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Next year's Twitter? It's Foursquare

Next year's Twitter? It's Foursquare

London, England (CNN) — As 2009 draws to a close, with Twitter undoubtedly this year’s media darling and Facebook continuing on its path to global domination, you may wonder which social-media service will become tech’s poster boy in 2010.

Among the Web’s early adopter set, the answer is nearly unanimous: Foursquare.

While the technology landscape is ever-changing, I’d argue that Foursquare already has aligned itself to become next year’s mainstream hit.

The Twitter connection

Birthed by the team that brought us the mobile social network Dodgeball (acquired by Google in 2005 and later shuttered), the location-based mobile startup serves a simple purpose: It lets an individual share his or her location with a group of friends.

Foursquare ventures beyond utility, however: It’s a virtual game in which participants earn badges for checking in at various locations; those that check in most become a venue’s “mayor.” By all accounts, this mechanism is as addictive as Twitter, Facebook or checking your e-mail on a BlackBerry.

Originally launched as an iPhone application and seeded by the young early-adopter set in cities such as New York and San Francisco, the site’s founders were able to leap from a ready-made springboard: Twitter.

With users’ “check-ins” being posted to the messaging service, Foursquare was able to gain a foothold in much the same way YouTube built its lead from videos embedded in MySpace pages.

The parallels with Twitter are numerous. As technology early adopter and popular blogger Robert Scoble wrote in September: “Go back three years ago. Twitter was being used by the same crowd that is playing with Foursquare today.”

The similarities don’t stop there: Twitter first took hold at Austin’s South By Southwest festival in 2007; Foursquare made its debut at SXSW 2009. Members of both founding teams have previously built successful social startups; both those startups were sold to Google.

The two companies share investors, too: Union Square Ventures is a backer, while Twitter inventor Jack Dorsey made an angel investment in Foursquare. Other notable investors include the founders of Digg and Delicious, and famed angel investor Ron Conway. Union Square Ventures’ Fred Wilson observed that Foursquare’s first round financing was “among the most competitive early round financings I’ve seen in a long time.”

Foursquare’s power play: Platform for developers, retailers

This week Foursquare debuted the singular piece that launched Twitter into the stratosphere: an API. This application programming interface allows third-party developers to build anything they desire on top of Foursquare’s location-based social network.

It’s been shown time and again that once these ecosystems gain momentum, potential competitors face an arduous task. From Flickr to Google Maps to Twitter and beyond, it’s clear that early critical mass — having enough users and applications to make a service invaluable — sets the stage for a landslide victory.

Google’s Android, entering the mobile platform wars long after the iPhone App Store had served up a veritable smorgasbord of apps to its army of users, is evidence of the chicken-and-egg problem that arises for new competitors: What’s the incentive for users and developers to switch to a smaller, less visible platform once a leader has emerged?

With the launch of its API, Foursquare looks set to capitalize on this “rich get richer” phenomenon before others can make a play. Foursquare is doing more than wooing users and developers, however: It’s also courting local bars and restaurants.

“Foursquare for Businesses” is a platform for retailers wishing to offer special deals to Foursquare users: Check in to frozen desert maker Tasti D-Lite at two venues in New York, for instance, and you’re eligible for a discount.

Competitors abound

Nonetheless, multiple players are vying for victory in the location-based services market. Between Gowalla, Loopt, Brightkite and Google’s Latitude, Foursquare will by no means have an easy ride. While Gowalla debuted an early version at SXSW 2009 alongside Foursquare, both Loopt and Brightkite have a head start.

All of these services, I’d argue, lack the highly addictive game play that appears to have Foursquare users hooked.

Google is undoubtedly the 800-pound gorilla, but the fastidiously numbers-driven search engine has proven time and again that it cannot grasp social-networking dynamics — from Orkut to Friend Connect (its Facebook Connect competitor) to its failure to turn Google Video into a YouTube competitor.

One company may unwittingly squash Foursquare in its infancy: Twitter itself. The very service that propelled Foursquare to prominence is rapidly building out its location-based features, with a location API that directly challenges Foursquare. Twitter already has the critical mass of users and ecosystem of eager developers. If it executes correctly, the service could leave Foursquare in the dust.

In Foursquare’s favor: Young, fast-growing startups such as Twitter often find their engineering teams overstretched simply trying to achieve scale. Twitter has added less than a dozen new features since launch as preventing frequent downtime has become its greatest challenge.

Meanwhile, the overlap in investors means the Twitter-Foursquare relationship is unlikely to turn sour. Foursquare may network its way to the top in 2010 or find itself lost in an increasingly competitive landscape. Early adopters are betting on the former.

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