In an onstage interview with New York magazine writer John Heilemann, Crowley resisted comparisons with Groupon, which Heilemann said might be doing a better job of cultivating merchants because it started with that focus and added features such as geolocation as part of the package. The interview was a keynote event at Web 2.0 Summit, which is produced by Federated Media and O'Reilly Media in partnership with UBM Techweb.
Crowley said he believes Foursquare's approach is "more technically challenging" than anything Groupon is doing and will find its own market among merchants. It's not yet clear whether a service like Groupon is "competitive or complementary" to what Foursquare is doing, he said.
While Foursquare starts with a focus on the user experience, Crowley said the company realized early on that it needed to cater to merchants that wanted to be able to market through the platform. "For every three things we would do for an end user, we would do something for a merchant," he said. "Now, as we have more merchants participating, the product becomes better because our users are getting more deals."
Heilemann also asked about the nightmare of a startup competing with Google and Facebook, which are "ripping off everything you're doing in a very direct way" and can bring tremendous engineering resources to bear on the task.
"We have a very narrow focus on building things that help people experience the real world," Crowley said. "Being focused specifically and narrowly on that" will ultimately help his firm compete with Facebook and Google because those companies have so many other products they are supporting, he said.
[ Social media companies are very competitive. Read Twitter CEO: Google+, Facebook Can Wage Features War. ]
While he wouldn't share specific numbers, Crowley acknowledged that many people download the Foursquare app but never or rarely use it. "It's our challenge to turn those people into regular users," he said. Foursquare will continue to use gamification techniques as one of its main tools to promote usage of the platform, he said, partly because that's become a core part of the Foursquare brand, he said.
It's not uncommon for people to take time to warm up to a service, Crowley said. "I was super-early on Twitter," he said, but at first he used it only intermittently. Then, after about 18 months, he had an ah-ha moment where he realized where it fit into his life. Many Foursquare users will follow the same path, he predicted.
Foursquare has attracted about 10 million user accounts and is "pretty satisified" with its progress getting those users engaged, Crowley said.
That should be accelerated by innovations like the Foursquare Radar application for iOS 5, the operating system for Apple's iPhone and iPad, which runs in the background to alert users to friends and deals in their immediate area.
"This is the kind of stuff we've been trying to build since grad school, or before grad school," Crowley said. "We could do it in the past, but you would drain your battery in about four hours," Crowley said. Apple's iOS provided a geolocation feature you can run all day without killing your phone, he said.
See Foursquare's Dennis Crowley tell the Web 2.0 crowd about competing with Google and Facebook: