FourMob: Why Location Based Services Should Love Daily Deals

Having spent years in loyalty marketing, I’ve been a Scoutmob fan since Day One. I love the idea of group buying power driving great deals at great merchants. I love the idea of being incented to try new local businesses – and yes, I’ve become a regular customer of some based on my trial experience. And I ultimately love it when a service like Scoutmob intersects with a local boutique where our family spends a decent chunk of money. This was exactly the case on Saturday when one little iPhone app saved me $75 in a single shot at B. Braithwaite. The entire experience got me thinking about why two specific brands I interact with daily aren’t a single company. Yep, I’ll say it: Foursquare needs to buy Scoutmob right now!

For those not familiar, let’s look in-depth at Scoutmob, which will further explain my rationale for this being the deal of the year. Forget the Groupon model of pre-purchasing deals via credit card, although that fact is what sets Groupon seriously apart from most of its competitors – especially when you’re talking $1M a day in top-line revenue (assuming Groupon CEO Andrew Mason’s silence equaled consent when Mike Arrington dropped that number during an on-stage interview at last week’s Social Currency Crunchup).

Scoutmob has an oddly two-headed view of their offers, where the website acts more like Groupon (but ‘redemption’ of the daily deal only gets the code emailed or texted), but the iPhone app treats the entire experience differently – which is where the Foursquare mojo really kicks in. The Scoutmob iPhone app is a complete database of all offers (not just today’s), which can be accessed anywhere, anytime. In fact, you can even locate deals via the GPS in your iPhone (hint). And then there’s the redemption model; your GPS must match the physical location in order to generate the offer code. How can this not be a match made in heaven?

And let’s be honest, Foursquare could use a bump in its value proposition. While they’re hard at work developing brand-level relationships with the likes of HBO, Zagat and The History Channel the Holy Grail is deals – especially in this economy. (That’s really what Location Layers are all about, right?) I’m not talking about the crappy 5% discounts retailers give to anyone or free tacos for the Mayor, but large-scale, behavior modifying deals. While they’ve recently crossed the 2M member and 100M check-ins milestones, it’s a perfectly legit question to ask what drives the next 10M members and 1B check-ins.

And Foursquare clearly has the momentum and funding to throw Scoutmob’s geographic expansion into hyper drive, which is their main job right now. Sure, Michael Tavani and the Scoutmob team could close their own deal and continue to grow organically but why take the slow road? If Dennis Crowley and gang are true ninjas, they’d approach the deal like Jeff Bezos and Tony Hsieh did when Amazon bought Zappos. They’d figure out how to draw some of Scoutmob’s cult brand status into the Foursquare experience. They’d understand users love great content wrapped around great deals, and not everything can (or should be) crowd sourced. Overall, the Scoutmob brand could be a huge boon to the Foursquare universe.

From a Scoutmob perspective, the ability to geographically scale at warp-speed would be epic. And forget about launching into new markets as an unknown brand. Imagine the two teams sitting down and plotting a new market strategy with Foursquare check-in data as a primary driver. Now that’s how you launch a new city – with a built-in audience of 100,000 Foursquare users.

So I can hear everyone screaming right about now: Dave, you’re going to cost Atlanta one of our only real B2C startups. Wrong. Part of doing this deal right should be leaving Scoutmob in Atlanta. The cost to build a company in Atlanta is low compared to NYC, and the talent needed to scale the core operations can come from anywhere. As I’ve recently contended, Atlanta’s a pretty good place to setup shop.

At the end of the day, I think this is a perfect match. I get that Scoutmob has big aspirations in a billion-dollar market defined by Groupon, but the question always is how do you ensure you’re Number One or Number Two in a market? The Groupon effect has created a litany of imitators, who are funded to all different degrees. If the Scoutmob guys really want to fulfill their vision to deliver deals nationwide, what better rocket to strap yourself to than Foursquare? And those stock options have a pretty good chance of being worth some serious coin over the next 2-4 years. Hell, now that Scoutmob has a NY office, you guys are virtually neighbors!


0 # Kevin Planovsky 2010-08-03 17:55
The irony in all this is that Google is serving Living Social ads at the top of this very page... ;)

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0 # Kevin Planovsky 2010-08-03 18:01
Also, I think I like ScoutSquare better...
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0 # GFRRTDEFF 2010-08-03 18:24
Kevin: There's no doubt Google's AdSense algorithm is a beast. My brand sensibilities say my headline will be the only place those two names would ever be combined :-)
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