Over the past few days, I’ve been at home in Alabama, which as you may imagine, is quite different from New York City. Other than the grossly uncomfortable heat index (100+ every day) and noticeably shorter skyscrapers here, I’ve also noticed that some of the mobile tools that I used in New York are no longer particularly useful.
Take Foursquare, for example. It is useful in New York for me because there are a large number of venues that I can check into, and also because I have a large number of Foursquare friends that also live in NYC. Also, the density of Manhattan / NYC (in terms of both people and venues) further increases the usefulness of Foursquare. Why? Because there is a greater probability that when I see a pop-up notification of a Foursquare friend who is checking in, it’s actually in a close enough range that it makes sense for me to find the friend to say hi. In suburban Birmingham, where getting anywhere usually requires at least 10-15 minutes of driving at a minimum, the ability for Foursquare to help provide that same connection diminishes greatly. Plus, given the lower penetration rate of Foursquare usage down here, if I even chose to check in, I would have to add a new venue myself.
I think it’s this critical mass of New York users and New York venues, as well as the partnerships that Foursquare has made with NYC-based companies, that has greatly helped it to become the location-based application of choice compared to, say, Gowalla. Earlier this year, around the time of SXSW 2010, I was chatting with a friend from Austin Ventures about location-based services, and it seemed pretty clear that we each had our regional alliances. My friend was a backer of Austin-based Gowalla, and I was a supporter of New York-based Foursquare. This was not surprising, since you’d expect greater adoption and penetration in each startup’s founding city, leading to a critical mass of users in that location.
During SXSW 2010, it seemed as if Foursquare and Gowalla were still neck-and-neck in terms of their potential to become the dominant location-based mobile app, but if you had been a limited partner giving me money to invest, I would have put that towards Foursquare, something I mentioned to my friend. Why? Because the pure size and density of the New York user base, as well as the potential connections to media, advertising, and finance in NYC are a huge advantage in terms of customer acquisition, all other things equal. I think that that boost towards critical mass is a huge value add for many startups (though not all) and should encourage more entrepreneurs to base their companies in New York.
Agree? Disagree? Please add a comment!
P.S. Current stats (as of July): Foursquare is now over 5 times larger than Gowalla and growing 75% faster.
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In other SocentVC-related news, 40 billionaires have now pledge to give away 50%+ of their wealth as part of The Giving Pledge. The number keeps going up! Read more about The Giving Pledge here.
