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Overcoming Challenges On The Couchsurfing Journey

This article is written by Jeremiah Uke, a Contributor Author at Startup Istanbul.

Casey Fenton is the Co-founder and Founding chairman of the board at Couchsurfing International, also the CEO/Founder of Upstock.io (formerly known as Mast.ly), he has also founded other startups Wonderapp and Sovolve, he was present at Startup Istanbul where he shared the lessons learned from his startup Couchsurfing over the years.

Couchsurfing was founded in 2004 by Casey Fenton, it is a hospitality and social networking service accessible via a website and mobile app. Registered Couchsurfers can use the service to arrange homestays, offer lodging and hospitality, and join events such as “Couch Crashes”. The platform is a gift economy; hosts are not allowed to charge for lodging. Members set up an online identity, and after leaving comments on their experiences with other members, develop a reputation. Members can either directly request lodging from other members or post their travel plans publicly and receive offers from other members. The platform boasts of over 15,000,000 users and 400,000 active hosts.

During his session at Startup Istanbul 2016, Casey Fenton mentioned a number of challenges faced in the early years of Couchsurfing and they include:

1. Managing huge numbers of users

Couchsurfing got about 6000 users in its first year, which then grew to 50,000, and then 100,000, and much later 1,000,000 registered users in the first few years, one of the biggest problems Casey faced was getting people to work together, it is hard enough to inspire a co-founder and members of your team to work at a level you expect them to, but it’s a herculean task getting a whole bunch of people especially when Couchsurfing was a non-profit organisation. Couchsurfing created 14 “live-work collections” around the world including one in Istanbul, where volunteers worked to contribute to the Couchsurfing project for 3-6 months to enable growth of the platform.

2. Starting as a non-profit organization

Couchsurfing launched in 2004 and got 6,000 registered users in its first year, 50,000 users, 100,000 users and then 1,000,000 members in its first few years, through its “live-work” initiative, Couchsurfing was trying to expand to charity status, which is the highest non-profit status for companies in the United States. The Internal Revenue Service (IRS) believed Couchsurfing is not a charity and is rather a way to save money, the IRS then instructed Couchsurfing to convert to a normal for-profit company. Couchsurfing converted to become a B-corporation, which is like companies that are in between non-profit and for-profit. Couchsurfing needed a million dollars to convert the company and could not use their own money to do that, they went to Silicon Valley to source for funds to make the conversion, the fund sourcing was successful and Couchsurfing was able to convert to a B-corporation.

3. B Corporations cannot have volunteers

Most of the success of Couchsurfing was achieved by the efforts of volunteers, but only non-profit organizations are allowed to have volunteers. This means Couchsurfing had to change to a different model, Casey and the team were able to find a way to solve this by exploring options.

14 August 2019

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