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Foursquare Potential Revenue Streams
- 2. AGENDA
- 3. So what’s going on with foursquare? PROBLEM SOLUTIONS IMPLEMENTATION
- 4. Oh no!... What’s wrong? ANALYSIS SOLUTIONS IMPLEMENTATION
- 5. Let’s help them solve them!.. ANALYSIS PROBLEM IMPLEMENTATION
- 6. Bingo!... Ready, Set, Go! ANALYSIS PROBLEM SOLUTIONS
- 9. COMPETITORS
- 10. PROBLEMS AND DEFICIENCIES PRODUCT API MONETIZATION
- 11. PRODUCT • “Users can check-in a venue without having to go inside” No check-in control • GPS Restrictions (+/- 500m error) • No point redemption if too far • “Users have unlocked most of the badges” • Small/Intl cities have even less badges Low Badge Variety • Loose engagement • Competitor offers a large variety of stamps • “Doesn’t leverage on user’s historical Low profile-targeting activity to create customized offerings per user and suggest what they might like” • “foursquare does not acknowledge Faux-Locations physical space to check-in to except for venues”
- 12. API • Not enough documentation and No support for developers support for the API users • No software development kit • Want to control the user Strategy? experience completely? Release an API?
- 13. MONETIZATION Now # users 10 million # employees 120 Funding $50 million Valuation $600 million Generate revenue stream With 10 million users in their community, and 500,000 registered businesses, how can foursquare develop a sustainable business model to monetize what it has created? Predictions Expected Revenue Revenue: Multiple: $20 million 30x
- 15. 1 CHECK-OUT + EVENTS More time spent on foursquare More analytics
- 16. 2 FRIEND SUGGESTION ALGORITHM ENHACEMENT User’s location history Smarter Suggestions
- 17. 3 CROWDSOURCED BADGE STORE 30% 70%
- 18. 4 SOFTWARE DEVELOPMENT KIT SharpSquare FourSquare SDK for .NET
- 19. 5 CHARGE PER SPECIAL PUBLISHED Data Assumption: Merchant Assumption: 500,000 publishes 4 Drop-out merchants specials per Rate: 60% month (average) Price: $0.20 CPM Revenue: $1.9 million Revenue = 500,000 x 4 (specials published per month) x 12(months) x (1 – drop-out rate) x $0.20
- 20. 6 CHARGE PER REDEMPTION Price: $1 per Data redemption. CPA Assumptions: Revenue: 500,000 merchants Churn Rate: 70% Offers redeemed per day: $32.8 million Closing Ratio: 5% 150,000 x (1-drop-out rate) x 365 10 million users (days)x $1 = $32.8 million Dropout Rate: 40% 150,000
- 21. 7 CHARGE PER ANALYTICS 99.999% reliabilty robustness Bugs Rate Service 2 Business Opportunities: Customization, Freemium Pricing, SaaS
- 22. 8 BANNER ADS Easy to implement Would attract a high number of advertisers!! Is this affecting your experience as a user?
- 23. 9 PRIORITIZATION OF SPECIALS NEARBY Ad Rank U 1 A Distance 2 Ad Rank = Quality x Score Historical User Behavior Profile
- 24. PLAN OF ACTION
- 25. Alternatives Summary USER FEASIBLE GROWTH REVENUES SCORE EXPERIENCE Check-out 5 2 0 2 9 Suggestions 5 5 0 4 14 Badge Store 3 4 5 5 17 SDK 3 4 3 5 15 $ Special 4 2 2 1 9 $ Redemption 1 2 4 3 10 $ Analytics 3 3 3 4 13 Banners 5 1 3 0 12 Prioritization 4 5 5 5 18
- 26. GROWTH (#users) PRIORITIZATION SUGGESTIONS SDK BADGE STORE $ ANALYTICS $ SPECIALS CHECK-OUT $ REDEMPTION BANNERS REVENUES ($)
- 27. GROWTH (#users) PRIORITIZATION SUGGESTIONS SDK BADGE STORE $ ANALYTICS $ SPECIALS CHECK-OUT $ REDEMPTION BANNERS REVENUES ($)
- 28. Contingency Plan Usability Testing Re- prioritization Deploy Roll-Back
- 29. Thank you! And if you liked our analysis, follow us on 4sq!
Editor's Notes
- Platform (facebook) or service (groupon) ?