There’s not a lot of value in check-ins, says Foursquare co-founder Dennis Crowley. That’s why the developers, inspired by Nike Plus, added the gaming element that has made the location-based service the next big thing in soci

al networking.

Crowley explained at Wednesday’s Where 2.0 how, while jogging around Manhattan a few years back, he was inspired by a Super Mario mushroom he saw painted on the street. Why not get points by passing over it? The idea soon evolved into a game where joggers, running the same 8-mile route, got scores for jogging over Nintendo iconography.

Now, nearly a million Foursquare users later…

“We’re breaking out of the tech geek ghetto,” Crowley said.

One of Foursquare’s initial goals was to see how software could change people’s behaviors. Thus the idea of badges, which Crowley describes as “digital candy, like giving adults gold stars.”

“We want to create the same experience as playing Zelda for six hours,” Crowley said.

What Foursquare discovered is that the gaming element really could change people’s behaviors. Foursquare released a Gym Rat badge, which drove people to local gyms, and a badge that rewarded users for visiting 30 pizza places, which in turn raised pizza sales.

“Creating badges makes people go there,” Crowley said.

Businesses are beginning to see the value of badges. An increasing number of bars are rewarding mayors with free drinks (one place puts a giant picture of its mayor on the storefront), and establishments are offering specials to Foursquare users. Taxi stands at New York airports give free rides to their mayors, and a Miami lawyer offers free consultation to anyone who checks into 5 jails.

As an experiment, Foursquare launched the Swarm badge, which rewards flashmobs of 50 or more people. A.J. Bomber’s a restaurant in Milwaukee began organizing Swarm Parties and saw revenue on items promoted on Foursquare increase by 30 percent.

And this is only the beginning. As Crowley noted, Foursquare has grown past early adopters and has become a phenomenon.

“There’s something brewing here that’s bigger than badges,” Crowley said.

By Mark Alvarez