When we first wrote about Foursquare back in March it had just hit the web scene at SXSW and was taking the social media community by storm. We instantly saw the potential of a location-based service based on your Twitter network with an added layer of social gameplay.

Now we're starting to see the app get adopted by more and more of our friends, finding traction in San Francisco, New York, Los Angeles, Atlanta, Chicago, San Diego, and several other hyperlocal metro hubs. These breeding grounds of Foursquare activity are creating quite a frenzy, and we thought it appropriate to take a step back and survey the surrounding location-based social networking space as it applies to mobile apps, look forward to the future, and break down the beauty of Foursquare.

While no service is likely to achieve the same scale as Twitter in the coming months, Foursquare has all the right ingredients to be one of this year's big hits.

The Long and Short of LBS

Foursquare is by no means the first location-based social network to help you connect with friends using GPS via your mobile device. In fact, Brightkite was one of the first companies to really make a splash, combining location sharing, friend connections, and Twitter-like streams to create a photo and status update feed for your check-in history, and placestreams for each location. If only we really wanted all that.

If time has proven anything, it's that Brightkite is in danger of turning into something like FriendFeed. Great in every way, shape, and form but somehow just missing the mark. In fact, it may have taught us all one big bright lesson — that even though the technology and the idea are fantastic, we don't really want to know where other people are in the world unless they're our friends, or we're at an event. Strangers meeting up with strangers is just strange.

Google Latitude falls in the same boat. Google's approach to location-based social networking lacks innovation and foresight. In fact, they basically copied the idea from Brightkite, skimped on feature set, and created a service knowing it would gain traction because of their name. But, it's just not good enough, especially since their iPhone app is really just a Safari view of a mobile web page.

Of course, let's not forget about Loopt, the location-based iPhone app and social network that saw immediate uptake as one of the first of its kind to land on the iPhone; very useful at times, but still without the real secret sauce.

Before them all, however, was a small company called Dodgeball, which just so happens to be the roots of Foursquare. It was a location-based app before its time; Google snatched them up and essentially killed them off. Thankfully Dennis Crowley and Naveen Selvadurai, the guys behind Foursquare, had the wherewithal to keep thinking about location, making Foursquare a realized continuation of their initial vision.

Despite all the competition and growth in the space, there's still room for a game changer here, and we believe it could be Foursquare. Let's take a look at why.

Foursquare is Like Twitter Before it Was Twitter

Remember the early days when everyone mocked Twitter. Actually go back even further to March of 2007, when Twitter made its first big hit at SXSW. The initial kool-aide drinkers really got Twitter, tweeted their enthusiasm, took to their blogs to spread the Twitter love, and started to break down why it would be a game changer. The rest of us just laughed. "Ha" we said, "why would I want to share or read mundane information about myself on the web. What pointless, mundane, drivel."

And then an intangible and metaphorical wave happened, where one by one more and more people started to tweet, started to figure out for themselves why it was important, and then repeat the same cycle as the early adopters before them. Then along came the media. They were quick to judge, full of fantastic puns, and naysayers, until they started to use it and figure it out too. Long story short, Twitter, as simple as it is, was (and to some extent still is) misunderstood.

Foursquare's very much in the same boat as Twitter was two years ago. The early adopters have started to drink the kool-aide, myself included, but for the most part it remains a service completely misunderstood, and even mocked from time to time. But here's the thing, it is starting to catch on and people are starting to sit up take notice, and actually use it. Foursquare is one of the more practical location-based social networking applications, and it's value can only truly be gleaned by actually using it.

Foursquare: What's Different and What's Next

I recently chatted with Dennis Crowley about the app, its current status, and where it's headed. We also talked about the space in general, and what really struck me was that Crowley has obviously discovered what most of us are still trying to figure out. Plain and simple, other apps in the space are all about location and saying okay I'm here. As Crowley put it, "the point of the service isn't I'm here, but I'm here, so now what?"

It's the now what? part that really hits home too. With Foursquare, your check-ins and activity actually mean something. Here's why:

The Game: To those of you not playing, it may sound like a joke, but don't knock it till you try it. You earn points for every check-in — unless of course you check-in at the same locale all the time. You're rewarded with more points for being adventuresome (exploring different parts of the city), for hitting up multiple spots in one night, and eventually for the tips other people try and the to-dos you complete.

Mayorship is key. Should you check-in at the same location a few times, you'll become the mayor of that spot, and though it sounds silly in theory, in practice it's incredibly sticky. Being mayor is pretty nifty, and you might find yourself trying to actively maintain your power, which is good for your game stats, good for the business, and great for creating competition amongst friends.

The stats themselves are also quite interesting. On one level you're competing against just your immediate circle of Foursquare friends, on another you're competing against everyone in your city on a weekly basis. The stats reset to zero on Sunday night so everyone, even the noobs, has a fair playing ground come Monday morning.

Tips and To-Dos: Another differentiating factor about Foursquare are tips and to-dos. As a user, you can add tips to locales to tell your friends and the general public about the key things they need to know about a venue. Say for example the local pizza place has a discount every Tuesday night, you'd add that info into Foursquare, and then anyone nearby can see the tip and save it as a to-do to their personal check list.

Once your city sees an uptake in Foursquare users, you'll find that the GPS-aware tips offer an incredibly useful way to find out about drink specials, dinner discounts, delectable desserts and the like. Also, eventually you'll be rewarded for points if others complete your tips as to-dos, and vice versa.

Twitter Tie-Ins: Yes, almost every social savvy app and startup now how has some type of Twitter integration, but Foursquare has done it better. You'll have to figure out what works best for you, but you can optionally tweet out every check-in (it's not automatic, which you'll find to be a great way to stay under the radar), you can optionally DM your Foursquare friends when you do check-in somewhere, and of course you can find your Twitter friends that are using Foursquare.

Here's a sample real-life example of why this is a fantastic integration that really works to the advantage of the user. Foursquare user Matt has a small circle of Foursquare friends, a pretty extensive Twitter network, and a propensity for sharing his location only when he wants to be found. He uses his iPhone to check-in at the coffee shop down the street and he doesn't want to be bothered, but he stills wants the points and potential mayorship. He check-ins, decides to only share with his Foursquare friends, and remains solo. Later in the week he's attending a conference out of town and is interested in connecting with like-minded people. This time when he checks-in, he's already configured his settings to DM his Foursquare friends, and he decides to publicly update Twitter with the check-in as well. He's made himself available with little to no effort, and really has the opportunity to tap into and connect with his Twitter network.

Coming Soon: In my candid chat with Dennis, he mentioned that 80% of users are using the iPhone app, which is probably because they haven't developed any other apps, other than the mobile-friendly site, at this point. That's going to change. The next stop on their immediate road map is a BlackBerry app.

As already alluded to above, you can expect the intricate gameplay to be complicated and improved by more rules and ways to earn points. This means you'll be rewarded conditionally based on different types of activities, and loyalty/engagement with the app. Foursquare is also working on adding an events layer to the places and venues schema they have now. This means that you can associate yourself with a book signing, concert, conference, or what have you, instead of just a place or venue.

They've also got businesses on the brain, and they'll be building in more features to make it possible for venues to get value out of the application. Keep reading for more details on that below.

Foursquare for Vendors: Where Status Meets Opportunity

Foursquare is in a position to be a boon for businesses. In the same way that savvy business owners can tap into the Yelp community to promote and encourage reviews, they can tap into Foursquare check-ins to get people talking about their establishment and rewarding them for their patronage.

As is, businesses in thriving Foursquare hubs like New York, San Francisco, and Los Angeles are already tapping into the potential that the location-based social game offers. Take The Marsh cafe in San Francisco — now this is genius — they've put up signs indicating that the Foursquare Mayor drinks for free. Think about it. The competition elements of the game mean that they've just manufactured a social contest like no other. They'll get intense mayoral battles, which means more frequent check-ins, and a grip of free online exposure.

Since this side economy has already developed on its own, Foursquare is working on tools to allow venues to more easily offer special deals to those that check-in, including location mayors. They want to be able to support the local business economy with tools and tracking, and in turn find a formidable business model that they can take to the bank themselves.

Marsh Cafe image from Amit Gupta on Flickr