reviews. If you have thoughts or comments, feel free to leave them below or message me on twitter @chudson

  • Good stuff as always. Worth noting that because Foursquare has social in its DNA, the “Explore/Trending Places” feature could be the big differentiator. Yelp’s check-in offering seems DOA (much like Google trying/failing to offer social features) and thus they’ll never be able to offer that. If Foursquare gets to scale, that feature has “killer feature” potential. Trending/Social proof (even without a user’s social graph) for a venue could be as valuable as a 4/5 star review.

    Also, I haven’t used it much yet but Gogobot is the “sleeper” in this race. Early product seems to have the perfect balance of local directory and social graph so it’s squarely in the middle of Yelp and Foursquare.

  • I am a pretty active Gogobot user, but I use it more to share / look for information for trips than everyday adventures. Perhaps that’s ultimately a meaningless distinction, but it does impact how I use the product today. I don’t really find Yelp’s checkins terribly useful – I agree that it feels kind of DOA. Treating a successful company’s core product like it’s a feature of your offering can backfire.

  • i really want(ed) to like gogobot, but i feel like its been trying to be part foursquare, part tripadvisor, part quora, part instagram, part…. ¬†personally, id prefer a way to connect fsq, fb, etc. to a service that builds my ‘trip profile’ more quickly/effectively. ¬†perhaps/hopefully gogobot or one of the other guys coming out in the space (irrive) will get there. ¬†definitely lots of good change coming to the travel space….