CitySourced is a remarkable startup story.

The company and its product began as an iPhone app to crowdsource routine city problems. Just a few weeks later, CitySourced nearly won the TechCrunch50 2009 technology competition.

CitySourced developers almost didn’t make it on stage at the technology competition in San Francisco. Only a last-minute acceptance as an alternate startup (another company dropped out of the competition) put them in the running in the business applications category.

The CitySourced team may have cinched the deal when they put a customer on stage during the presentation, David Kralik, CMO, and Kurt Daradics, a co-founder, say in this building43 video interview.

Voting ultimately put them in the top three finalists category — and launched CitySourced.

Kralik and Daradics demonstrate in the video how new CitySourced apps, which now include several smartphone devices, let citizens report such city problems as potholes, graffiti and trash directly to the municipal agency responsible for fixing them.

The application makes it simple for a user to send a geotagged photo of a problem along with comments to the appropriate city department charged with fixing the issue. City officials keep track of the reports using a dashboard included with CitySourced software.

The CitySourced Web site says crowdsourcing problems using the smartphone apps is an  “opportunity for government to use technology to save money and improve accountability to those they govern . . . ”

Daradics says the CitySourced team is thrilled with the speed of the application’s evolution and its spread. He quoted one person encouraging the development team as saying they fit into what in Silicon Valley is being called the “Golden Triangle” in development right now: real-time, mobile and social.