Oct 12, 2012 · 1 minute

Specific discounts for specific customers -- that's the key to Foursquare's future monetization success, according to Dennis Crowley.

Speaking to Sarah Lacy at PandoMonthly in New York tonight, the Foursquare founder said the company took a while to get to the point where it's ready to monetize the product, but now is the right time. The company has long wanted to build tools for merchants so they could make recommendations and track customers by credit card.

“There was no reason to do it in 2009. We had nothing to sell... Now is the appropriate time to do it, because the product's ready.”

Crowley said Foursquare is still trying to figure out how many users it needs in order to be a successful company. "It’s not like, 'If we don’t hit a billion users, we don’t make it.' It could be 50 million active users, it could be 100 million. This is local search, it’s not just social on mobile or social on desktop.”

He also spoke of the importance of smart, precision-based targeting. "Someone has to be the test case," he said. "You can build a big business making a lot of money off each user, not just amassing more users and showing dumb banner ads."

He said Foursquare has modeled its projected revenue-per-user up until 2015, and says that the calculations put the company "right in the middle of where Facebook or Twitter land with revenue-per-user.”

The company is doing a trial with about 25 paying customers, including Best Buy and Old Navy, to see if users respond to sponsored results. “The point now is not for us to be generating a ton of revenue," he said. "It’s to learn how these tools are supposed to work and to learn how the users are responding to the experiment of these promotions.”

Ultimately, he said, Foursquare's proposed monetization scheme looks a lot like Google AdWords, but "targeted just at local, and exclusively on mobile.” The goal is to be able to let merchants target a specific 20-percent discount promotion to a specific user set, such as only the most loyal customers.