As their users were busy playing games and checking-in to cool new places, Foursquare engineers were hard at work. They were mining the data exhaust created by all those check-ins. They were building a recommendation engine that would become contextually aware.
This is where the real value in Foursquare lies. The founders of Foursquare were never running sprints, they were not going to sell out when their user base reached into the millions. Collecting enough data to make relevant predictions of people’s behaviour, would take time. The building of Foursquare was always going to be a marathon. All these games and check-ins, were all the time, adding and updating to a place database which now has over 60 million points of interest.  What Foursquare has been creating was a living breathing dataset crowdsourced from its users.
Foursquare has built its contextual notifications from this dataset. Contextual awareness is about providing information based on the context in which you can use it, providing relevant information at the right time.  The notifications run in the background where the user doesn’t need to sign-in. It knows when you are in an unfamiliar place and gives you advice and tips only when you need it.
For example, a notification might pop up on your phone with “At Wagamoma’s? People talk about ‘Katsu curry’, ‘Chilli Beef Ramen’, and ‘Get the lunch offer'”. Foursquare knows when you are out of your element and will not give notifications for places near where you work or live. When arriving in a new city a notification could be, “Welcome to Paris! Your friend Geoffrey’s list ‘Hidden Local Gems’ has 6 places nearby”.
To achieve this Foursquare engineers use machine learning techniques, making use not just of location, but time and behaviour of the user and their friends. It uses natural language processing to figure out the sentiment of all the tips and recommendations, understanding which are actionable and useful. 
Last month, just hours after Microsoft anounced its new CEO, it invested $15 million into Foursquare.  Microsoft are looking for access to Foursquare’s place database to use in Microsoft’s own products and services. In reacting to this news, Foursquare mentioned in its blog, “In the near future, when you use Microsoft devices powered by the Windows and Windows Phone operating systems and products like Bing, places will be enhanced by Foursquare – to provide contextually-aware experiences and the best recommendations of any service in the world.” 
It’s not only Microsoft who gets access to Foursquare’s data. The Foursquare API gives access to all of the data used by the foursquare mobile applications. This is part of Foursquare’s long term strategy to become the location layer of the internet.  Hundreds of mobile apps now use the Foursquare API, including Uber, Foodspotting, Vine and Instagram. Even after Instagram had been bought out by Facebook it continues to use the Foursquare API for location data over Facebook’s own Place API. 
As Jonathan Barouch, the founder and CEO of location-based startup Roamz has said, “Foursquare’s value is less about the size of its active user base and more related to the reach of its location database. Its API is fast becoming the de facto location layer of the mobile web and touches almost every user of location-based apps.” 
But Foursquare now faces some major challenges, how to convince the public that these contextually aware apps bring convenience and not creepiness, and how to persuade their users that they’re giving them something valuable and not simply exploiting their personal data.
~ Keith Walsh
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 Thursday, B. 2014. “Notifications Are Just Getting Started”. Saga. Available at: http://www.getsaga.com/blog/contextual-notifications-are-just-getting-started (accessed: 13/03/2014)
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 Foursquare. 2014. “Our crowd-sourced places database has over 60,000,000 entries and 5,000,000,000 check-ins, and one major new partner – Microsoft.” Foursquare Blog. Available at: http://blog.foursquare.com/post/75603461066/our-crowd-sourced-places-database-has-over-60-000-000 (Accessed: 13/04/2014)
 Olanoff, D. 2013. “Dennis Crowley Says That Foursquare’s API Is Currently Underutilized, Apps That Use Its Location Data Are Smarter”. Techcrunch. Available at: http://techcrunch.com/2013/04/29/dennis-crowley-says-that-its-api-is-currently-underutilized-apps-using-its-location-data-are-smarter/ (Accessed: 13/04/2014)
 Barouch, J. 2013. “Foursquare’s API Is A Pillar Of The Mobile App Ecosystem”. Techcrunch. Available at: http://techcrunch.com/2013/03/29/the-internet-needs-foursquare-to-succeed/ (Accessed: 13/04/2014)