"Square Square Square Square".......

Last weekend I was in Paris for the MBA Olympics and I have a few fantastic stories from that weekend that I would really like to blog about but before that I have a compelling urge to create a blog about four square and it's business model. (Ok - I admit, I need to write this blog as part of my Information Systems class).

For those that are not quite at the forefront of technological trends, four square is a new start-up technology company that enables users to "check-in" to locations and write reviews about locations. The locations can be restaurants, shops, bars, clubs or just general places of interest. The idea is that once a place has been checked-in and reviewed, people interested in viewing a review of a place can use four square to do so. People can use the application on mobile devices, hence people are able to view reviews for locations that are close to their current positions.

Four Square is typically a mobile application used on devices such as iPhones, Blackberrys, etc. However, the reviews generated from Check-Ins can be view online through the four square website. There are trends emerging that compensate frequent users with discounts in stores, bars and restaurants.

Basically, the major stakeholders involved in the four square's business sphere are:

1. End Users: This refers to the consumers that use the mobile four square application on their portable devices.
2. Customers: This will be the segment of the market that compensates four square for the services they provide. This is unlikely to be the end users. Once users are required to pay four square for using their services, the number of four square users is likely to decline.

At the moment, the value proposition provided to each of these groups is as follows:

Value for end users:

• End users are able to access customized information about places of interest close to their current location. If an end user wants to view the reviews of restaurants around a certain area, the user is able to do so while being on the move.
• Through the points structure currently setup on Four Square, users that gain a lot of points are awarded titles that implicitly give them bragging rights over their friends and peers. This is an incentive for users to continue using the application and "Checking In" at every possibility.
• A new trend has emerged where retailers, bar owners and restaurant owners are giving end users a direct financial benefit for their presence on four square. That is, a consumer with a four square title of "Mayor" is able to walk into a number of bars and is able to receive a first drink free, or a discount of some other kind.

Value for businesses:

• Business that provide goods and services to the end users of four square are able to benefit from the application by being able to gain data on their own customers. This data can be valuable for Goods and Services providers in making critical strategic decisions.
• Although not currently available, it is expected that four square will enable businesses to post customized advertisements on the mobile application. This will enable businesses to post specific advertisements to consumers through four square depending on the current location of the consumer.

Thus, it can be seen that four square can add value to two separate groups. However, the value that the application provides to end users does not seem to be compelling enough to justify a charge for using the application. If end users are forced to pay for using the application it is quite likely that they will seek to avoid using the application. However, since four square could help businesses increase their own revenue, it seems reasonable to charge the businesses.

At the moment, four square is still running on it's start up money, there are no major sources of revenue. However, four square might eventually be able to generate revenue from some of the following methods:

1. Four Square could charge businesses for placing advertisements on it's application. This is the most obvious method of generating revenue and this method is currently utilized by several applications designed for the iPhone.
2. Four Square could also charge businesses on a cost-per-checkin basis. This would be quite a unique charging model. In this model, an increase in the number of check-ins will increase the online visibility of the businesses. An increase in the online visibility of a business is likely to bring in a greater number of customers and this will also compensate four square accordingly.

Now, is four square the new golden child of the internet ? Well, that is a multi-million dollar question now, isn't it ? Personally I believe that four square needs to re-position it's offering in such a way that value delivered to end users is more compelling. At the moment, the odd free beer and some bragging rights do not seem enough of an incentive for the vast majority of people. While I feel that the localized search on places of interest is useful, four square is hardly the first application that tries to do this.

On the other hand, customized data on consumers is something that businesses in general would love to attain. In fact, I think they would be willing to pay good money to attain this data.

In conclusion, I feel that if four square is able to overcome some of it's early teething problems, it could very well be an extremely successful online business.