Plan B for CouchSurfing: A Brave New World

15 September of 2011 by

If you are an active couchsurfer, you would have no doubt have heard
the news that CouchSurfing is no longer a non-profit company. It is
now officially a B (Benefit) Corporation. What does this mean and how
did it happen? For years, Couchsurfing has attempted to gain 501(c)(3)
status in the USA which would classify it as a charitable organization
and tax exempt when receiving donations. However, its application was
declined.

  • Story Roy
  • Illustration Roy
  • Soundtrack of the report
  • Brave New World
  • Weezer

The Mission

Couchsurfing’s mission is rather grandiose in nature as it attempts
“to change the world one couch at a time”. That’s like saying that
hitch-hiking or dumpster diving makes the world a better place. It’s a
stretch, although it certainly helps makes it more accessible to more
people.

In reality, CouchSurfing’s track record is more like “meet and party
with awesome strangers all over the world.” This is still a good
result and arguably, getting drunk with foreigners is a good way to
promote world peace. So on one hand I can understand how an
organization such as this could be perceived as frivolous by the IRS.
But on the other hand, if the National Rifle Association in USA can
get non-profit status, why can’t CouchSurfing?

Anyway, CouchSurfing finally decided to go with Plan B
. So what is a Certified B
Corporation? “Certified B Corporations are a new type of corporation
which uses the power of business to solve social and environmental
problems.” Basically, a B Corporation is a socially responsible
company. Just because a company makes a profit doesn’t make it evil.
People need to eat and pay bills – so why not do what you love, be
socially responsible and make money from it? I wonder if CouchSurfing
is hiring writers…

The Reality

It was inevitable really. Ever since word got out about how AirBnB had
a billion dollar valuation
,
speculation has been rampant about the value of it’s anti-thesis:
CouchSurfing. CouchSurfing has been around for much longer but site
development has been much slower due to insufficient resources. So it
was just a matter of time before CouchSurfing would finally accept
external funding. Having said that, the $7.6 million sounds like a
paltry sum when compared with the $120 million AirBnB has received.
It’s my firm belief that they could have raised this capital easily by
selling shares in the company to existing CouchSurfing members. It
would have better if CouchSurfing was run like a cooperative, for the
members by the members. Or it could have taken a similar route such as
Wikipedia, which is has occasional donation runs to cover operating
costs.

Now that CouchSurfing has investment from venture capitalists, it will
no doubt have a mandate to provide a return on investment to its
investors. The fear mongers would have you believe that they will
resort to a premium version of the site, which I find highly doubtful.
If there is one defining characteristic which defines CouchSurfers, is
they are cheap. Less than 10% of CouchSurfers have ever given money to
CouchSurfing, so a premium service would only serve to disenfranchise
the majority.

CouchSurfing’s success is the community and there are many more
intelligent ways in which CouchSurfing could monetize, be it from
merchandize sales or Groupon-like advertising. This could be mutually
beneficial as the revenue generating function of the site provides
service to its members, not unlike how Craigslist generates revenue in
a community-friendly manner.

As expected, the evangelists at CouchSurfing are up in arms about all
these recent changes. Transitioning from a small community to a
mainstream one is always a difficult process so it’s no surprise that
some early-adopters may feel alienated, especially many of the early
volunteers who worked for free over the years to develop the site and
community. Not only that, CouchSurfing’s ethos is evolving. It’s a
brave new world where hosting someone on your couch for free
indirectly makes shareholders richer.

So the question is not really if CouchSurfing will continue to
succeed. After all, it is already a legitimate form of travel, and
arguably safer than and almost as mainstream as staying in a hostel.
The real question is would you want to be part of this brave new
world?

Roy

Roy is a perpetual traveler. He’s lived in 7 countries, traveled to 50+ more and right now works on a cruise ship. He also likes to talk about himself in the third-person. You can follow his travels on roymarvelous.com.

cap-jeannie

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  1. my guesses are groupon-like offers from restaurants and events around the world based on where you are currently located and where you have been searching (omg! cheap day trip to sitges for three people?! two for the price of one sandwich from that awesome place in paris?) and a crap load of advertisements in the left and right margins of the site.

  2. The evangelists are up in arms? Since they seem to be the only ones willing to directly deal with the economics of the situation, they’re the realists, not the evangelists. Its the Faith in Fenton that is evangelical.

  3. Kasper, you’re right that B corp and Benefit corporation are similar but not necessarily the same. I believe in CouchSurfing’s case they are both. Are you saying they aren’t?

  4. Although both Delaware (where the Couchsurfing Corporation is registered) and California (where they have their offices) have Benefit Corporation legislation, Couchsurfing Inc has never applied for Benefit Corporation status. And in fact, even its almost meaningless private B Lab seal of approval was almost lost, Couchsurfing receiving exactly the minimum possible score 80/200, after being allowed 6 months to make requested improvements. B Lab is a private organisation run by business people for business people.

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