Naveen Selvadurai, Co-Founder of Foursquare

What will the New York City-based geolocation start-up do with the $20 million in venture capital it raised recently?

It's been a busy month for Naveen Selvadurai. Foursquare, the location-aware social networking app that Selvaduri co-founded in 2009, picked up $20 million in a Series B round led by Netscape founder Marc Andreessen's venture capital firm, Andreessen Horowitz. Less than two weeks later Foursquare hit 2 million users, doubling the audience it had in April. The start-up is still growing steadily by 100,000 new members a week, with plans for a big redesign at the end of the summer.

By now Foursquare's rise to fame is a familiar story: Selvadurai, a former software architect at Sony Music, found himself working nearby and getting to know Dennis Crowley, co-founder of the location-aware text-messaging service Dodgeball, which, in 2005, had been bought – and neglected – by Google. 'We were just itching to start something on our own,' says Selvadurai. It turned out that they each had been toying with the idea of a 'Delicious for places' that could let users digitally bookmark and physically discover places around the city. Apple had just released the first iPhone, and with Selvadurai's background in mobile development, the two went to work on an app.

In January 2009, three months before South by Southwest, Selvadurai and Crowley ramped up production, tapping 100 friends to find bugs and weigh in on functionality. 'We literally stayed up for two weeks straight coding,' says Selvadurai, 'Our friends were into it, but we weren't really sure.'

It was a hit. A big hit. Early adopters dubbed Foursquare that year's Twitter. Mainstream users soon concurred. For Selvadurai, whose focus is developing the technology behind the app, the trajectory didn't look quite as simple. 'We had a couple different inflection points,' says Selvadurai. One came last September after Foursquare got Series A funding from Union Square Ventures' Fred Wilson and Twitter's Jack Dorsey. The next came in December and January after it launched internationally on all smartphone devices. 'We both feel like nothing's every been at this level,' says Selvadurai, 'There's a lot of pressure, a lot more moving parts. Everything you do is immediately read by a bigger audience.'

Along with the enviable growth came serious struggles in scaling up. 'I have sleepless nights all the time,' says Selvadurai. 'We're all obsessed with what we want to build and think about it all day long. If you're really excited about a redesign and only half way there, you go to sleep and dream about the rest of it.'

The company has already found two primary revenue streams: big brands such as Starbucks and The New York Times sponsor content, while local businesses use the app to offer deals to lure in nearby users. Selvadurai's attention now is on the game's evolving mechanics, and how the company can to continue to improve on his initial goal—namely, answering the question, 'How do we get better at living in our cities?'

Foursquare's redesign won't be out until around August and Selvadurai won't comment much except to say that the choose-your-own adventure approach bloggers have speculated about is a little off-target. 'The gaming concepts we came up with are more than a year old now. Games have to evolve. It accounts for the drawbacks [Foursquare] has – and that our users know it has – and improved on it.'

Reporter Nitasha Tiku covers technology, finance, green business, and social entrepreneurship for Inc. magazine and contributes to the staff’s daily links blog. Her work has appeared in New York magazine, The Villager, Chelsea Now, and on nymag.com. She lives in Brooklyn, New York. @nitashatiku