Place Discovery Pitfall: The Reason Why Most Location-Focused Social Apps Fail

How Place Discovery, Lists, and Reviews Impede Consistent Engagement

Location-focused social networks, like Foursquare and numerous subsequent platforms, have consistently shot themselves in the foot and undermined their own potential by overly emphasizing place discovery and place organization through features such as lists, bookmarking, and reviews. These place discovery and organization features can negatively impact user retention and engagement due to several reasons, including the following: they diminish the potential frequency of app usage and cater to a limited audience with a narrow use case for the average person.

Incorrect Assumptions About the Average Persons Life

Designers of location-focused apps often fall into the trap of assuming that the majority of people are constantly in search of new and exciting experiences or places. This assumption is flawed because it also presumes that the average person has ample free time and disposable income to explore new places. In reality, many people face financial and time constraints that limit their ability to discover and visit new locations. A 2019 Federal Reserve report revealed that about 40% of Americans would have difficulty covering an unexpected $400 expense, highlighting the limited disposable income of a substantial portion of the population — meaning that most people have no choice but to spend nearly all of their time at either home, school, or work. Place discovery isn’t even on most of people’s radar when they are trying to just get by. This is the bulk of Americans and the world — meaning that place discovery and place organization features have limited scale potential.

Optimizing for Place Discovery and Organization Means Optimizing for Low Frequency Activities

Even when location-focused apps manage to attract users who possess both free time and disposable income, the emphasis on place discovery and organization may still be less than ideal. This is because these activities are inherently low frequency in nature. Users who are actively seeking new places to explore may do so only on some weekends, during vacations, or on special occasions, rather than engaging in these activities on a regular basis. As a result, the app's primary features may not be utilized frequently enough to foster long-term engagement and user retention. In order to maintain user interest and encourage consistent app usage, it's important for location-focused apps to diversify their offerings and provide features that cater to the users' daily needs, rather than solely focusing on activities that may only be relevant sporadically.

Place Discovery and Organization Can’t Become a Major Business

Taking into account these factors, it becomes evident that location-focused apps with a primary emphasis on place discovery and organization may struggle to grow into major businesses. The key to building an app into a major business lies in high frequency of use. A high frequency of use allows businesses to generate revenue through various channels such as advertisements, in-app purchases, or subscription models.

When an app's core features cater to low-frequency activities, as is the case with place discovery and organization, it becomes challenging to maintain regular user engagement. Users may not feel the need to interact with the app on a daily basis, which consequently reduces the opportunities for monetization. Moreover, as the app's target audience is narrowed down to those with disposable income and free time, the potential user base is further limited, impeding the app's scalability.