Let me start by saying that the first time somebody told me about FourSquare I couldn’t understand how it could be such a success on the Internet. A social network? Another one?! This time to “help” users share their locations and favorites places with their friends? Who the hell wants or needs that?!
Well I was quite wrong… To learn a bit more about it I logged in last week-end and also downloaded the application onto my Blackberry (yes! there are special FourSquare applications for BB, IPhone, Androide…). What really surprised me is that FourSquare is above all a game! You sign-in when you go to a bar, cinema, museum… and let your friends know where you are. The more places you visit, the more points you get. Easy! You can even win “badges” (if you go to 50 different locations for example) and also become “Mayor” of a place (if you’re the one with the most visits!)
For me this game aspect is the key success of FourSquare. First of all because it gives a reason to people to share their location. In my case (and I think I’m not the only one) I wouldn’t share where I am for free (who the f… cares where I am and what I am doing?!.. Unless someone is trying to stalk me!!). But if it is a game… that explains everything. Even more if you’re a player and you like to win… It also a key success for me ‘cause it makes it much more addictive. You want those badges!!
People can also leave comments about the places they visit (great place, what to order, don’t miss this or that…)… so at the end of the day FourSquare is also a “guía del ocio” created by and for the users where you can get good tips about places you don’t know.
Because I’m currently doing an MBA I couldn’t see an application like that without wondering about its Business Model! How the hell could a social network like FourSquare make money?!
I first looked up the internet and found out that a few weeks ago FourSquare’s valuation on the market was between 60 to 70 millions dollars. Today probably more… They now have around 800.000 users and are expecting to reach the million in the next few weeks (check links at the end of the post).
I believe that like any other social network (Facebook, Tuenti,…) FourSquare will earn money by sharing the information it gets about its users. What their preferences are, what time they connect to the Internet at, how many times, where they like to go on Saturday nights… This information is worth a lot for big companies that are interested in knowing more about their clients or getting more new customers. There are many different opinions on the net but Facebook users have a worth estimation between 3,6 to 250 usd for the company!!! Just multiply…
I believe Foursquare will (or is already?!) earning money with the establishment it promotes indirectly with its platform. It seems that people will go out more often (in order to sign-in, win more points and, why not, become the mayor of a bar) and will also follow the advise they can get from their new application… so restaurants, bars… establishments in general will be interested in being there and FourSquare will definitely charge for this. New advertising model? We could probably say that! In the US and UK some bars already give discounts to people that appear with the most visits of their establishment on FourSquare… Proof that it works, and that they are interested in promoting FourSquares to their customers cause they know it will suppose new customers and income in the future!
As I read in “Foursquare, la nueva niña bonita de los geeks” (see link below), FourSquare could also make money with companies that design applications allowing them to develop new app compatibles with its platform… For example a tool that measures the loyalty of customers in a particular establishment, the time they arrive at, how long they usually stay for and how much they usually spend… Many different possibilities…
I didn’t believe I could change this much… but after using FourSquare for a fews days and discovering the huge universe around it (and in general social network) I’m really interested in investigating more and, why not, trying to think up my own idea and set up a business with my own application!
Links of interest:
- Four VC Firms Battle For Foursquare, Valuation Goes Stratospheric (March 25th)
- Foursquare CEO: We’ll Hit 1 Million Members In A Few Weeks (March 30th)
- Foursquare, la nueva niña bonita de los geeks
- Foursquare y sus oportunidades (January 27th)
Exactly! you got the point!!!
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And using foursquare as basis for an additional application/business idea? Brilliant! Believe it or not, i also had this thought!
Happy days...to come =)
Interesting thought. Can be Foursquare the same leverage for many startups as twitter has been so far? (thinking in Topsy or Tynurl). Sure. Your time to find your own way.
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