“You don’t need to check in to use Foursquare. Over the past few months, we’ve seen Explore use double,” the company wrote in a press release. “With billions of data points, we can always help you find the best places to go.”

The updates coming to Foursquare.com on Tuesday primarily reorganize the information on the business listing pages, making them easier to digest and putting important information like photos and hours more centrally located. The pages will include which of your friends have checked into locations (if you’ve logged in), suggest other places to go in the area, and share locations you’ve found with friends.

With Foursquare still struggling to find its footing several years and funding cycles down the road, it’s clear from the most recent mobile update that its best path to making money will come by challenging Yelp in the realm of local search. And if you’re going to challenge Yelp, you need a solid desktop presence.

Many people might be unfamiliar with Foursquare’s desktop site at all, but it’s actually been around for a while now, and the company said it gets more than 50 million visitors per month. Most of the changes to the business listings this Tuesday are design improvements, but as a Foursquare representative noted, the company hasn’t re-designed the listings since November 2011, when it launched Foursquare.com; they’re due for an update.

Here’s an example of the new desktop listings on the left and the old version on the right (click to enlarge):

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BusinessWeek broke the news of the Series D funding round early on Thursday, an article that was quickly followed by a post from founder Dennis Crowley on the official Foursquare blog — entitled “Continuing Foursquare’s Growth” — and posts from two separate partners at one of the company’s main financial backers, New York-based Union Square Ventures.

Crowley compares the challenges to Google

In his post, Foursquare founder and CEO Crowley describes the challenges ahead — including some fairly dramatic technical challenges, such as the need to index and filter more than 3.5 billion check-ins and other location data in something approaching real time, in order to successfully recommend to users a restaurant or other business that fits their needs. Crowley compares it to the kind of data wrangling that Google has to do in order to provide search results:

“To us, this is like when Google came and revolutionized web search. Suddenly, you could find things on the internet. The real world is the same way. Four years ago when we started Foursquare, it was really hard to discover a new retro arcade that opened up on a side street, or to make sure you weren’t overlooking the best dish on the menu, or to know a good friend was just around the corner. Sometimes, we think of Foursquare as having the ability to give people superpowers for exploring the real world.”

In a post at the Union Square Ventures blog, Albert Wenger talked about the potential for Foursquare to capitalize on its new focus as a platform for discovering local businesses — something GigaOM’s Eliza Kern highlighted in her post on the newly redesigned Foursquare app, which launched on Wednesday. In effect, the company is going head-to-head with local recommendation services like Yelp, and giving up its earlier focus on “gamification” elements like mayorships and badges.

Debt instead of a lower valuation

Union Square Ventures partner Fred Wilson, meanwhile, wrote a post on his own blog about the fact that Foursquare chose to (or was forced to) use convertible debt rather than equity. As Wilson explains, this kind of late-stage debt issue is often used when a company doesn’t want to (or can’t) raise equity because doing so would involve a “down round” — in other words, raising money at a lower valuation than it was given in earlier rounds. As he described it:

“Both of our firms have been investors in Foursquare for several rounds and both of us own a meaningful stake in the company. Valuation is somewhat immaterial to us as our stake in the company is not going to increase much in this round of financing. But valuation is very material to the Foursquare management team because $41mm of capital is going to be dilutive at any valuation that would make sense here.”

As Foursquare has evolved from being a fresh young startup with the hot iPhone app — which it was in 2009, when it launched at the SxSW festival — into a four-year-old company that has raised a total of $70 million in three separate rounds, it has faced increasing pressure to prove that it has a real business, along with questions about whether it can ever justify its earlier valuation, which was in the $600 million range. In a report in January, private-company research firm PrivCo argued that Foursquare could go out of business by the end of the year unless it raised more money.

In a much-publicized spat on Twitter last month, investor Keith Rabois — a former PayPal founder who is a backer of Foursquare competitor Yelp — said Foursquare’s only option was to be acquired, because it had failed to back up its valuation with any real business success.

@dens @sriramk @hunterwalk great use of jargon. Maybe Hail Mary Bebo-style acquisition will bail you out.—
Keith Rabois (@rabois) March 16, 2013

Foursquare needs to prove it is a business

Foursquare’s biggest problem is that it hasn’t been able to generate any meaningful revenue from the millions of users and partnerships it has announced over the past couple of years — according to an anonymous source quoted in the BusinessWeek article, the company had revenue last year of just $2 million, which makes a $600-million valuation look almost ridiculous. According to Crowley, much of the new financing will be used to develop advertising products that can run next to Foursquare’s local recommendations.

Despite its inability to produce revenue, the company’s supporters remain optimistic about its chances of building a truly large-scale and profitable local recommendation service. Hunter Walk, a former YouTube staffer turned venture capitalist, said on Twitter “All I know is the financing allows them to continue building a product I love,” and Shai Goldman of the 500Startups angel fund said: “I hope they figure out how to monetize, I’m a fan.” Even John Lilly of Greylock Partners, which didn’t invest in the company, said on his blog that he thinks Foursquare has a chance to build a real business:

“What does matter is that they raised the money they need to give this a real go. I have high confidence in these guys that they’ll do well and build interesting products and a great business for a long time.”

Others, however, were less complimentary — and many seem to see Foursquare as a high-risk bet, much like email-offer flameout Groupon:

.@mdudas @jackgavigan @rabois @bijan I can only hope foursquare goes public. I didn't short Groupon nearly big enough.—
Rakesh Agrawal (@rakeshlobster) April 11, 2013

Post and thumbnail photo courtesy of Pinar Ozger

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But now, more than four years after the startup launched at SXSW and more than $70 million in venture funding later, it seems gamification isn’t enough to keep Foursquare going. The company is rapidly embracing the concept of local search, launching a new version on Wednesday morning that highlights the “Explore” tab as a primary focus, and making clear that the quintessential Foursquare experience is no longer about being mayor of something: Foursquare wants to be your personalized version of Yelp.

“We’re crunching all our data to show the best of what’s nearby, anywhere in the world, the second you open up the app,” the company wrote Wednesday.

The app looks substantially different than before, eliminating the different tabs at the bottom that used to let users navigate from check-ins to search to profile, and instead creating one primary feed. The new design has a large check-in button at the bottom, and shows the Explore tab at the top of the main screen. It places more emphasis on where your friends are checking in nearby, and popular businesses at the moment.

Foursquare has been moving toward local search as its primary focus over the course of the last two years or so. Foursquare first launched the “Explore” tab in March 2011, allowing users to discover businesses nearby, but didn’t add a desktop equivalent until January 2012, when the company started to get serious about the feature. In October, the company opened up the search engine to everyone on the web, not just registered users, and CEO Dennis Crowley explained that they wanted users to start seeing Foursquare as more than just a place for check-ins. The company established an American Express partnership in June allowing customers to link their credit cards to unlock deals, and expanded tools for local merchants.

But it’s not just that Foursquare is tired of the whole mayor business — local search presents more opportunities to make money, and Foursquare needs to make money. A report in The Wall Street Journal in November said that Foursquare’s investors, who have put $20 million in June 2010 and then another $50 million in June 2011 into the company, wanted to see more growth than the company was experiencing. Despite bringing in more than $70 million dollars, Foursquare still only had about 8 million active users at the time, which isn’t all that substantial for a four year old company (Twitter now has more than 200 million active users, for comparison). And reports said it was bringing in only $2 million in revenue for 2012 – even after all of the new tactics for improving local search to make money.

So what’s the solution? Clearly, it’s to double down on local search.

“One of the challenges is to get people to think about Foursquare less as points and badges and more about local search and discovery,” Crowley explained to GigaOM back in October. “We really see Foursquare as reinventing ourselves with local search and recommendations. We’ve been telling users for a long time and now we can tell the same story and illustrate it for folks.”

The move presents challenges, obviously, in that Yelp is a clearly established leader in this market, and has a serious head start in convincing most businesses to set up pages there. However, Foursquare does add a social element to its business discovery that isn’t as much of a focus for Yelp. While Yelp has built a business around reviews, which are social to a certain extent, and interaction with reviewers, if I open Foursquare right now I’ll immediately see what businesses my friends have recommended. And for some people, a friend’s suggestion could be more powerful than a five star Yelp review.

Foursquare made one of the most high-profile attempts at re-building local commerce around the idea of loyal customers through app check-ins, but it seems that convincing people outside of Silicon Valley to check into their favorite establishments hasn’t worked. And without mass participation, that’s not a big enough audience to build a profitable business. Steve Wozniak might continue to maintain his mayorship of several Baskin Robbins, and the company will need people to continue checking in to build its data.

But for Foursquare, it’s time to start checking into more traditional forms of gathering revenue with discounts and desktop search.

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Except for one small thing: While the data shows that I lead a pretty boring life, it doesn’t reflect the “emotions” behind the data. Why, you might ask, is this important? The answer is that as we move towards a quantified society, one shaped by data, we start to dismiss things that aren’t easily quantifiable. Empathy, emotion and storytelling — these are as much a part of the business as they are of life. Without these, we might as well residents of starliner Axiom.

The problem with data is that the way it is used today, it lacks empathy and emotion. Data is used like a blunt instrument, a scythe trying to cut and tailor a cashmere sweater. Some folks do a better job of making data interesting — like the fine folks at Foursquare. They use cutesy phrases to remind me of my coffee addiction and occasionally point out that Jared Kim and I are besties when it comes to eating ramen noodles or visiting Hakkasan, but they don’t really tell the whole story and they need to do more.  I will get to that in a minute.

The idea of combining data, emotion and empathy as part of a narrative is something every company — old, new, young and mature — has to internalize. If they don’t, they will find themselves on the wrong side of history.

The Uber-side Story

Let’s explore this idea further with what is my most used service: San Francisco-based local transportation startup Uber. As someone who doesn’t drive and doesn’t own a car, Uber has been a godsend. And that is why I am hoping that they stay in business — for a long time. Selfish, much? Of course! That is why I am perhaps harder on them than any other startup, poking holes in their strategies, ranting on Twitter and occasionally praising them for their awesomeness.  Time and again, Uber finds itself in the eye of the (public relations) storm, and to me the reasons are pretty obvious.

If you look at the relatively young history of Uber, you would see that it is a company that has done many things right and a couple of things very wrong. It has figured out how to remove friction between a traveler and transportation by reducing it to mere minutes. In doing so, Uber has also become the first next-generation commerce company to use connectedness to its advantage. It has also figured out how to organize what is a disorganized and poorly managed business: local transportation.

Uber’s secret weapon is the data it is collecting, but what it has failed to do — use that data in the most powerful kinds of ways. Data tells the service that there are fewer cars on the road and massive demand, and out comes surge pricing. This makes perfect business sense — except when it is in New York City battered by Hurricane Sandy. Ooops! The company failed to factor in the “emotion” and “humanness” in its data.

A better approach would have been to give people discounts based on the time they had to wait, and make up the difference to the drivers (or even give them bonuses for working around the clock). Yes, it would have been costly, but it would have cemented the “Uber cares” sentiment.

The whale theory

Uber (and I don’t mean to pick on them, because it applies to all companies) should be thinking about using data to create positive experiences. A good way to start is to take a cue from the casinos (or Zynga): make the “whales” happy.

Shutterstock/Dan Kosmayer

If someone is a big spender on their service, then they should get to the front of the line and get an Uber car before everyone else. Sure, they can create loyalty discounts, but time saved (and a clean experience) is what’s more important to an Uber customer. (This shoe store in Manhattan knows how to use data to make customers happy, and perhaps others should take a hint from them.)

Uber should give the whales an experience that puts a higher premium on their time than that of occasional users. Match up these whales with the best cars and the top-ranked drivers so they will keep spending. In other words, use data to shape experiences.

Some might say that this is yet another example of data darwinism at work – and in one sense it is — but big spenders get big perks from casinos and hotels (and some airlines). Uber wouldn’t be doing anything wrong if it followed suit, as I don’t think of them as an essential service. I am and will remain wary of the idea of data darwinism creeping into essential services.

Using data to shape experiences has to become the default for all startups, regardless of whether their focus is on consumers or large companies. Almost every day I come across an app that has an astonishingly beautiful interface, only to find it incredibly vapid and unintelligent. A lovely interface comes alive when married to data and the insights and context it brings.

Coffee and empathy

What will it take to build emotive-and-empathic data experiences? Less data science and more data art — which, in other words, means that data wranglers have to develop correlations between data much like the human brain finds context. It is actually not about building the fanciest machine, but instead about the ability to ask the human questions. It is not about just being data informed, but being data aware and data intelligent. Sean Gourley, co-founder of Quid, in his keynote speech at Structure: Data, noted:

Data scientists are presented with a set of parameters to optimize over, yet they don’t take the time to step back and say, should I even be optimizing this at all. Data science, I believe, we need to re-imagine it, because data is incredibly powerful. We need to step back from the scientific notations and start thinking of it as data intelligence. Data intelligence has a slightly different philosophy that embraces some of the messy and unstructured nature of the world that we do live in.

Let me explain by using my favorite coffee shop as an example. The raw number of check-ins at the coffee shop tells me that I am boring and predictable. Anyone who doesn’t know me well will draw the same inference. But parse the data in more granular manner and correlate it with other information and you start to see a picture that understands the emotional value of that data.

Let’s run with this example. The service needs to realize that I visit said coffee shop first thing in the morning (something that can be inferred from the time of the check-in.) It also needs to learn that the coffee shop is a few miles from my home, which tells you that I go out of my way to go there.

The service also knows that I check-in with a handful of people, whose relationship to me can be inferred from the social graph. Add to the mix the fact that I have left tips and taken photos at that spot. Now, compare it to all other coffee shops I have checked into and how they rank against this one location. Add all of them up, and you end up with a rudimentary conclusion: I don’t go to this coffee shop simply because it’s an interchangeable part of my daily routine, or because it’s on my way to work. I visit it because it is my happy place, my one cup (or dozen) of zen. And a company like Foursquare could use that fact to package even more compelling experiences for me.

Data needs stories

The key to getting the context is to think in terms of stories. Sean put it best when he said:

“Data needs stories, but stories also need data. Data, when its put up in front of you as a number, it gets stripped of the context of where the data came from, the biases inherent in it, and the assumptions of the models that created it.”

The symbiotic relationship between data and storytelling is going to be one of the more prevalent themes for the next the few years, starting perhaps inside some apps and in the news media. I was reminded of the future filled with data narratives when I saw this visualization – Out of Sight, Out of Mind, by Pitch Interactive. It takes data about drone attacks and makes them visual and easy to understand, and in doing so, elicits a strong reaction.

But it merely scratches the surface — presenting a slight improvement on an infographic that might have appeared in the pages of a magazine. In a future where we have tablets and phones, packed with sensors, the data-driven narratives could take on an entirely different and emotional hue.

As for Uber and Foursquare, they should start by thinking, how do we make our customers feel special?

Post and thumbnail image courtesy of Shutterstock / Chepko Danil Vitalevich

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OpenTable is now built into Evernote Food so that users can book reservations directly from the app, the company announced on its blog. They can share recipes on Facebook, Twitter and via email. And people who already used Evernote to store recipes, but weren’t using Evernote Food, can import those recipes from Evernote into the Evernote Food app.

Evernote Food has also made some content deals in Asia: “Evernote Food lovers in China and Japan will also now be able to search recipes from top regional publishers,” the company noted.

Evernote Food relaunched as an iOS and Android app last December, beefing up its discovery features like an “Explore Recipes” tab and Foursquare integration. In that way, the app aims to compete with other food discovery apps like Urbanspoon. The recipe storage and sharing features are its answer to recipe-focused apps like Say Mmm, Paprika and Gojee, and aim to take advantage of the fact that a lot of people already use Evernote to store recipes.

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Which is why one entrepreneur has launched MyTime, a site that lets small businesses create profiles and sync their bookings calendars to allow customers to discover their sites and book appointments through the website, eschewing the potential pitfalls of local deal sites like Groupon.

Entrepreneur Ethan Anderson, who was previously a product manager with Google and then sold his last startup Redbeacon to Home Depot in January 2012, started working on MyTime  about a year ago and just launched the site this week. MyTime has about $3 million in funding from GRP Partners’ Mark Suster, 500 Startups, Brian Lee, Jason Calacanis, David Tisch, and others.

The site, which is starting out with businesses in L.A. but looking to expand, allows businesses to create a page for their company, sync up with Yelp reviews and ratings, sync appointment calendars, and set deals for particular slots to entice customers to less popular times. The service is free to join, but companies that let MyTime promote their offers through dynamic pricing, Google AdWords, Twitter ads, and other solutions give up 40 percent of revenue from bookings that come through the promotions (excluding existing customers). Anderson said about half the businesses so far have taken advantage of the marketing option.

The site exists right now as primarily a desktop website that’s optimized for mobile, but Anderson said developing native apps is up next. He points out that while local review and ratings sites are common (think Yelp, Foursquare, etc.), the actual booking component is not as well widespread.

“Our vision for the business is that you connect your calendar once and then everything is taken care of. We bring your customers back, and we allow you to later connect with your consumers. And for the customer, it’s the ultimate convenience,” he said. “I feel like no one else has brought together the calendar and the pricing and the actual e-commerce experience. “

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On Foursquare’s blog, the company explained the rationale behind the standalone app for business owners:

Over a million businesses use Foursquare to connect with their customers using our free tools. But sometimes, when you’re running around on the floor, it’s hard to hop on a computer and post yourlatesthappenings, like the spring collection that just arrived or your newest menu item. So today, we’re releasing the Foursquare for Business companion app to help business owners share news with their customers, right from their phone.

The app is available to businesses in iPhone and Android versions, and is meant for small business owners to post updates and specials to their business page on Foursquare and then cross-post to Twitter and Facebook without having to visit the desktop site. The company launched a local search product earlier this year, and has been working to target business owners as part of its revenue strategy based on promotions and search.

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We broke down the numbers for all of the prominent social media services that have released a monthly active user stat, and then plotted those numbers along with the years since the company launched. The area of the circles is representative of the service’s monthly active users. And you might find some of the results surprising. For all we talk about Twitter, it is only a fifth the size of Facebook. And while LinkedIn was the first company founded of all we charted, it still has pretty tiny numbers.

Pinterest declined to release numbers, although it did make it on comScore’s list of top 50 web properties in September. With Google+ numbers, it’s good to remember that the service is so deeply integrated into other Google products, it can be more difficult to understand exactly how people are using the platform.

But taking a look at the numbers we do have — and it’s worth noting that the majority of major sites do release the monthly active figure — gives you a good sense of where traffic and user interest is going. And if your users aren’t interested in visiting your site or app each month, that’s probably not a great sign:

Charts by Rani Molla/GigaOM

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Path’s search function hinges around what looks like a normal search bar at the top of the screen, but when you tap it to enter a phrase, Path auto-suggests several ways to search: By person (you can hunt for all your memories that took place with a particular person), by place (you can look back and see moments from your favorite restaurant over time), by time (check out the music you’ve listened to at night, for instance), or by timeframe (everything that happened in April or last year.) You can also search for moments posted nearby, so if you’re looking for a coffee shop or sushi restaurant nearby, you can see where your friends have been in the area.

The search function on Path is definitely more personalized than what you’d find on Google, or even on Foursquare, under the assumption that the people you connect with on Path are your true, close friends (it’s limited to no more than 150 connections). So your results could be narrower but more targeted as a result. For the most part, Path’s search function feels closer to Timehop than Yelp, letting you discover moments from your past, rather than focusing on businesses that are necessarily nearby.

The biggest question in my mind when looking at the search function is whether users will immediately understand how to use some of its coolest features. Most of us are used to using the Gmail search bar to find keywords that we know appeared in the particular email we want, but Path’s search goes a little further than that.

A search for “weekend brunch” will turn up results for check-ins on weekends (the search engine knows that you mean posts on Saturday or Sunday), and at restaurants that serve brunch (by using Foursquare’s API to see which restaurants serve brunch food, even if the original post didn’t include the word “brunch.”) You can also search for “royal flush” to see moments that gathered all possible reactions from your Path friends (heart, smiley face, frown, etc.) It’s very cool, but not something users might immediately grasp. Although the suggested search terms can help with that.

And the success of the search bar is also very dependent on a user being a somewhat regular user of Path — it’s most interesting looking back at a wide variety of data from a long time period. The company is at about 5 million registered users, said Nate Johnson, the company’s VP of marketing, up from 3 million in April, but if you’ve only been posting on the network for a week, it probably wouldn’t seem as cool, although it would certainly work.

But I had a lot of fun searching through my Path moments from a year ago, and it’s an interesting step forward for the company in making social media check-ins and shares less chronological and more thematic to search through.

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