Foursquare (LTV, Monday, Week 7)
launching-technology-venturesyear-twoHunch-driven entrepreneurship at its finest...
Why did Foursquare succeed when Dodgeball failed?
-- Smartphones existed.
-- Social networks more mature (Facebook, Twitter) => lower CAC
-- Splashy PR launch SxSW
-- More gameification (see also, smartphones)
-- Launched in NYC => large, young, tech-savvy market; trend-setters
(Commentary: Is this really a Lean startup? Try the same idea after it failed/worked out mediocre the first time; change almost nothing conceptually and don't do much testing/metric-driven development?)
Big takeaway: context and timing make a big difference.
Does Foursquare have Product-Market Fit? (I say yes)
Pro:
Strong engagement metrics
15M users
Passionate users
Anti:
CVP is weak/fuzzy
Haven't (Can't?) monetize
Some product concerns: attrition, engagement, etc.
Hold off on monetization if:
Your product has strong network effects => focus on getting a zillion users
AND
You can raise cheap capital
Monetization with advertising is very difficult. You need massive scale to matter to advertisers and merchants.
Beware big-company biz dev deals. Big brands think of your startup as a toy: they will drop you in a heartbeat, often with dramatic consequences for the financial and emotional health of your startup...
Jeff Bussgang's Parting Thoughts
(1) Entrepreneurship is about passion.
(2) Failure and humility: part of life.
"Happiness isn't a goal, it's a byproduct." -- Eleanor Roosevelt
(3) Balance and perspective: hard to maintain, pretty important.