Rooms Rentals & Shares

How Couchsurfing Plans to Take Back Its Corner of the Sharing Economy

@SamShankman

Aug 14, 2014 7:30 am

Skift Take

Couchsurfing sobered up only to realize it was the last drunk backpacker left at the party and the rest of its friends had gone home to make money and travel in a more sophisticated fashion. Can it keep true to its beliefs to grow up without giving in?

— Samantha Shankman

Free Report: The Changing Business of Extended-Stay Hotels

Couchsurfing

Jennifer Billock is charged with transforming Couchsurfing from a community into a business. Couchsurfing


Looking back on the rapid growth of alternative travel businesses, one can either look at Couchsurfing as an innovator that predated local culture-obsessed trends or as a young idealistic community that grew complacent rather than up.

Either, or both, Couchsurfing has been quietly entangled with politics and money problems while entrepreneurs and investors poured millions into peer-to-peer concepts all around it. It’s now looking to escape a period that, though successful in terms of growth, was wrought with user revolt and financial stagnation.

The company announced this week that interim CEO Jennifer Billock will become the permanent CEO.

Billock originally took on the role in October 2013 when then-CEO Tony Espinoza stepped down amid layoffs and a platform shift towards mobile. The executive shakeup came one year after a rebranding that put the company at risk of losing its most loyal users.

Today, Couchsurfing touts 9 million members in more than 120,000 cities. The majority of the growth has taken place in the past five years with impressive growth recorded in 2012, following a funding round in August 2011.

Couchsurfing has raised $22.6 million from investors including General Catalyst Partners, Omidyar Network, and Menlo Ventures. Billock says the company has ample funds and isn’t considering raising more money at this time.

Along with the announcement of Billock’s permanent position, Couchsurfing also announced the appointments of two travel industry veterans to its board. Ex-Expedia CEO Erik Blachford joins as executive chairman, and Joel Culter joins the board as a General Catalyst representative.

The addition of these board members brings up the inevitable and arguably most important topic: revenue.

Blachford, who says the new role allows him to act on his longtime interest in local-traveler connections, suggests Couchsurfing’s playbook would look a lot like other services with a free core membership and paid features available on top of it. Think about the differences between free and paid Spotify memberships, for example.

Other revenue channels could look very similar to the organization’s only current revenue source: Its verification system brings in $25 per verified user.

Tech, Then Features

For now, the organization is obsessively focused on its technical infrastructure and user experience.

Billock has recently emphasized mobile due to the success of its new app, released in June 2014. Billock says daily active mobile users have tripled, and the average session duration increased fivefold in less than two months.

“While this may not seem terribly sexy, it’s critical and overdue, and it’s what the community has been asking for,” explains Billock.

The majority of current employees, 12 out of 17, are engineers working to introduce a more intuitive design, faster interactions, and tools that make it easier to connect with other users.

Billock is tightlipped on future features, but suggests possible additions include map, photo and real-time search features.

Fitting In, or Standing Out

While Billock enthusiastically explains how she’s an avid user of Lyft and Taskrabbit, she is hesitant to lop Couchsurfing into the larger sharing economy, saying, “I think it’s a term that people use in different ways to mean different things.”

The differentiation feels like a marked attempt to separate Couchsurfing from its more successful successor, Airbnb.

“Airbnb is doing something very different from what we do,” says Billock. “There’s a lot of beauty and power in what they’re doing.”

Blackford echoes Billock by explaining how most rental and hotel transactions revolve around money, while Couchsurfing revolves cultural interactions.

Billock does have one unexpected, but interesting role model in the tech space: Github.

“They’ve transformed the way we do things through collaboration and sharing — the very things I spend most of my waking hours thinking about,” she explains.

“Not only have their tools helped to transform the development practices of an entire industry, they’ve found a way to create substantial value for enterprises while building a business on top of the open source paradigm — something that before Github, was essentially free.”

The ethos seem to match Billock’s business-building goals, which whittle down to building a platform for Couchsurfing, and the connections it facilitates, to flourish on top of.

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