Gowalla Versus Foursquare: Why Pretty Doesn’t Always Win

Gowalla, the geo-social app, will soon be no more. The founders will be joining Facebook and shutting down the product a couple months after trying to reposition the app as a social travel guide. It was clear long ago that its rival Foursquare won the check-in wars, passing one billion check-ins recently and more than 10 million users. But why did it turn out this way?

Both Foursquare and Gowalla launched at the 2009 SXSW conference, and many people thought Gowalla was actually better designed. At least it looked better, with more whimsical badges, for instance. But pretty doesn’t always win. “Startups and businesses are like making wine,” says Gowalla investor (and vinophile) Gary Vaynerchuk, “it is a blend. It is not about one element. Design is one element.”

Another Gowalla investor explains the difference in one word: “Austin.” Gowalla was headquartered in Austin and Foursquare is based in New York. For a mobile social app that depended on urban density to gain early critical mass, New York gave Foursquare a hometown advantage over Gowalla.

Foursquare was able to build better network effects early on, and those just kept compounding. You don’t use Foursquare because it is a pretty app. You use it because all your friends use it, and because it is the geo-location platform across many apps. It is more useful because it touches more people and more apps that people care about.

The other thing about Foursquare is that it didn’t try to overcomplicate things early on. It did one thing very well: check-ins and rewards. Over time it added local recommendations and even pushed into city guides, but it remains mostly about the check-in. That’s what keeps people coming back to the app day-in and day-out.

Foursquare also has Dennis Crowley as a founder. Crowley has been obsessed with the idea of mobile social geo-location apps for a decade (he tried this once before and failed with Dodgeball). Gowalla founder Josh Williams is also very talented. “He’s the kind of guy who I would back over and over,” says Vaynerchuk, even now. But again, that founder’s talent is just one element.

It’s not just the founder who counts. “I think Tristan is a massively underrated character in the whole story,” says Vaynerchuk, referring to Foursquare’s business development executive Tristan Walker. “His early biz dev deals gave them a lot of clout, with major brands like Starbucks lending their brand equity to Foursquare.”

Everyone has their own opinion on why Foursquare succeeded and Gowalla didn’t. I asked why on TWitter and got a ton of feedback, Here are a few of the responses below. Add your own theories in comments: