Too often, startups risk getting misdirected by the media and customers to add features and functionality to a product or service that turn out to be collateral to the core business. I believe this is happening now with Gowalla and Foursquare, among others. Both services have recently become media darlings, but neither has managed to break out beyond a relatively modest group of technology enthusiasts.

Last week while at SXSW, I tested both services and believe even more strongly now than I did before SXSW that the feature creep evident in the recent releases from both companies may do more harm than good to their ability to compete with other companies focusing on local advertising (Google, Facebook, and MANY others).

By following the media’s lead (and thirst for more “cool” releases), Gowalla and Foursquare seem to be focused on features collateral to their businesses.

Are Gowalla and Foursquare squandering their opportunities and visibility? I believe they are.

Location based marketing is important, but every website and service will soon be able to execute location based marketing strategies. Importantly, location based marketing is expected to take up a 70% share of all U.S. interactive marketing spending as soon as 2014 – $4 billion in 2015 (up from $34 million in 2009). Companies that don’t focus on their core business will cede leadership and market share to those who do.

As I discuss in this video, there’s a danger when you split your focus and forget about your core business.

Do you think that the features being introduced by Gowalla and Foursquare are critical to their location based advertising models? Why?

It’s tempting for startups to count everything that can be counted. After all, prospective investors and the media are often influenced by numbers of followers, visitors, users, paying customers, etc.

But there are a number of challenges when trying to count everything. Relying too much on statistics can be very distracting and can lead to decision paralysis. Startups that become obsessed with metrics often lose their way.

Many entrepreneurs and business owners forget that not all metrics are important. Albert Einstein famously said:

Not everything that can be counted counts, and not everything that counts can be counted.

Wise words – and most startups (and small businesses) should take those words to heart.

We tend to rely very heavily on metrics (at my company, crowdSPRING) and therefore, are more likely than other companies to become distracted if we don’t smartly pick and choose the metrics that influence our decisions. Sometimes, we make the right decisions and focus on the right metrics. Other times, we make the wrong decisions and lose focus, paying attention to metrics that aren’t nearly as relevant as we mistakenly thought they would be. (Last week, I suggested four questions you should ask when making decisions based on metrics and statistics).

Given the wide availability of good software and plenty of data (from your internal and from many external sources), it’s pretty easy for startups to put together measurements on just about anything.

One of the lessons we’ve learned from our successes and failures: we are more likely to succeed when we spend a greater portion of our efforts discussing and debating what should be counted – and a smaller portion of our effort counting.

Numbers are good – but as Einstein correctly pointed out, everything does not need to be counted.

Do you agree?

image credit: cambodia4kidsorg