Last autumn, the board of Couchsurfing met to review Tony Espinoza's stormy tenure as CEO.
The travel social network had seemed powerless in the face of a small, but vocal minority of digital stone-throwers who wanted to fire executives and replace them with people who better espoused the community's core values.
In the end, Espinoza resigned, and director of member experience Jennifer Billock became interim chief executive of the San Francisco organization -- which had switched from non-profit to start-up status and had, in 2011 and 2012, raised $22.6 million from venture capital firms.
Billock stepped into a mess.
Couchsurfing's website was roundly considered to be antiquated, while operating margins didn't exist. Airbnb, which relies on paid transactions, was swallowing all of the media oxygen, while an archrival, BeWelcome, was establishing a beachhead among travelers who preferred the approach of a non-profit business to a for-profit venture when it came to peer-to-peer listings.
Jump ahead to today, and the board has decided to hire Billock as its full-time CEO. To clarify the decision, Matt Cohler, general partner, at Benchmark and a board member gave this statement:
In the course of our search for a CEO, it became clear that Jen was uniquely fitted to fill this role. Her operational and leadership capacities have proven outstanding, and her belief in and dedication to Couchsurfing and her passion for its global community are striking.
She leads with tenacity, grace and humor and consistently delivers.
In related news, Joel Cutler, managing director of General Catalyst Partners and an entrepreneur who co-founded National Leisure Group, is joining the board.
More significantly, Erik Blachford, a venture partner at Technology Crossover Ventures, has joined Couchsurfing's board. He was on the founding team at Expedia and was a CEO of Terrapass, a carbon credits seller.
As executive chairman, Blachford intends to have a hands-on role in guiding Billock to build the company and its community.
Billock's previous jobs include attempting to start an eco-diaper company and being a product design director for video company Kontiki and a vice president of product development at Listen.com. She said in an interview:
"This is my first time in the CEO role, but I have managed larger groups in larger organizations."
Getting its groove back
Billock said she was optimistic about the company's trajectory. It has 17 full-time salaried employees, 12 of whom are engineers.
Billock says that being an avid Couchsurfing member isn't a prerequisite for working at the company but it's a cherished bonus when it happens. She says most of the staff has "some connection to the ethos of Couchsurfing" and that a lot of the team members host, including herself and her daughter.
Couchsurfing has also continued to grow its membership base, from about 7.5 million last October to 9 million now. That's a far cry from 2009, when the platform only had 1 million members. Most of its members live in the US and Europe, but much of the growth is happening in Latin America and Asia.
The company doesn't provide detailed metrics on how many nightly stays are generated through its platform. But Billock says "the figure is in the millions," adding that most of the members use the site to find lodging instead of for meetups for socializing.
Starting from scratch on the technical side
Billock's goal for the next few months is to put Couchsurfing on a more modern foundation by upgrading to newer information technology.
The technical upgrade began this spring with the rollout of new Couchsurfing mobile apps for Apple and Android devices. The apps have an almost entirely different code base from the previous versions. The more efficient code will enable the company to add sophisticated functions later.
User engagement metrics with the apps are ticking upward, when compared with the original versions. The average user session is 5 times longer in the psat. (The company declined to disclose specifics.)
Billock credited the increased activity on the app to new messaging features, which make it easier for a host and a guest to finalize trip details via their mobile devices while being on the go.
Engineers are paying equal attention to the site's platform for desktop browsers. Many of the site's forums and other features are too dense for readers to follow the threads and respond in smartphone app. These are also being upgraded.
The business side on hold
Couchsurfing says that its sole source of revenue is its verification system.
In short: hosts pay a fee, such as £16 in the UK, to have the company mail a card their residence. The card has a code on it, which the host can then type into a form on the Couchsurfing site -- confirming that they live where they say.
The company's website says there are "nearly 1 million verified users worldwide."
But there are no other efforts to make money in the works soon.
"One reason we haven't introduced new monetization options is that the technical system is old and brittle. To really deliver value to the community, we need a modern system that works better for members in how they connect across the world....
We're fortunate in that we're strongly backed and have a substantial runway. We don’t have to trip over ourselves trying to monetize something before the product itself works really well....
We have people who write in and ask us in how they could give back to us....
We believe many users value the service enough to make a monetary contribution. It's up to us to find revenue streams that are in line with the core value of what the service provides."
This past May, Billock attended an off-site Couchsurfing gathering, the first large meetup she'd been to since the transition. She plans to start touring communities worldwide to get feedback in person from members.
But she conceded that she has hidden from the public eye while waiting for the mobile apps to be successfully launched and to have, in her words, "a positive story to tell."
At an institutional level, there are many efforts at reaching out to members. Most prominently, Couchsurfing re-launched its "Ambassador" program, formalizing a process in which the most active members are given special recognition, such as having their feedback closely monitored by the company.
Billock says she has worked to add more women ambassadors in countries where female travelers might be wary of visiting because of cultural differences -- real or imagined -- as a way of welcoming and reassuring members that they can use the hosting network safely.
She says that membership worldwide is split, gender-wise, 50-50.
Billock faces a challenge of lifting the doomsday anxiety of some long-time members who have been disappointed in recent years. She also must suss out how to make enough money to sustain the business, given that most of its users who generally just want to make friends and find free places to stay.
"What I can say to that point on monetization is that Joel Cutler and Erik Blachford, both very accomplished entrepreneurs in travel, wouldn't be getting so involved and be so positive if they didn't think there was an opportunity."
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