UPDATE: We have learned that Gowalla is funded by the highly-regarded Founders Fund and Alsop Louie, making them a.) no slouch for funds and connections, and b.) FF’s first Texas investment, an exciting move. Given how much Texas companies gripe about Valley VC’s not taking them seriously because of location, we’ll pursue a follow-up post on this topic.
UPDATE #2: Here is the SEC filing for the $2 million round.
The location-based social networking space continues to heat up, and two horses lately seem to be separating from the pack — Foursquare and Austin-based Gowalla (both launched at this year’s SXSW in March).
What’s proving to be the difference-maker for these two is the addictive, social gaming feature-set that each incorporates — including but not limited to checking in at various establishments or “Spots”, victorious “mayorships” that signify a high frequency of patronage (and often trigger special deals and coupons), breadcrumb-ish tips and trips that guide the uninitiated through new neighborhoods and foreign lands.
Foursquare undeniably has the early lead, mostly because of the credibility its founders and investors have brought to the table. But until a few weeks ago, Foursquare only supported select cities, which allowed Gowalla to secure a growing user base, especially outside of the US.
Foursquare is taking a mostly top-down approach to their expansion. Although users are highly incentivized to add new locations and associated information, the service is manually preloading local business information, with a bias towards accuracy and completeness.
Gowalla, in contrast, is taking a much more bottom-up approach — venue listings are largely crowdsourced. This strategy of course requires a critical mass of motivated users in order to succeed at scale, but it comes with the advantage of location-agnosticism, allowing the service colonize new markets more quickly. Users are also much more invested in a service they have helped build from the ground up.
In the last 6 months, Gowalla has fared particularly well abroad, where Foursquare had no foothold…as yet. Rapid expansion and very healthy growth by both parties promise to level the playing field considerably. Foursquare’s recent addition of 15 Eurpopean cities shows that they’ve been paying attention to their Lone Star competitor’s traction. Gowalla likewise has been adding new features like integrated Twitter functionality for both Passports and Spots, in an attempt to replicate and extend Foursquare’s word-of-mouth spread, particularly at the local level.
Gowalla just added support the Android platform via the browser (instead of a native app). This is a scrappy move — functionality and location access are seamlessly ported over, with little UX degradation. A native app is in the works, but with Foursquare already on Android and about to add Blackberry support, time is of the essence. The smaller and mysteriously-funded (angel? VC? self-funded?) Gowalla (a product of Alamofire, the incubator-ish design studio that also makes Packrat) will be hard-pressed to keep the pace — clever technical placeholders, grassroots community support, and user-contributed content are their best bets. We hope to follow-up on the company’s funding status and funding ambitions soon.
In the meantime, Gowalla has certainly turned the head of many a jaded Austinite, in no small part because the company’s approach is in many ways a manifestation of the city it which it is itself located — a design-centric, obsessively agile, particularly scrappy gang of misfits with community love and enough gumption to bet against industry uber-seeers Tim O’Reilly and Fred Wilson.
Gowalla is also perhaps the most accurate measuring stick we have right now as to how well Texas companies can compete with their well-funded breatheren on either coast.