Foursquare

Foursquare is a networking website/ mobile application that let’s you share, through your mobile your location with friends & people you have added to your network.

The concept in itself is not new and the guys behind Foursquare (Dennis Crowly and Naveen Selvadurai) acknowledge that the concept of Foursquare is taken from Dodgeball (developed by Dennis Crowly himself) that Google decided to abandon _among other products, sites and applications_ since Google people didn’t see these sites to generate enough interest.

Well not to make the Google guys look like idiots, I must admit that there are some key differences between Dodgeball and Foursquare.

Where this comparison is not our main topic we shall explore the key elements that constitute the business model of Foursquare:

1- The product is a mobile application that works on most smart phones.
Is it? I believe the main product(s) is what can be generated from all the data that people would willingly be updating to Foursquare. Whether selling bulk or packaged or in any different form is still being studied.

2- Again who is paying? Foursquare is downloaded and subscribed to for free. Well at least for users but as stated by both founders their 2 main sources _at least for the time being_ are advertising and analytics. Well for a social network that gives you real time personal data, business owners better be ready to pay generously. Come on that’s the holy grail of mass customization the dream of every marketer.

http://bits.blogs.nytimes.com/2010/03/09/foursquare-introduces-new-tools-for-businesses/?scp=3&sq=foursquare&st=Search

3- As Dennis Crowly put it: “recommendation is the core of Fouresquare”. A huge amount of promotion and PR is needed for a start-up but what can be better than the word of mouth positioning Foursquare as the application to check if you want any advise when you are visiting a new place dining at a new restaurant etc...

4- The Distribution channel is still narrowed to small shops where most of the testing is taking place but with Foursquare teaming with Zagat, Bravo, Conde Nast, The New York Times we can see where these people have their eyes set on.


I know it is a bit simplistic to study an innovative product according to traditional marketing standards. Believe me I‘m not that simple but only a lunatic would venture into defining what the business model of this new gadget is.

“it’s a bird…it’s a plane” who cares for now as long as it is flying

For now the “traditional” Internet model works; if there is traffic there is money… (Not that kind of traffic you stoners). For now all the money as stated above comes from the either advertising or from selling the analytics,

!!!!! But how good are your analytics if the customer doesn’t need to be present at the place to post his visit!!!!!

If people buy into this, next we might see a “Foursquare friendly” logo on the entrance of our local bars just next to Wi-Fi and the Visa/MasterCard logo. Here we are counting again on how much people will abuse the system and how the foursquare team will be able to redirect the usage into what benefits their model and increases their returns.

Another note is that there is a general consensus that Foursquare will generate more money once it is more geographically segmented.

This Article was partially based on articles from Forbes.com, The New York Times and Wikipedia.com