SXSWi: Let the geolocation games begin

The competition will be particularly fierce at the annual digital-culture bash between Foursquare and Gowalla, rival social-media services that want to own the location-based networking market.

Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
Caroline McCarthy
6 min read

"We're going to be giving away, literally, hundreds of tacos," Josh Williams, founder of mobile networking start-up Gowalla, said to CNET in an interview last week about his company's plans for the annual South by Southwest Interactive Festival (SXSWi), which runs March 12-16 in Austin, Texas.

"We're bringing, like, playground-style balls and chalk," said Dennis Crowley, the co-founder of Gowalla rival Foursquare. "You'll be able to win prizes at ad-hoc foursquare games that you see around the convention center."

Eighteen months ago, neither Gowalla nor Foursquare existed. But their similar "geolocation" mobile apps, which let users "check in" from their smartphones, share their location with their friends, and compete to earn virtual goods (in Gowalla) and "badges" (in Foursquare), are two of the hottest start-ups in the tech world. They're in aggressive competition to be SXSWi's big standout, making the digital-culture bonanza's Texas-sized showmanship even bigger than usual.

The history of technology is riddled with fierce rivalries, and while Foursquare vs. Gowalla is hardly Edison vs. Tesla, it's quite significant to those who see location awareness as the key to the next big developments in social-networking, advertising, and marketing. Plus, after SXSWi 2007, when Twitter made its explosive leap out of the gates, the tech world has turned to SXSWi as the premiere event for discovering the next big thing, a gathering of the earliest of early adopters that can serve as the ultimate Petri dish for new social-media tools.

Geolocation's perfect for it, too: The sprawling festival more or less takes over Austin's entire downtown and runs round-the-clock, with panels and meetups throughout the day and a packed schedule of parties all night. Plus, there are even more events that are secret or unplanned, so it's just about the best imaginable setting for a company that tells you when and where everything's going on.

Both Gowalla and Foursquare are throwing SXSWi parties...on the same night. Foursquare's, in partnership with Twitter client Brizzly and new-media firm Katalyst, promises tons of free T-shirts. Gowalla's is a huge "Tiki Room"-themed blowout with a performance by electronic artist Diplo, a charity initiative to benefit the Lance Armstrong-founded Livestrong Foundation, and admission only guaranteed by showing up with a digital "VIP pass" that can be obtained at random through Gowalla check-ins.

"It's going to be like a bad 1999 party," Williams joked to CNET. "Maybe we'll get some AOL CDs to throw off the balcony."

"I think the whole team's a little worn down," Crowley said during a visit to the start-up's downtown New York offices a few days before SXSWi. "We're trying to do a lot of stuff. We have the right size team to do it now." The company is doing so many SXSWi promotions, including a whopping 16 new badges, that it's created a site to detail them all.

"If you look at the competitive juices that are flowing between those companies, SXSWi will be a very interesting place to see what stunts either of them pull," observed venture capitalist Fred Wilson of Union Square Ventures, which led Foursquare's $1.35 million series A funding round last fall and which has also backed Twitter. "It's like a political race."

But more than politics, this is a sport. Like football teams plotting offensive and defensive plays, the two rivals have pinpointed one another's strengths and weaknesses, and made strategic moves in response. Gowalla, which sprang out of Alamofire, the social game design studio that created the runaway hit "PackRat" for the Facebook platform, launched with a better design and cozy relations with Facebook (many employees are avid users, Williams will be one of the speakers at Facebook's annual "Developer Garage Austin" event on Sunday, and Gowalla officially partnered with Facebook's design team on a set of "virtual coasters" redeemable for free drinks). Right before SXSWi, Foursquare countered by hiring its previously part-time designer as a full-time employee and teasing bits and pieces of a revamped design for both its mobile app and Web site.

"Gowalla came out and did some things better (than Foursquare)," Wilson said. "Their iPhone app was better. The badges were better. It was beautiful."

Gowalla, meanwhile, took note of Foursquare's adept business deals with companies as varied as restaurant reviewers, TV networks, and newspapers, and started crafting partnerships of its own with the likes of the Travel Channel and General Motors' Chevy as well as local Austin businesses for SXSWi.

And Gowalla is the home team: it's headquartered right in Austin.

Gowalla's promotion for its 'Tiki Room' party on Monday during SXSWi.

Even the two companies' rosters of big-name angel investors read like the team lineups for some bizarre Silicon Valley sports competition: Gowalla has been backed by eccentric ex-Googler Chris Sacca, wine entrepreneur turned motivational speaker Gary Vaynerchuk, and entrepreneur Jason Calacanis. Foursquare's angel investors include Delicious founder Joshua Schachter and Twitter chairman Jack Dorsey; industry poster boy Kevin Rose has invested in both start-ups.

As the hype over geolocation grew more and more fevered, additional start-ups in the space started to flood SXSWi's packed calendar with events, promotions, and gimmicks. They're showing up in jerseys and face paint, so to speak. And they're tailgating.

Sunday night will see a joint party called the "Geobash" co-hosted by geolocation software company SimpleGeo, event-focused start-up HotPotato, and mobile coupon service Yowza. Loopt, a pioneer in location-based mobile networking, is asserting its relevance by launching a revamped iPhone app with a focus on events right in time for SXSWi.

Other SXSWi debuts and promotions are coming from apps built on top of Foursquare or Gowalla: The Austin-based marketing firm Powered has built an iPhone app called "Snark It" in which snide remarks about friends' Foursquare check-ins earn "liquidity"--points toward free drinks. Another firm, Sysomos, has created a Google Maps-based aggregator of Foursquare (and eventually Gowalla) data called FourWhere and rolled it out just in time for SXSWi. An app called Foodspotting, which uses GPS to help you find the exact menu item you're looking for at any restaurant near you, has launched an Austin food guide for SXSWi and a "scavenger hunt" for festival attendees.

Does there have to be a champion in SXSWi's geolocation wars? Foodspotting co-founder Alexa Andrzejewski, who eventually wants her company to source data from all kinds of "check-in" services, likes to see a few emerging victorious. "To me, Gowalla is a game with a location component, and Foursquare is a location-based app with a game component. They start in different places," Andrzejewski said.

She's in the minority.

"I don't think it necessarily has to be a winner-take-all market, but the thing about these social networks is that they do tend to gravitate toward a winner-take-all because everyone wants to be where everyone else is," Fred Wilson said of Gowalla and Foursquare.

The question of where "everyone else" is likely won't be determined for sure, because the giddy hordes of tech early adopters who fly to Austin for SXSWi every year are hardly representative of mainstream Internet users--though they make for quite a fan base. (Take the third-party operation called "Nerd Merit Badges," which has created Girl Scout-style physical versions of Foursquare badges, and was encouraging users to buy them in time for a pre-SXSWi arrival.) Foursquare and Gowalla are, consequently, just as eager to win over the marketers for whom SXSWi has become an essential stop. Gowalla's Chevy promotion will put it front-and-center, since the automaker is one of SXSWi's biggest sponsors. Foursquare unveiled business analytics pages, as well as new badges that Dennis Crowley says show off some more advanced data-crunching capabilities than existing ones do.

"(It's) a little bit of an experiment to see how that stuff works," Crowley said. "We'll learn from it, and launch it everywhere when we get back."

At this point, there's little else that they can do to position themselves for the social-media showdown of the spring, except to show up at the Austin Convention Center with their best faces forward and their arms full of quirky company swag--and hope that wireless carriers' Austin coverage, not to mention their own servers, stay afloat under the pressure of hundreds of SXSWi attendees.

"The first step is the network staying up," Gowalla's Josh Williams said. "If that plays out as planned, that'll be the big hurdle there that we all have to get over, and once that happens I just think it's going to get really interesting."