Gowalla

What did it do?

Gowalla was a location-based social network where users checked in at the places they visited, shared this with friends and kept a record of where they had been. The Austin-based app was also integrated with Facebook Places, Twitter and Tumblr.

Why did it shut down?

In the heyday of location-based apps, Gowalla was chasing exactly the same users as Foursquare. In December 2009 it raised USD 8.4 million in a round led by Greylock Partners, bringing its total funding to around USD 10 million; by November 2010 it had around 600,000 users. Facebook bought the company for an undisclosed sum on 2 December 2011; the deal did not include user data, and the team moved to Facebook in January 2012. The service closed in March 2012, and the site went offline before users could be offered the data download they had been promised.

The story

Gowalla was a start-up launched in Austin by Josh Williams and Scott Raymond, and the app went live in 2009. Users checked in at the places they visited, shared this with friends and kept a record of where they had been. The app also linked up with Facebook Places, Twitter and Tumblr. In the location-based app race of the day, Gowalla's rival was Foursquare, and the two companies were fighting for the same early-adopter audience.

In December 2009 a USD 8.4 million round closed, led by Greylock Partners and joined by angel investors such as Chris Sacca, Kevin Rose and Jason Calacanis. The capital raised from investors, Founders Fund among them, reached around USD 10 million. By November 2010 the app had around 600,000 users.

On 2 December 2011 Facebook announced it had bought Gowalla for an undisclosed sum. The deal did not include user data. In January 2012 Williams, Raymond and the team moved to Facebook's headquarters in Palo Alto and started working on Timeline. Gowalla closed in March 2012. Users had been told they would be able to download their check-in history, photos and lists, but the site went offline before this was offered. One investor told The Next Web that he had received his small investment back as Facebook shares of lower value.

In October 2020 Williams announced he would revive the brand, and the new Gowalla was released for iPhone in March 2023. But the comeback was short-lived; in April of the same year it was reported that active development had stopped. Gowalla's original story is a reminder that a product left in the shadow of a strong rival is often sold together with its team and then shut down.

Lessons for founders

• When you compete with a bigger rival in the same category, doing similar features more elegantly is not enough; give users a reason to come back that they cannot find with the rival.
• If you promise users they can export their data, have the tool ready before you close; the site shut down before Gowalla users could download their check-in history.
• Team-focused sales paid in shares may not meet early investors' expectations; talk to investors early about the terms of a sale and the product's fate.

Sources

1. Gowalla (Wikipedia)
2. Well that's that. Gowalla shuts down. (The Next Web, 2012-03-11)
3. Gowalla returns to see if location-based networking is ready for its mainstream moment (TechCrunch, 2023-03-10)

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