Four Square

Case Study: Four Square
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Case Study: Four Square
Successful entrepreneurship depends on the ability to identify an opportunity, develop effective strategies and gather the key resources. However, the interaction of innovation and entrepreneurship is what makes a business grow and expand (Kingston, 2014). Foursquare is a perfect example of a business whose growth and development has been defined by entrepreneurs’ skill, experience, and capability to focus on key aspects of management, operations, and finances. It was formed in 2009 as a social network for gaming and networking purposes (Piskorski et al., 2013). Its key use, however, was to check in the important places such as hotels, recreation points, parks, and clubs. Although the founders of Foursquare have forged towards its success through consolidation of resources, teamwork, skills, and knowledge, its future is not bright due to increased competition and technological shift.
Question 1-21
Foursquare fits the Schumpeter’s definitions in that it was developed out of a new idea that replaced outdated ones previously used in some failed projects. According to Joseph Schumpeter, this industrial situation in which an innovation improves an economic structure and constantly replaces the old one is creative destruction (Kingston, 2014). Evidently, Dennis Crowley and Naveen Selvadurai who are the co-founders of Foursquare worked in a technology field. Crowley worked in developing Areacode and Dodgeball apps before.

These two projects were later shut down due to the emergence of the new others that were competitive (Piskorski et al., 2013). Similarly, Selvadurai worked with Sun Microsystems and RunTunes before they declined.
Also, Foursquare conforms to the seven rules business identifying opportunities. According to Schumpeter, these five roots of business opportunities are the problem, changes, inventions, competitive advantages and technological advances (Kingston, 2014). All opportunities in business must originate from these five elements. It is logical to conclude that Crowley and Selvadurai opportunity for developing Foursquare originated from their innovativeness and technological advances.
Question 1-22
The seven Selvadorai’s formulas of success in business and the seven rules are similar in that both recognizes common factors such as opportunity identification, teamwork, and realistic planning. Evidently, the formula calls for making something people wants (recognizing an opportunity), keeping a good company (building a team), and building around an “atomic action” (having a realistic plan). However, the formula calls for seeking mentors early, setting up structures carelessly and carefully later (At first, a hunch; then, data), continuous recruiting, and balancing unknowns with known. These are not among the seven rules of a successful business. More importantly, the formula by Selvadurai is tailored to fulfill the Foursquare as a business while the seven rules are general to any business.
Question 1-23
According to Porters, a business can use four strategies to gain a competitive advantage over others in the industry. These strategies are cost leadership, differentiation, price focus and differentiation focus. Based on the features such as check-in, marketing and socializing, it is logical to say Foursquare uses product differentiation. Reason being that there are many other firms including Google and Facebook that offers advertising and check-in services. In differentiation, a firm chooses one or more attributes of a product that is important to many users.
Question 1-24
Based on the case study, it is logical to say that the previous employment of both Selvadurai and Crowley in technology firms such as Jupiter communications and Google respectively prepared them for Foursquare (Piskorski et al., 2013). Also, their majors in academics rhyme well with Foursquare meaning their knowledge and skills were helpful in its development. Finally, their projects significantly exposed them to the field and industry that Foursquare operates.
Question 1-25.
The gap between Founder’s team and resources was due to lack of finances. Therefore, the two founders developed strategies to obtain funds from external sources for their business. They offered investment opportunities to firms like Union Square Ventures and Andreessen Horowitz. The also took loans from Silver Lake and Union Square. All the funds collected in five years amounted to $112.3Million (Piskorski et al., 2013). Other sources they acquired were workspace, assets, and a team to enable proper running of the company.
Question 1-26
The application Foursquare had numerous benefits to its users. It helped them check in in hotels, restaurants, parks and entertainment places. Also, businesses advertise through the app. Perhaps the most exciting use was in connecting to other users through reviews and recommendations. Finally, users who checked in to specific places such as hotels receive a fair discount f even more than 10 percent.
Question 1-27
Unfortunately, Foursquare is not only the app of its kind. Both Google and Facebook have their apps that provide the same services. In fact, Facebook’s apps have popular and powerful local search and commerce tool than Foursquare. This means that Foursquare’s market is threatened.
Question 1-28
Based on the case study, the future of Foursquare is dull. The reason for this is that new applications have emerged with check-in and marketing capabilities. These reduce Foursquare competitive advantage significantly. Another threat is technological trends, and these make a once golden innovation useless. For example, many mobile applications such as Snapchat, Instagram and Google check in have more users than a web application. Therefore, Foursquare may eventually become replaced by new inventions.
In brief, the Foursquare application is an innovation that has grown tremendously currently having. More than 30 million users. It was developed from a technology that died out with time. Although popular, Foursquare’s future is threatened since many application offering same services and some with superior features has been developed.
References
Kingston, W. (2014). Schumpeter and the end of Western Capitalism. Journal of Evolutionary Economics, 24(3), 449-477. Do1: 10.1007/s00191-013-0312-x
Piskorski, Mikolaj Jan, Thomas R. Eisenmann, Jeffrey J. Bussgang, and David C. (2013). “Foursquare.” Harvard Business School Case 711-418, January 2010. (Revised March 2013.)