Two years later, what seemed like unformed potential has blossomed into truly impressive execution: Foursquare is the one startup that’s doing the most remarkable job of any company out there in product strategy and product creation. Though they’ve obviously gotten a lot of attention for their success, I think some of the nuances of what they’re pulling off have remained non-obvious, and wanted to document what’s interesting far beyond the amount of dollars of venture capital funding they’ve amassed.

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Of note: I don’t have any stake in Foursquare except in some broad sense that I want NYC startups to succeed, I like that the company is independent of big companies like Facebook, and I’m friends with a number of folks at the company (including the founders) and would be pleased to see them do well. Also, I’m going to describe some of the things that they’re doing from my perspective as an educated outsider to the company — I haven’t talked to anyone at Foursquare about this post, so it may not reflect every detail of what they’ve pulled off, but hopefully the spirit is correct and Foursquare folks can respond in the comments or on their blogs to correct any inaccuracies.

What’s the big deal?

—Core platform: The first, and perhaps most fundamental, brilliance in Foursquare’s product execution is the recognition of the ubiquity of geolocation features in mobile platforms and the identification of declarations of place as a form of establishing identity online. While much has been made about the gamification aspect of Foursquare’s design, I actually don’t think that’s the biggest innovation responsible for the platform’s success; Identifying when small incremental improvements to hardware have enabled a profound and fundamental improvement to software capabilities is the sort of thing that’s usually the exclusive province of companies like Apple (NSDQ: AAPL) and Microsoft (NSDQ: MSFT), and yet Foursquare’s pulled that off out of the gate.

Reliable Iteration: Foursquare’s removed features from the core app a few times, constantly changes the design of its flagship iOS application, and in general asserts its authority over the experience that users have within the Foursquare application. Yet, unlike every single other major social application, they don’t inspire mass user revolts or negative press every time they iterate. Some of this is that they practice WWIC 101, vetting ideas with actual users as they begin to test them, including the very key fact that the company’s founders are very public, visible, and enthusiastic users of the service itself, ensuring not just an attention to detail but a deep fluency in the application’s limits and shortcomings as well. But part of this is the small, well-paced timing of iteration on the application where there are always small things changing in ways that aren’t wildly disruptive, but do enough to set a tone that users know to expect the furniture might get rearranged once in a while. This type of iteration is extremely difficult to balance well, and it underpins the other successes outlined here.

—Technical competence: Foursquare’s slow sometimes, and I never know if failures in the app are due to something on Foursquare’s part or due to the vagaries of an AT&T connection in Manhattan. This is a great thing. Pushing areas of uncertainty to known points of failure where users already expect some frustration takes away a lot of the antagonism that people would otherwise feel towards Foursquare if its technical errors were clearly just Foursquare’s fault. Just as importantly, new features are introduced across all platforms simultaneously, and they consistently work at scale even as Foursquare’s user base rapidly increases in number. These kinds of successes are extremely difficult to pull off at scale, and are usually only visible when they fail. In this category, no news is good news, and unlike Twitter or Flickr or Tumblr or other services which preceded Foursquare as the “hot” social startup of the moment, Foursquare doesn’t even have a signature “failure” message like the Fail Whale or “Is Having A Massage”.

—Design innovation: Mari Sheibley’s signature design style has defined Foursquare’s public face since its earliest days, and the entire design team at Foursquare has maintained a design aesthetic that’s distinctive and playful without being cloying, in support of an interaction model that’s surprisingly clear given the depth of features that the platform supports. For example, I don’t really pay any attention to the points-and-leaderboard part of the service, and despite the richness of functionality available around those features, I never have to see them since they’re tucked away under one tab in the iOS app. Similarly, while Lists invite an interesting form of discovery, I’m only gradually engaging with the feature, and the architecture of the app supports dipping into this area without resorting to the “here’s a blinking light you need to dismiss” prompts of analogous features like the “Discover” tab in the new Twitter client for iOS. More fundamentally, an incredibly rich information model is represented consistently and elegantly across the app on all its platforms, even though displaying just a simple list of what my friends are up to incorporates elements including avatars, nicknames, mayoralty indicators, place names, location data, time/date information, live maps, comment boxes, and icons indicating venue types. Keeping information this dense while also having it be comprehensible and flexible enough to accommodate constant feature iteration is a formidable challenge, made all the more impressive by having a design language that’s consistent across different resolutions and platforms, and still distinct enough to be recognizable when it’s applied more broadly. Put another way: Foursquare’s design is fun enough that I’d fully expect to see hipsters wearing Foursquare-themed ironic tees by springtime, and very few brands that are only two years old have enough visual identity to be worth parodying that quickly.

—Thoughtful business model: The single biggest prompt for me to write this post was the sheer jaw-dropping impressiveness of the Small Business Saturday promotion that Foursquare pulled off in conjunction with American Express on the Saturday after Thanksgiving. While it’s obvious that any company that you voluntarily give information about your location and shopping habits to should be able to build a meaningful business out of that data, there are still a million ways that incorporating those business opportunities into an app could be screwed up in a way that’d be permanently off-putting to users. But Foursquare didn’t just avoid those traps—this very young company delivered a unique new ecommerce integration built into their platform that 1. Shipped on time for the Thanksgiving holiday weekend 2. Functioned properly across all platforms for millions of users 3. Didn’t wildly disrupt the existing uses of the app 4. Provided meaningful financial incentives (a $10 credit) to actually use the new features 5. Provided a meaningful social justification for the new features by encouraging support for local businesses 6. Was easy enough to use that signing up basically involved quick one-time entry of a credit card number and 7. Seamlessly interacted with a partner’s complex financial systems (who knows what kind of APIs American Express provides to partners?) in a way that was so seamless as to be invisible. While a few users tweeted about liking the promo, from the standpoint of a startup executing on an ambitious product vision, this was an absolute tour de force, and one of the most impressive product launches I’ve ever seen a small company pull off.