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Since the very first time Tim O'Reilly defined the concept of Web 2.0, he clarified that its key principle is to harness the collective intelligence by creating an architecture of participation that interacts with users either explicitly or implicitly to gather information. Foursquare is a Web 2.0 application that represents harnessing the collective intelligence at its best with 700,000 check-ins a day and expectations to hit the 1 million milestone sometime around the middle of June 2010 (Van Grove, 2010). Foursquare strategy for success is to rely on users to add value and the network effects to extend this value by maintaining some of the following best practices to approach this pattern:
Reward the user first.
Set network effects by default.
Involve users explicitly and implicitly.
Provide meaningful context for creation.
Trust your users.
Design software so that it improves as more people use it.
Facilitate Emergence.
Foursquare adopts a short and simple sign up process with connecting with Facebook as a hassle free alternative join up option, users can immediately share their whereabouts and enjoy the full features of the application with the ability to link Twitter and Facebook accounts to give them a feel of an instant connectivity with their friends on other social networks. Despite the unfussy registration steps, Foursquare eliminates all the barriers between its services and unregistered visitors allowing them to benefit from it either using the search tool or by following the users' recent activities. Foursquare set its users' default privacy settings with minimum limitations to achieve the greatest possible openness knowing that most of the users will accept the default settings as is.
The reward system of Foursquare is designed in a game style so users keep checking in to add venues, write tips and tag and categorize places; Which gives users the needed incentive to explicitly participate as they acquire points for almost everything they do on the application. In addition, users can obtain unique badges for different accomplishment which can be awarded to a single user at a time adding a competitive component to the application.
Foursquare is programmed in a way where it gets the hard work of organizing the content done implicitly as a side effect of its users' explicit interaction with the application logging the details of their whereabouts, which will eventually be returned as neat top lists when searched for using keywords. Implicit participation is not limited to the search results; it also produces a list of Òwho have been thereÓ, stats generated about each place like the number of check ins and unique visitors which can give others a clue about the popularity of the place.
Recently, location-based social networks have exerted a pull on the fashion industry after realizing how critical such masses are in marketing. Foursquare Ðgrowing 15.000 users per day- have been used by Marc Jacobs, Jimmy Choo, and Diesel to run some advertising campaigns (Lee, 2010). A great future for Foursquare can be foreseen already as a marketing tool, with all the data it has from its users marketers can follow their customers where they go or even better attract them to new places. Foursquare can introduce new features in the future if it invested more in analyzing its existing data to generate some recommendation lists like: suggested hangouts, new places you will likeÉetc based on users' preferences and previous check ins.
Today, data is the key element every Web 2.0 application should establishes its success strategy around to stay on top of the game and gain an upper hand in the competition. Foursquare was built from the beginning with the concept of ÒData is the next 'Intel inside' in mind, joining the race to own a unique powerful database by harvesting and managing users' location-related data. Leveraging the network effects, Foursquare gained a massive competitive advantage over its contenders applying a variety of ÒData is the next Intel InsideÓ best practices:
Seek to own a unique, hard to create sort of data.
Enhance the core data.
Users control their own data.
Make some rights reserved, not all.
Own the index, namespace, or format.
Design data for reuse.
Outsource or supply data access management.
Tim O'Reilly while defining Web 2.0 in 2005 said: ÒIn many cases, where there is significant cost to create the data, there may be an opportunity for an Intel Inside style play, with a single source for the data. In others, the winner will be the company that first reaches critical mass via user aggregation, and turns that aggregated data into a system service. Foursquare grasped this concept very well knowing it's not alone in the market, it enhanced its core data with users' comments, tips, tags, and ratings; this sort of users' behavior aggregation led Foursquare to acquire a unique source of valuable data.
Foursquare announced the launch of its API in 2009; offering a way for users and developers to move their data out of its walls fulfilling O'Reilly's expectations of free data movement. Since then many developers submitted great applications that eventually helped Foursquare grow even bigger as it reached more users.
Foursquare became one of the famous search destinations when it comes to location, users are using its services to find hangout for the weekends, explore new cities. Bing perceiving this momentum, rolled out a Couple of months ago the feature of adding Foursquare data into its maps, enabling users while browsing maps to read Foursquare users' tips and reviews about the places. Foursquare, on the other hand is using Google maps to provide users with direction to their desired venues, reducing costs by outsourcing some of the services. Foursquare connectivity options with Facebook and Twitter allow for higher distribution and better syndication between social networks.
By joining, users are agreeing to give Foursquare a non-exclusive control of their data not just its value that comes from its context; this practice may affect the way users are interacting with the application.
Foursquare acquiring a gigantic database of entries can hold a bright future for it to be used as a very powerful enterprise tool. With the appropriate analysis algorithms, the small bits of irrelevant data can be joined together to form the big picture and predict the next big thing; ÒEnterprise data, bound together by data analysis, may become such a tightly woven fabric that recommendations can be made at each check-in.Ó says Alex Williams.
Foursquare is an exceptional web platform that delivers innovation in assembly better than any other. M. Levy (2009) illustrates that innovation comes from developing services rather than the application. An individual application will initiates innovation if can be assembled with other services (p.122). Foursquare is a platform that utilises the web and mobile technology to provide a unique application strategy that provides open APIs which developers can use to produce new applications.
The open standards of Foursquare APIs play a vital role in attracting developers and are supported by integration with many mobile platforms which provide data and services. This strategy allows developers to foster innovative applications for children in the foundations of Foursquare API and is key to the success of Web2.0.
Specific Foursquare examples of innovation in assembly are:
Friends around A location based mobile- only social network that allows you to easily meet people around you and stay connected with friends.
PeeFree Helps with urgent matters while traveling, i.e public bathrooms.
Running Unite lets friends know about your running and invites others to run with you.
These are three of the dozens of developed applications which use Foursquare's API. The growth of Foursquare is directly related to this API strategy which implements many of the innovations in assembly best practices. The benefit of this strategy is that businesses can have scalable growth that incorporates third-party innovation that would not likely be possible from the company's resources. Foursquare has ensured that this occurs by allowing for numerous APIs across mobile and web platforms. This has resulted in continual customer acquisition and third-party applications have allowed Foursquare to thoroughly understand how customers prefer to use their service and grow as an application and platform.
In this analysis, the follow Web2.0 best practices have been examined.
Web2.0 Best practices
Focus on creating genuine developer support infrastructure, including forums, mailing lists, developer focused blogs.
Full documentation, sample code in multiple development languages
The use of Ids to manage and monitor usage. Self service system account management
Design for remixability
Support multiple data formats and delivery mechanisms
The best practices for designing an application that successfully delivers innovation in assembly have been critically analyzed against Foursquare. Research into Mobile Driven Design techniques by Blum et al (2010) indicates that open APIs used by third-party developers enable customer/users to design, animate, validate, and control their processes throughout the life-cycle of the application (p.359). Foursquare has implemented many of the best practices and allowed for third-party developers to contribute to the life cycle of their service. Detailed in their documentation (located on Google Groups) API source code for development using XML or another separate third-party APIs like JSON. XML is a simple markup language that can facilitate HTTP protocols while JSON has similar attributes, however, it is an open -source API suitable for mobile platforms POST and GET functions. That both have limited documents shared by Foursquare.
Successful innovation in assembly can be a more effective way to scale an application beyond the capabilities of the website itself. Google Maps is one of the most successful examples of implementing best practice. One of the key success elements is Google's self-managed developers portal, Google Code. Foursquare outsources developers' resources and there is also no internal website specifically for developers. The lack of support provided by Foursquare is discouraging, and could diminish the attractiveness of developing applications for Foursquare. Under a new umbrella whereby Foursquare provides internal management for a self servicing developing community, Foursquare would potentially assist and also maintain innovation while providing a constructive evolution of the platform. This style of third-party community would also promote remixability of design between other developers in the community meeting best practice beyond the current service.
Innovation in assembly has been demonstrated in Foursquare's strategy. This pattern however, could be applied with greater efficiency and effectiveness. Admittedly, Foursquare's Open API has been accessible to developers since November 2009, duration of only 6 months. As a greater number of developers find interest in this Web2.0 application, the need for support and management will be apparent. Presently, the support for developers is very limited, and much of it is outsourced. Improved communication, sample codes, and developer self-management schema would help facilitate innovation in assembly and follow some of the key best practices. Thus, creating scalable growth and enhancing the development community will ultimately support the life-cycle of Foursquare as a Web2.0 platform and a business.
The elements of a rich user experience equate to a dynamic and compelling experience beyond the traditional HTTP/HTML. Rich Internet Applications (RIA) have been giving websites a new dimension of interactivity through the browser interface. Fraternali (2010) examines Web 2.0 and in his research, highlights that RIAs are supported by the lightweight distribution architecture which provides improved data migration, communication, display, and business logic (p9). Many different online models and techniques facilitate a richer experience. Foursquare demonstrates a participative, user generated, interactive content that is enhanced by real-time news feeds using light weight distribution architecture. Foursquare integrates AJAX to provide content updates on the pages, seemingly without diverting, in the true style of rich user experience. Users can collaborate, engage with the virtual community, and be rewarded for participation that is relevant to the user. The combination of these features creates a competitive advantage that correlates with participation. A strategy dependent on acquisition by customers is risky, but if the this user experience is as unique as it is rich, it will successfully encourage viral marketing. To further examine this pattern, some of the best practices have been considered.
Rich interactively
Platform independence
Usability and simplicity
Wide spectrum of interaction and possibilities
Search over structure
Adaptiveness and personalisation
The interactivity of Foursquare is fundamental to its success. The user-generated content creates a community of people that are joined via location specific events and objects. The content is lightweight and is primarily run from a mobile application. This formula of content and mobile is highly engaging and interactive. Linaje et al (2007) discuss the significant changes in Web2.0 user centric RIA that promote social network and user-generated content management. Foursquare applications support this discussion as the premise of its Web service is user generated social networking.
A rich user experience requires platform versatility that discourages limitations to access. Mobile computing devices interconnect to the web with the external environment, and facilitate ubiquitous computing. Foursquare targets location- specific involvement from the mobile device, implementing ubiquitous computing concepts to enhance the user experience. Usability is a key element of a rich user experience and is difficult to achieve across multiple platforms. To Foursquare's credit, it has achieved excellent usability through simplicity, due to the designers' focus on Foursquare's core competencies.
The spectrum of interactions is endless for Foursquare. It has very few limitations as its competitive advantage is user content driven. Furthermore, the mobile device provides ongoing enhancements of increased features and interactive possibilities. This will support growth for Foursquare and increase the application user functions and its commercial opportunities, including passive location-specific advertising. Uniquely, Foursquare's integration into mobile devices allows automated searches to be dependent on the users location. Furthermore, Web2.0 social networking sites are expected to allow for personalisation. Users now have a digital imprint that transcends many forms of Web2.0 applications and Foursquare is no different. Profiles distinguish users from one another and content is modified specifically for the users' interactions with the application. Improved profiling could allow for specific content to be targeted to user, much like other Web2.0 websites, such as Ebay. They use a similar method of pushing products to customers, determined by views and purchases. Foursquare would gain user interest more effectively if the content had more validity than being just location specific and instead, it could also take into account the age, occupation and participation of the user or add other profiling characteristics.
The combination of multiple elements within an RIA design certifies its ability to provide a rich user experience. One of the key elements of Foursquare's success is its adaptability across multiple platforms. This is possible due to its simplistic design and its foresight into ubiquitous computing. Future opportunities relate to improved personalized content that specifically target users. This could potentially provide commercial opportunities, but could also improve search functions. Much of this will depend on the specific mobile devices and web privacy related issues. Nevertheless, this could potentially enhance the user experience through the intelligence of the crowd.
As technology has developed, so too has the Web and it is expanding constantly. Currently, we are in the Web 2.0 era and ÒSoftware above the level of a single deviceÓ is one of the principles of Web 2.0 design. This is the successor of the traditional Web 1.0.
In today's world, people not only access information through an individual computer, but through a wide variety of other devices such as PDAs (Personal Digital Assistant), Smartphones, personal media players and so forth. At the EclipseCon 2005 conference, Tim O'Reilly stated that ÒThe PC is no longer the only access device for Internet applications, and applications that are limited to a single device are less valuable than those that are connectedÓ. Therefore, Internet/Web 2.0 applications are not limited to a single device or a platform. At the same time, they are able to be accessed by handheld devices, PCs and the Internet. As well, they need to be worked at all locations.
FourSquare is a location-based-service (LBS) and cross-platform mobile web application which is an information and entertainment service, accessible with mobile devices through the mobile network and one which utilizes the ability to make use of the geographical position of a mobile device (Wikipedia, 2010). It fits the description, ÒSoftware above the level of a single deviceÓ in that its data and services are integrated across multiple devices, browsers and Internet servers.
David Weinfeld (2010) stated that ÒMobile is often viewed as the connective tissue between our digital and physical worlds, adding place-based media screens to the mix enhances the cross-platform experienceÓ. In other words, FourSquare provides its web services on mobile devices to encourage its users to interact socially and keep contact with other users via mobile devices while using game mechanics to reward users for experiencing new things. The FourSquare application uses a built-in GPS system of mobile phones to track a person's location and photos are taken using cameras. Downloads of the application are available for platforms like iPhone, Blackberry, Android, Palm and systems running Web OS. It is also currently being developed for Nokia handsets (Guim, 2010). Mobile phones which do not have a web browser can still access its service by using its SMS shortcode to check-in and by sending text messages to the FourSquare service portal (50500). Therefore, each platform is used to its maximum strength and data is shared between devices and services.
In November 2009, FourSquare released its Application Programming Interface (API). The FourSquare API enables developers to build applications that interact with the FourSquare platform (FourSquare 2010). In another words, FourSquare will soon be able to be supported on more devices.
O'Reilly defines the concept of perpetual beta by stating that Òthere is never a definitive version and software remains under development and improvement as long as it existsÓ. Following this concept, the software is commercialized before it is Ôfeature complete' or free of programming bugs, Ôdeveloped in the open, with new features slipstreamed in on a monthly, weekly, or even daily basis'Ó (Efthymios and Stefan, 2007). In other words, in the Web 2.0 era, software has become a service, which is to be released in beta format to the public early and is always refined and constantly improved based upon user feedback. User feedback ensures maximum usability of the applications. Usability is important because these applications rely on user contributions (Osimo, 2008). Therefore, users become co-developers or real-time testers and make operations (24/7 ongoing daily care and feeding of online services) a core competency. This is a new way of thinking about software development and provides a new perspective on the software business.
Benefits
Releases earlier and enters market faster
Builds a stronger and closer relationship with customers
Uses feedback as real-time data to make decisions to improve services
Reduces risk
Increases customer's responsiveness
Best practices
Releases early and releases often
Engages users as co-developers and real-time testers
Makes operations a core competency
FourSquare demonstrates the Web 2.0 principle of ÒPerpetual BetaÓ and has seen success through these innovations. The FourSquare team is always open to suggestions on how to improve the application (FourSquare, 2010) on different devices such as Blackberry and Palm. Therefore, they have invited people to join the FourSquare beta team in order to help them to test out the latest FourSquare applications, to maximize the usability of these applications and to integrate users' feedback into the core product. Team FourSquare could produce a service/feature which could further meet current users' needs and preferences.
FourSquare has released their application for the BlackBerry as public beta, giving the largest number of Smartphone owners access to the location based social network that iPhone and Android users have had for a while (Trumble, 2010). FourSquare engages 500 beta invited users in such tests before rolling out products. More than 5000 beta testers are actively testing the BlackBerry beta application before its official release. During its time in Beta, FourSquare has constantly introduced new features and changed its services, improved speed, battery life and the integration with Facebook, Twitter and many more. In other words, the application will undergo constant testing and evaluation to be ready to go to a mass market.
Leveraging the long tail, a term coined by Chris Anderson(n.d.), refers to businesses which target niche markets that collectively turn similar profits to traditional products that are sold to large, mainstream markets.
Foursquare has built on the driving forces of the long tail through harvesting the collective wisdom of its users. All of the data used by Foursquare has been entered by the users. Foursquare allows users to create new locations, make comments about locations and even edit or merge locations. Such functionality means the users are helping to extend the long tail of Foursquare and create new markets for the application. However, incorrect or inappropriate data is often uploaded (About Foursquare, 2010). Solving this problem cost effectively has meant the introduction of superusers. Superusers are able to merge, delete and update locations dependant on their level (Foursquare, 2010). The superuser responsibility's are given to long term users of the application. Furthermore, Foursquare leverages customer self-service. Users are responsible for creating and managing their own accounts negating the need for any employees to create accounts.
Secondly, Foursquare utilises algorithmic data to match its users to content. Users are alerted to content deemed relevant to themselves based on their current locations, friends' check- ins and past check- ins. Such practices expose users to niche products, locations or services that are highly relevant and which would not have been noticed otherwise.
At any point in time, a user may 'check in' to any number of locations that they are near. To better allow users to 'check in' efficiently, the locations that people are most likely to check into are displayed higher on the screen. Such a feature is an example of how Foursquare uses an architecture of participation to match supply and demand. The rankings on the screen are based on an algorithm that determines locations which people check into regularly (ie the number of check- ins). As a result, irrelevant or incorrect locations which a user has uploaded are pushed to the bottom of the list and are likely to be deleted by a super user.
Crowley, founder of Foursquare, has also outlined the idea of a 'top 12 list' where users are rewarded for trying new products or activities recommended by their friends (Lowensohn, 2009). He believes this will have more success than reviews, because often people do not bother to read them.
The five best practices associated with leveraging the long tail that Foursquare have employed include:
Build on the driving forces of the long tail
Use algorithmic data management to match supply and demand
Use an architecture of participation to match supply and demand
Leverage customer self-service to cost effectively reach the entire web
Leverage the low-cost advantages of being online
Foursquare has utilised viral marketing to gain market share (Crowley, 2010). Parties organised by Foursquare users are one such example of this. Viral marketing will be discussed further in the next section of this analysis.
By applying best practices of leveraging the long tail (Anderson, n.d.), Foursquare has enabled itself to capture a diverse range of markets and offer consumers better choices. However, trying to create a platform which everyone can enjoy means that there is always room to improve these strategies.
Amazon.com uses an algorithm utilising past search and purchase history of its users to recommend products a user may not have otherwise been exposed to (Kane, 2002). Foursquare could enhance its current algorithms to expose users to new locations, products or activities. This would be beneficial to users and businesses and would increase the value of the platform.
To date, business partnerships between Foursquare and companies which purchase marketing have only existed between very large companies, such as Microsoft, HBO and Dominoes (Lowensohn, 2009). Such deals require personal attention by sales staff at Foursquare. There is a great potential of revenue to be increased by allowing small, niche businesses to market through Foursquare. However, it would not be economically feasible for each business to receive personal attention from sales staff. Foursquare may benefit from following a model similar to adwords where users are able to set up their own marketing campaign through the application (Google, 2010). Such infrastructure is currently being developed and will allow niche markets to effectively manage a Foursquare campaign and create a scalable revenue model.
Yarow (2010) reports Foursquare will reach one million users faster than Twitter through following some best practices in creating a scalable Web 2.0 application. Lightweight and scalable business models have been made possible through cheaper hardware, free open source codes, free marketing and distribution and powerful programming languages reducing the need for large development teams (Graham, 2008). Foursquare is a great example of this as their initial team consisted of two people and Foursquare took only two months to develop (Guynn, 2010).
Such success was possible through employing the best practices of this pattern which include:
Scale with demand
Syndicate business models
Outsource whenever practical and possible
Provide outsource infrastructure, function and expertise
Scale your pricing and revenue models
Foursquare's ability to scale with demand was no accident and was made possible through the following scalable business and technical practices. Amazon.com hosts the application's servers in Seattle, Washington, allowing the company to pay for only the storage and bandwidth it uses (Thewebinfo, 2010). Furthermore, as mentioned previously, content is generated and moderated by the users. Such activities have reduced the need for initial capital funding for Foursquare.
Foursquare Labs inc. privacy policy states, "We employ other companies and people to perform tasks on our behalf" (Foursquare, 2010) and in fact the job of creating developer APIs is one example. Outsourcing practices allow the company to scale with growth and may extend to developers or sales' employees.
Syndicating the functionality of other applications in Foursquare resulted in a faster time to market and an improved application. Foursquare syndicates the functionality of Google Maps and twitter. Maps is used when clients 'check in' and the Twitter API allows tweets made in an area to be visually displayed on a map. Offering an open API, Foursquare allows third party developers to build on the platform they have created (About Foursquare, 2010). This practice allows other developers to build on and improve the platform and data.
Foursquare pushes 'check- ins' and other user information to their personal Twitter and Facebook accounts to take advantage of viral marketing. Lowensohn (2009) reports that Cowley intends to add functionality whereby users can invite friends from their Gmail address books. Users can also be imported from other web services including Facebook and Twitter allowing users to quickly and easily encourage their friends to join the service.
Foursquare operates a variety of revenue models that revolve around marketing. Currently, partners of Foursquare work in tandem to create games to lure customers into businesses. One such example is the UK Starbucks cafes, at which the person who visits the cafe the most out of all users is entitled to $1 off each coffee they purchase (Thompson, 2010). Foursquare has also outlined the future scope of marketing through Foursquare which includes awarding badges to users based on purchases or locations and allowing businesses to offer coupons (Lowensohn, 2010). Marketing through Foursquare is well targeted because information such as a persons location, previous visits and interests can be tracked.
Following the best practices outlined by O'Reilly's (2005) web 2.0 pattern of light weight and scaleable models has resulted in Foursquare having a fast time to market and an adaptable application with minimal financial risk. However, Foursquare's business model could be improved.
Outsourcing infrastructure, function and expertise is common practice amongst many Web 2.0 companies such as Amazon.com who outsource their servers and data among many other assets and services. Such outsourcing creates another revenue source and maximises profit further allowing a company to do what it does best. Foursquare may profit through outsourcing their GPS and mobile device expertise. This would diversify their revenue stream and create improved revenue stability.