Will Couchsurfing Implode?

Growing faster than ever but can’t monetize.

The social travel site, Couchsurfing is in the news again. Tony Espinoza recently stepped down as CEO after only 18 months at the helm. Couchsurfing still hasn’t figured out how to monetize “hospitality exchange” but now burns through $800,000 of venture capital per month. At that rate, there’ll run out of their $22.6 million dollar funding very soon.

An Incomplete History Of Couchsurfing

To understand some of the issues facing Couchsurfing,we need to understand a bit of it’s history.

The Couchsurfing Project was started by Casey Fenton and 3 friends in 2003, and incorporated as a not-for-profit in 2004. Yes folks, we probably should stop calling it a start-up. Or put it this way, Couchsurfing is older than AirBnb, Reddit, Twitter, Facebook or even Myspace. Heck, it was founded only a year after Friendster and LinkedIn. Couchsurfing is one of the pioneers of niche social networking and the concept of hospitality exchange via internet is even older.

July 2006: About a year after I became a member, Couchsurfing experienced a massive database failure. I received an email from Casey, saying that the project was effectively over. Rather than allow a beautiful thing to die, highly-skilled members from around the world rallied to bring it back online. And it came back, better than ever. We only had around 100,000 members at the time but it dawned on many of us that we were part of powerful global social movement. Back then, Couchsurfing was almost completely volunteer-run, as it relied solely on donations and the meagre one-off $25 verification fees. You know, sort of like Wikipedia but not open-sourced or officially a non-profit. But that didn’t seem to matter because the sharing economy didn’t really exist yet and everyone seemed to have best intentions.

June 2007: A number of volunteer programmers left Couchsurfing because they were unhappy with some management decisions, namely the refusal to make the code open-source and the unsettling practise of making volunteers sign an NDA. Some of them went on to volunteer at Bewelcome. This was just the first of many internal troubles within Couchsurfing.

Aug 2011: Couchsurfing exceeded 2 million members and it’s suddenly announced that it will be sold and changed to a for-profit corporation.

Basically, Couchsurfing owed tax money (its tax-exempt status as a non-profit was not approved), it needed far more investment in servers and it needed to hire more engineers to reprogram the site to make it scalable. And apparently, the only viable solution was to become a for-profit, sell a portion to venture capitalists and have it run by professionals.

The problems were real but I’ll be blunt: Couchsurfing was stolen from it’s members. This was code, content & community built by the members, for the members . None of those volunteers, working for free under the false pretense that Couchsurfing would stay non-profit, received any equity in this new corporation. Why couldn’t there have been another way? I would have donated money. I would have been happy with advertising. They could have moved Couchsurfing HQ to Berlin or Chang Mai or Santiago rather than be based in San Francisco, one of the most expensive cities in the world.

The moment Couchsurfing was sold, it stopped becoming a community and started becoming a service, not unlike Yelp or Meetup or Facebook. And herein lies the problem: Couchsurfing now has an identity-crisis.

What Is Couchsurfing, now?

If the majority of Couchsurfing members only joined in the last 2 years and most of Couchsurfing’s remaining employees aren’t even active Couchsurfing members, what is Couchsurfing, now? I’m not entirely sure, myself.

I do know that Couchsurfing is not free accommodation. It’s not even about hospitality exchange anymore. Couchsurfing is about connecting people who are passionate about travel, in the offline world. Some people will hate me for saying this but Couchsurfing is now effectively Facebook/LinkedIn for travelers. From personal experience, more people use Couchsurfing for social events and networking than for hosting or surfing.

This is not a bad thing, nor is it even Couchsurfing’s fault. It’s just evolution. The sharing economy has gone mainstream and we live in a world where travel is more accessible and people are more mobile than ever.

So, what do we do now? How do you maintain quality in a community which doubles every year? (As of writing, there are around 7 million members on Couchsurfing.) Or even more importantly, how do you evolve and cater to most of your active members?

We can’t turn back the clock on Couchsurfing’s checkered past. We can only work with what we have now.

Unfortunately, there seems to be a vocal minority of members who seem all too determined to be negative. Every change is yet another sign of the impending armageddon of Couchsurfing. They live in a rose-tinted past, where everything was fine until Couchsurfing was sold. Rather than accept the present or move on to the non-profit & open-source alternative Bewelcome, they behave like a cancer on the Couchsurfing population.

In the words of Seth Godin, you sometimes will need to fire your unreasonable customers.

Can Couchsurfing Reinvent Itself?

Couchsurfing needs to evolve or it will die. People travel differently now — the only tech you may need is a smartphone. So, I was tepidly relieved when it was announced that Couchsurfing will be focusing their strategy on mobile. I just wonder if they actually have a plan.

Couchsurfing isn’t just for hippies, hackers & burners anymore. It’s an ecosystem which is useful to pretty much anyone who likes to travel. (Except maybe people who go on cruises or to all-inclusive resorts. Let’s just say, those people tend to be a little different.)

What hasn’t changed though, is Couchsurfers still like to be social and they are usually cheap. So what better way to serve them, than by keeping the service free and providing access to exclusive deals? For example:

Location-based coupons & advertising Targeted advertising for transportation, gear & other travel needs Partnering with tourism agencies & local establishments to offer heavily discounted “groupons” for Couchsurfing meetups Collaborating with airlines, railway, hostels & hotels to offer a booking engine with last-minute discounts for Couchsurfers

I know that last suggestion will attract the ire of veteran Couchsurfing members. But as anyone who’s ever tried to look for a host in a big city will know, there just aren’t enough couches anymore for every Couchsurfing member.

Besides, what other choice does Couchsurfing have?