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

1. Foursquare
Foursquare Business Case Presentation
Roger Ma
Marketing 476

2. Foursquare’s History/Overview
• Social networking
application/website started by
Dennis Crowley and Naveen
Selvadurai in NYC
• “Check-in” concept popularized
by company
• Allows users to let people on
their friends list to know their
whereabouts, brag about being
at a certain location, doing a
certain activity somewhere, etc.

3. Foursquare’s Overview Continued
• Points are accumulated based
on the number of check-ins (also
based on first-time check-in at a
particular venue or business
category, checking in again at a
previous location, etc.)
• Recognition given to active users
in the form of “badges” when
checking into certain places or
doing a certain activity and
“mayorship” when one checks in
the most during a certain
timeframe

4. Foursquare’s Decentralization
• Allows users to upload
pictures of local businesses
(similar to Yelp).
• Users can add “tips” for
other visitors to the
business, giving insight on
things such as “best dish”
in the restaurant
• Businesses can create their
own specials for users that
check-in to their business
location (e.g. – take 20% of
your bill, free coffee, free
drinks for the
Mayor, etc., etc.)

5. Foursquare’s Decentralization Continued
• Users can create their own lists for others to follow, such as “San Diego’s
Best 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 up
to date or is wrong, such as an address or phone number

6. Foursquare’s Decentralization Benefits
• Company does not have to moderate but
instead has proactive users who are willing
to do this work voluntarily, saving the
company a lot of time and finances
• Everything is community-based, so
moderation/approval from company is not
required for business specials created, user
added tips, etc. Company retains much of
it’s money and time for other expenses

7. Key Competitors
• Facebook’s Places – Made their
own version of Foursquare’s
check-in concept. The ability to
add business tips and have the
option to edit business info is
also made available by
Facebook.
• Yelp – Also followed Foursquare
and implemented their own
check-in option for businesses.
Just like Facebook, they also
allow business tips and the
ability to edit a business. Copied
Foursquare’s “Mayorship”
concept with their own, under
the label “Duke or Duchess”

8. Key Partners
• Partnered up with Visa & Mastercard
(AMEX in the past) to offer discounts
to those who check-in at participating
businesses
• Instagram uses Foursquare’s location
services to allow their users to
pinpoint the location of where their
photo was taken
• Many API developers are partners:
Vine, Waze, Foodspotting, just to
name a few.
• Twitter has been allowing Foursquare
check-ins to show up as Tweets. They
also recently implemented a “Get
Foursquare app,” & “Open in
Foursquare App” for Tweets that
originated from Foursquare

9. Userbase
• 30 million users (as of January 2013 on
Foursquare’s website)
• Over 1 million business users who take advantage
of this potential market

10. Stakeholders
• Business owners who have their businesses listed on
Foursquare
• Users who rely on Foursquare’s location services to find
local businesses or business added tips to assist them
on evaluating the particular business
• Many of the VCs (Union Square Ventures, O'Reilly
AlphaTech Ventures, Andreessen Horowitz, Spark
Capital) & 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. Decentralized Structure in Eco-System
• Allow many API developers to partner up, giving each other a boost in the
online world (and much more credibility)
• Users are able to rate/critique businesses, also upload pictures and add
businesses to their “favorites lists,” which is practically free
promotion/marketing for the business
• Foursquare has a large user base that voluntarily keeps an eye on issues or
errors with the app or site, keeping expenses down. This allows the
company 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 up
with this ongoing “game”
• Other popular apps use Foursquare directly on their platforms, allowing
each other to benefit from the partnerships and stay around a lot longer
• Businesses promote check-in specials and bring in much traffic to both
their business and Foursquare, keep users loyal
• Employees are given plenty of autonomy. Allowed to take both unlimited
days off and sick days. Laptop of their choice is given, along with full
health care. Employee morale is definitely high

12. Assets
• The first to popularize the check-in concept (not
the trailblazer but the one who made it
prominent)
• Great partnerships with many companies &
businesses. Businesses are allowed to have a
page set up with followers. Also, specials created
by business allows users to continue coming back
and using Foursquare. This creates WOM and
those within their social circles will likely join in

13. Funding
• Foursquare gets much of it’s
funding from VCs: Union Square
Ventures, O'Reilly AlphaTech
Ventures, Andreessen
Horowitz, Spark Capital
• Angel Investors include:
Founders of
Twitter, Digg, Delicious and
many others
• Able to raise funding through
Series A & Series B round ($1.35
million for Series A & $20
million in Series B). Another
$50 million was raised in 2011.
• Company is valued at roughly
$600 million

14. Unique Features
Though not the trailblazer for check-
ins, they are for many of it’s features:
-Mayorship (bragging rights for the
individual who frequents a business the
most). Many businesses see the power
in these type of users and offer them
specials, such as “Free drinks for the
Mayor and all his friends” when he/she
checks in
-Badges: Badges are given when users
check-in a number of times (such as 3
times at a sushi joint or coffee
house, e.g. Jetsetter badge for checking
into 3 airports, etc.)
-Business Tips: Allows other users who
check-in to see what they should
order, buy or what is popular at the
particular business (Facebook and Yelp
has since followed this trend started by
Foursquare)
-Exclusivity: Users feel part of a inner-
social circle as they gain specials other
non-users of Foursquare do not get

15. Personalized Results
• Foursquare gives you results
based on the type of places you
check-in to (such as suggesting
you to visit a bar with a similar
environment of a previous spot
you visited)
• Suggestions are made for where
to go after you leave the current
location(based on where people
frequently go after a certain
spot, such as going to a dessert
shop after grabbing dinner in
downtown)
• Hot spots are given based on what
your social circle frequents!
• “Trending” spots are also
given, allowing you to either flock
there or avoid it

16. Revenue Model
• Foursquare made much of their
revenue from through promoted
listings paid for by larger national
corporations (e.g. Taco
Bell, Radio Shack, etc.)
• Small merchants are now able to
target local target markets on a
pay-per-click basis (which
Foursquare labels as “per action”
basis). They are target either by
category (from past check-ins) or
by vicinity
• Daily deal sites partnered up
with Foursquare, so deals are
sent out only for places you have
been to (so it doesn’t become
annoying such as Groupon daily
emails for irrelevant places)

17. Intellectual Property
• Being a social networking site and app, much of
what is uploaded onto Foursquare (e.g.
pictures, business tips, etc.) may be copyrighted
and infringement can occur if a user uses IP
from another and uploads it as his or her own.
Foursquare states “It is Foursquare's policy to
(1) block access to or remove material that it
believes in good faith to be copyrighted
material that has been illegally copied and
distributed by any of our
advertisers, affiliates, content
providers, members or users; and (2) remove
and discontinue service to repeat offenders.”

18. Intellectual Property Continued
• Foursquare had initially attempted to
trademark “check in” and “Foursquare check
in” but ran into some issues with these terms
being “descriptive or informational”
• They don’t allow API developers to use certain
words such as “check-in” or “4SQ” as
standalone words in any of their works
(https://foursquare.com/legal/api/trademarku
sage)