Arto's Blog

On 24th of August CouchSurfing, the most popular hospitality exchange site, announced a switch from a non-profit status to a corporation, collecting a 7.6 million USD venture capital investment. Quite a few members have expressed disappointment and reacted to the announcement as betrayal of the community. Some have closed their CS profiles and switched to alternative sites such as BeWelcome. Is there a reason to panic? I don't think so.

CouchSurfing has been publicly presenting itself as a charitable organization, but it hasn't really been practising charity nor been poor for a long time. The site has raised millions with a questionable verification/donation scheme during the last few years. In addition to maintaining the site, the money has been spent in salaries, free travel and wild lifestyle for a relatively small and closed inner circle of people. Criticism towards the leadership and management has been presented widely, including a a dedicated site and long detailed articles documenting the problems. In the end, after failing to get officially accepted as a charity, the switch to a corporation didn't come as a surprise. The new legal structure of CS is the so called B corporation, which requires a level of social and environmental responsibility, but it's a for-profit entity nonetheless.

I think the switch is actually a good thing. It's better to be a corporation than claim to be a charity. New venture capital money and guidance from the investors will most likely help CS to improve their service and respond more promptly to user wishes and complaints. And members are less likely to have false expectations that all their donation money would be responsibly managed and used for good purposes.

The income stream from user address verifications will probably reduce so CS will have to come up with something else. Sure, they may continue the verification business, but they cannot label it as a donation any more. My guess is that CS will sooner or later introduce some kind of targeted advertisements, even if they currently have decided against it. People are already used to advertising on many social networking sites, and 3 million registered users with lots of personal information in their profiles would be a good base to start with. Advertisements like “Didn’t find a host? This hostel in the same city would still have rooms available” could even be attractive for users who are mixing various forms of accommodation on their trips.

Another path would be to offer extra features for paying members. This is more tricky as people are used to web sites being free. However, instead of extra features there could be related services which require a company behind them. Two simple examples coming to mind would be insurance covering damages caused by guests (similar to what the paid home-stay site airbnb offers) and phone hotlines helping guests to find alternative accommodation in case they have problems with their host. Such services wouldn't make much difference for a seasoned hospex enthusiast but might make the average new member feel safer.

A lot of work at CouchSurfing has always been done by non-paid volunteers. An interesting question is how the new CouchSurfing corporation will succeed in keeping up the volunteer labor. Programmers and other core people will probably become paid employees from now on. On the other hand, local volunteers (ambassadors in CS terminology) are likely to continue volunteering as before. Organizing meetings and events and hanging out with other CS members is fun, and there's no reason to expect such activities would die just because the status of the main organization changes.

I expect CouchSurfing to continue as the most popular hospitality exchange site at least in the near future. Only a small minority will quit because of the change, and more professional development of the site is likely to attract new members. On the other hand, there are also people who will prefer to use services developed and maintained on a non-profit basis. I see this as an opportunity for healthy diversity in the hospex scene. In order to make profit, CouchSurfing will need to keep growing and make the service attractive for as many people as possible. Meanwhile, alternative sites could gather lively communities of their own, focusing on other values than quantity.

Hospitality exchange has been part of my life for about six years now. During that time, the total number of members in the world has increased from one hundred thousand to three million. It's already a huge movement! The growth has had it's side effects, but the core idea has remained the same: opening your home to visitors and being welcomed to other's homes when traveling, without any monetary transactions. It's simply wonderful.