Foursquare and Rival Geo-Location Games Find Lots of Love at SXSW

"Mayors" from all over the country gathered at the Club DeVille to drink cold beer and party at the first-ever "Austin Town Holler," a meet-up at South by Southwest Interactive of people who play the popular geo-location game Foursquare.

Players become mayors after "checking in" at a place multiple times using their mobile phones. Foursquare, which launched at SXSW last year, now has more than 560,000 players, says Dennis Crowley, Foursquare co-founder and CEO (pictured, in blue shirt).

Foursquare and its biggest competitor, Austin-based Gowalla, have created a phenomenon at SXSW in which everyone's toting around their smartphones to check in at hotels, bars, parties, keynote sessions and even a pile of Legos in the convention center.

"It's growing, it's growing very, very quickly,'' Crowley says of Foursquare. "We finally have the team to support a lot of what we're doing."

Not the Only Player in This Game

In the last year, Foursquare has raised $1.35 million in venture capital, hired additional employees and continues to experiment with different revenue streams from brands like Starbucks (SBUX) and local merchants, Crowley says. A representative from Wal-Mart Stores (WMT) even attended the Town Holler meet-up. "Those opportunities are already emerging, but it's not something we're racing into,'' he says.

As Foursquare expands, competition in the geo-location game market is heating up. Gowalla created a similar game that has gotten a lot of traction at SXSW. But one of Gowalla's big drawbacks is that it doesn't offer a BlackBerry application yet, says Jaime Punishill, a banking executive in New York. He has used Foursquare since last August and likes that it's available on his BlackBerry. He adds that most of his friends use Foursquare. "Gowalla doesn't have the same kind of presence in New York,'' Punishill says.

Despite that, Gowalla beat out Foursquare to receive the SXSW Web award for best site in the mobile category Sunday night at an awards ceremony at the Austin Hilton Downtown.

Other competitors are steadily emerging. Seattle-based Whrrl launched a geo-locating game that allows people to add photos to the digital record of the places they've gone. Last week, Twitter announced plans to include a geo-location feature in its micro-blogging site.

"Yeah, I mean we've been saying for a long time, we went into this knowing that check-in is going to become a commodity,'' Crowley says. "Facebook is going to offer it. Twitter's going to offer it." The company that offers the best and most compelling features will win over the users, Crowley says.

"The recent updates that Foursquare has been pushing through have been much appreciated,'' says Chris Byrd, social media member with computermaker Dell (DELL) in Austin. He's been using Foursquare at SXSW, and he says it has been performing well.

"You Have to Opt In"

The increasing popularity of geo-location applications has raised some concerns about privacy and has earned these programs the nickname "stalker apps'' because they allow people to stalk their moves. The services recommend people only add friends they know well. But when people sign up, they sometimes add everyone they follow on Twitter, even if they don't know those people. That led blogger Jason Calacanis to tweet that he had more than 1,000 friend requests pending on Foursquare.

Foursquare created privacy controls within the game for every step of the way, Crowley says. "We only know where you are when you decide to tell us where you are. You have to opt in with your location every time," he says.

Colleen Pence, president of Social Media Mentoring in San Antonio, Texas, uses Foursquare, Gowalla andWhrrl. Privacy issues don't concern her because she's careful about what kind of information she shares online. She also approves only people who are friends in real life. "A lot of it is about using common sense,'' she says.

Conrad Lisco, social/mobile strategy director of R/GA in New York, was one of the originators of the Foursquare Town Holler as a pub crawl for people playing the game. He's done two meet-ups in New York and one in San Francisco. That doesn't surprise Crowley. "Everything that we're seeing at South by Southwest this year is being driven by users,'' he says.

Learning About Yourself-- and Bad Restaurants

Foursquare didn't have a marketing plan when it came to the show this year. It brought some chalk and had thousands of users come out and draw on the sidewalk and play with the company, Crowley says. "It's kind of happening organically,'' he says. "It shows that users are really passionate about what they're doing, and they're really connecting with our vision for this."

Monte Lutz, senior vice president of Edelman in Los Angeles, signed up for Foursquare a year ago but began using it frequently six months ago. He travels a lot, and it lets him keep in touch with friends and discover new places around him.

"There are some interesting things you find out about yourself,'' he says. It shows "where you've been and patterns you've developed," Lutz explains. He also reunited with a friend he hadn't seen in 10 years because Foursquare showed she was checking into the same airport he was.

At SXSW, Foursquare provides real-time information that can help shape plans, says Frank Eliason, director of digital care for Comcast (CMCSA) in Philadelphia. His friends have alerted him to good panel discussions -- and warned him about bad restaurants.

"I use Foursquare to find out where everybody's at,'' Eliason said. "So there's a huge benefit to being able to get in contact with people that are close to you."