Bob Jansen
October 7, 2009 9:00
Business
Internet

Clash of the startups: Foursquare vs. Gowalla

More than a year ago Brightkite was one of the first location based networks that gained traction and had some active users. I’ve been using it myself for sometime, and liked it. But there wasn’t an incentive to keep checking everywhere. It updated my Twitter account and location, but nothing more than that. I missed the sparks to use the application on daily base. Foursquare and Gowalla might have found a solution.

Foursquare was one of the first popular networks that added a game effect to a location based service. Meaning, you could check in at locations and get a title. The person with the most check-ins on that physical location becomes mayor. Part of their business model is to give local businesses the opportunity to make offers or give free drinks for example. Unfortunately, Foursquare is only available in a limited amount of cities and heavily moderated.

Gowalla is a more low-key and user centric network. You’re able to add your own locations. And again here we find a game aspect, you can drop and pick-up items on that location. These items have a rank and a game of collecting and dropping items comes to existence. I think their first aim of making money will be in trading virtual goods or buy more items to drop on locations. Looking at the exploding trade in virtual goods online, this is not a bad idea.

At this moment it’s hard to point out a ‘winner’. Currently I think Gowalla has more potential in gaining traction on the short term. Simply because they allow users to create spots which are instantly ready for use. This way a more diverse user base evolves all over the world. Which enlarges the chances of people entering a city and already being a Gowalla user and instantly can start checking in.

Foursquare is now building an image of the location based network for the happy few. If they keep playing this exclusive card people won’t be able to connect to their friends in other cities. Resulting in exclusion of friends. If Foursquare opens allow all cities on their network, they will go head on with Gowalla. Which will be an interesting race.