Roger Ma's Foursquare Business Case Presentation For Marketing 476 - Summer 2013 - SDSU


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Roger Ma's Foursquare Business Case Presentation For Marketing 476 - Summer 2013 - SDSU

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Roger Ma's Foursquare Business Case Presentation For Marketing 476 - Summer 2013 - SDSU

  1. 1. FoursquareFoursquare Business Case PresentationRoger MaMarketing 476
  2. 2. Foursquare’s History/Overview• Social networkingapplication/website started byDennis Crowley and NaveenSelvadurai in NYC• “Check-in” concept popularizedby company• Allows users to let people ontheir friends list to know theirwhereabouts, brag about beingat a certain location, doing acertain activity somewhere, etc.
  3. 3. Foursquare’s Overview Continued• Points are accumulated basedon the number of check-ins (alsobased on first-time check-in at aparticular venue or businesscategory, checking in again at aprevious location, etc.)• Recognition given to active usersin the form of “badges” whenchecking into certain places ordoing a certain activity and“mayorship” when one checks inthe most during a certaintimeframe
  4. 4. Foursquare’s Decentralization• Allows users to uploadpictures of local businesses(similar to Yelp).• Users can add “tips” forother visitors to thebusiness, giving insight onthings such as “best dish”in the restaurant• Businesses can create theirown specials for users thatcheck-in to their businesslocation (e.g. – take 20% ofyour bill, free coffee, freedrinks for theMayor, etc., etc.)
  5. 5. Foursquare’s Decentralization Continued• Users can create their own lists for others to follow, such as “San Diego’sBest Coffee Houses”• Users are able to report misuse or spam of other user accounts• Users can “Suggest An Edit” for businesses with contact info that isn’t upto date or is wrong, such as an address or phone number
  6. 6. Foursquare’s Decentralization Benefits• Company does not have to moderate butinstead has proactive users who are willingto do this work voluntarily, saving thecompany a lot of time and finances• Everything is community-based, somoderation/approval from company is notrequired for business specials created, useradded tips, etc. Company retains much ofit’s money and time for other expenses
  7. 7. Key Competitors• Facebook’s Places – Made theirown version of Foursquare’scheck-in concept. The ability toadd business tips and have theoption to edit business info isalso made available byFacebook.• Yelp – Also followed Foursquareand implemented their owncheck-in option for businesses.Just like Facebook, they alsoallow business tips and theability to edit a business. CopiedFoursquare’s “Mayorship”concept with their own, underthe label “Duke or Duchess”
  8. 8. Key Partners• Partnered up with Visa & Mastercard(AMEX in the past) to offer discountsto those who check-in at participatingbusinesses• Instagram uses Foursquare’s locationservices to allow their users topinpoint the location of where theirphoto was taken• Many API developers are partners:Vine, Waze, Foodspotting, just toname a few.• Twitter has been allowing Foursquarecheck-ins to show up as Tweets. Theyalso recently implemented a “GetFoursquare app,” & “Open inFoursquare App” for Tweets thatoriginated from Foursquare
  9. 9. Userbase• 30 million users (as of January 2013 onFoursquare’s website)• Over 1 million business users who take advantageof this potential market
  10. 10. Stakeholders• Business owners who have their businesses listed onFoursquare• Users who rely on Foursquare’s location services to findlocal businesses or business added tips to assist themon evaluating the particular business• Many of the VCs (Union Square Ventures, OReillyAlphaTech Ventures, Andreessen Horowitz, SparkCapital) & angel investors who funded the company• Employees at their New York City HQ, San Francisco &London offices• API developers who partnered up with Foursquare
  11. 11. Decentralized Structure in Eco-System• Allow many API developers to partner up, giving each other a boost in theonline world (and much more credibility)• Users are able to rate/critique businesses, also upload pictures and addbusinesses to their “favorites lists,” which is practically freepromotion/marketing for the business• Foursquare has a large user base that voluntarily keeps an eye on issues orerrors with the app or site, keeping expenses down. This allows thecompany to focus on other business endeavors• Adds a competitive aspect, as users accumulate points &mayorships, which causes other users to use Foursquare more to keep upwith this ongoing “game”• Other popular apps use Foursquare directly on their platforms, allowingeach other to benefit from the partnerships and stay around a lot longer• Businesses promote check-in specials and bring in much traffic to boththeir business and Foursquare, keep users loyal• Employees are given plenty of autonomy. Allowed to take both unlimiteddays off and sick days. Laptop of their choice is given, along with fullhealth care. Employee morale is definitely high
  12. 12. Assets• The first to popularize the check-in concept (notthe trailblazer but the one who made itprominent)• Great partnerships with many companies &businesses. Businesses are allowed to have apage set up with followers. Also, specials createdby business allows users to continue coming backand using Foursquare. This creates WOM andthose within their social circles will likely join in
  13. 13. Funding• Foursquare gets much of it’sfunding from VCs: Union SquareVentures, OReilly AlphaTechVentures, AndreessenHorowitz, Spark Capital• Angel Investors include:Founders ofTwitter, Digg, Delicious andmany others• Able to raise funding throughSeries A & Series B round ($1.35million for Series A & $20million in Series B). Another$50 million was raised in 2011.• Company is valued at roughly$600 million
  14. 14. Unique FeaturesThough not the trailblazer for check-ins, they are for many of it’s features:-Mayorship (bragging rights for theindividual who frequents a business themost). Many businesses see the powerin these type of users and offer themspecials, such as “Free drinks for theMayor and all his friends” when he/shechecks in-Badges: Badges are given when userscheck-in a number of times (such as 3times at a sushi joint or coffeehouse, e.g. Jetsetter badge for checkinginto 3 airports, etc.)-Business Tips: Allows other users whocheck-in to see what they shouldorder, buy or what is popular at theparticular business (Facebook and Yelphas since followed this trend started byFoursquare)-Exclusivity: Users feel part of a inner-social circle as they gain specials othernon-users of Foursquare do not get
  15. 15. Personalized Results• Foursquare gives you resultsbased on the type of places youcheck-in to (such as suggestingyou to visit a bar with a similarenvironment of a previous spotyou visited)• Suggestions are made for whereto go after you leave the currentlocation(based on where peoplefrequently go after a certainspot, such as going to a dessertshop after grabbing dinner indowntown)• Hot spots are given based on whatyour social circle frequents!• “Trending” spots are alsogiven, allowing you to either flockthere or avoid it
  16. 16. Revenue Model• Foursquare made much of theirrevenue from through promotedlistings paid for by larger nationalcorporations (e.g. TacoBell, Radio Shack, etc.)• Small merchants are now able totarget local target markets on apay-per-click basis (whichFoursquare labels as “per action”basis). They are target either bycategory (from past check-ins) orby vicinity• Daily deal sites partnered upwith Foursquare, so deals aresent out only for places you havebeen to (so it doesn’t becomeannoying such as Groupon dailyemails for irrelevant places)
  17. 17. Intellectual Property• Being a social networking site and app, much ofwhat is uploaded onto Foursquare (, business tips, etc.) may be copyrightedand infringement can occur if a user uses IPfrom another and uploads it as his or her own.Foursquare states “It is Foursquares policy to(1) block access to or remove material that itbelieves in good faith to be copyrightedmaterial that has been illegally copied anddistributed by any of ouradvertisers, affiliates, contentproviders, members or users; and (2) removeand discontinue service to repeat offenders.”
  18. 18. Intellectual Property Continued• Foursquare had initially attempted totrademark “check in” and “Foursquare checkin” but ran into some issues with these termsbeing “descriptive or informational”• They don’t allow API developers to use certainwords such as “check-in” or “4SQ” asstandalone words in any of their works(