Oct 12, 2012 · 2 minutes

Dennis Crowley, the founder of Foursquare, says he ultimately considers the sale of his first company to Google as a failure.

Crowley's Dodgeball, a location-based social network that was a precursor to Foursquare, was acquired by Google in 2005, five years after its inception. The service was a famous example of Google neglecting one of its promising acquisitions, to the point where in 2009 the search giant just shut it down.

Reflecting on the experience at PandoMonthly in New York tonight, Crowley told Sarah Lacy that the Google experience was a disappointment. "I chalked Dodgeball up as a failure," he said. “I was like, ‘That’s our chance.’ I had a startup that sold to Google, which is a success, but it was a failure."

In retrospect, Crowley can articulate very well what the problem was. "We thought it was a product acquisition, and they knew it was an 'acqui-hire,'" said Crowley. "Those two things were out of sync.”

Crowley was candid about how naive he and his co-founder, Alex Rainert, were about the acquisition at the time. “We came out of grad school, we were saving pennies to buy $2 pizzas at NYU, and suddenly you had everything you could eat, everything you could drink... It took us a little while to get up to speed there.”

At NYU, he and Rainert had been working 15 hours a day at weird hours. When they got to Google, things changed. "Then there’s a lot of structure and people that you report into, and you don’t know how often to go to San Francisco, and then you don’t know who to meet with when you’re out there." Somehow, Crowley said, he and Rainert were the guys who slipped through the cracks at Google. “When we were there, we were just mad because we didn’t know what to do.” Google would ultimately starve Dodgeball of resources.

Crowley said he learned from the experience, and it has helped Foursquare enter negotiations with startups. "It’s cool to be on the other side of it, and to have those conversations with folks.” The problem for him and Rainert at the time of the Google acquisition was that they just didn't know how to play the system, he said.

In hindsight, he understands what happened. Now that Foursquare has two offices and 150 people -- which is still nothing compared to Google's 10,000 employees at the time of the Dodgeball acquisition -- he can see where the problems happened. "It’s hard to do," he said, "and if it’s hard to do at our size, it’s definitely hard to do at their size.”

Eventually, he and Google CEO Larry Page managed to put the issue to rest. “As soon as Foursquare started taking off, I went to the Google Zeitgeist conference and I sat down with Larry, and he asked me: ‘What happened to Dodgeball?’” The two ended up soothing the wounds. "Without hugging," said Crowley, "we kinda hugged it out."