Couchsurfing Goes From Nonprofit to Certified B Corp
In August 2011, the newly-formed company initially raised nearly $8M in venture funding from Omidyar Network and Benchmark Capital before it informed its member base of over 3M users worldwide about its shift.
It wasn’t a smooth transition.
The Couch Pulled From Under Its Surfers
Over the course of four years, there has been a impactful decline in engagement along with some major internal restructuring– which at first led to the hiring of new Apple and MTV Alum, Tony Espinoza, as CEO. He would resign 18 months later. Under his watch, it is said that registered users more-than-doubled to 7M, but many of the existing and new users were not actively engaging on the platform. Additionally, reports indicated that October 2013 also saw layoffs of 40% of Couchsurfing staff.
In fact, this Change.org petition was launched on September 15, 2011 protesting the change in legal structure. Notable excerpts include:
“We represent thousands of Couchsurfing (CS) members, donors and volunteers. We found meaningful work and global connections to each other through our commitment to the ideals of CS as a non-profit organization.
Couchsurfing Intl. was established as a non-profit corporation in April 2003 and registered with the state of New Hampshire as a public charity in 2007. It was dissolved and its assets were acquired by a newly-created for-profit C-Corporation with the name “Better World Through Travel Inc” in Delaware in August 2011. Since its inception, the organization received >US $6,000,000 in member donations and verification fees. Community volunteers freely donated volunteer labor, time and talent which created much of the network’s current value. (12) We find it difficult to believe that the verification income was insufficient to operate a travel website and disagree that these gifts should be sold to investors. We believe that these gifts belong to the community that created them.
We believe these changes betray the relationship the organization had with its network of volunteers and members, the relationship that shaped Couchsurfing into what it is today, and are concerned that its values will not persist.”
While the petition didn’t garner the 1600+ signatures it proposed, 882 supporters did sign as a show of dissatisfaction.
At Innov8Social, we caught scent of this too. Though very few people post comments to blog posts here, there were two lengthy and thoughtful posts by avid Couchsurfing (CS) aficionados challenging the change in legal structure.
Notably “CS host” said:
“Many people were surprised by this move as CS had always prided itself for being a non-profit organization which wanted to be a charity. For those who had seen how volunteers had been used and abused for years by Couchsurfing, how safety measures such as credit card “verification” have been misrepresented, how management covered up repeated sexual misconduct with volunteers by one of its own or how rarely promises were kept none of this should come as a surprise. Reality could hardly be any further from the offical Couchsurfing claim to “create a better world”….
Most will continue to offer their couch, just not for Couchsurfing International Inc. to resell it to travellers against verification payment or optional premium services, but in one of the other more democratic communities organised as non-profit organisations, such as BeWelcome.org or WarmShowers.”
Equally passionately, “Anonymous” noted:
“Couchsurfing and its ‘team’ or ‘board’ or whatever they have constructed now have never kept a promise, certainly not the one repeated for 5 years that “WE WILL NEVER BE A FOR-PROFIT CORPORATION”. Their skill lies in jettisoning devoted volunteers when they ask serious and professional questions.
Instead CS has taken ‘donations’ under the guise of a charity and published delayed audits that always showed they had made hefty margins and had cash in hand.. till suddenly they show up with a $3.9 MILLION debt.
And yes I am still trying to get some equity for my time invested in a proclaimed ‘charity’ -this is why i am ‘anonymous’.”
This is shaping not only in an incredible story of a social enterprise, but a rich opportunity for tomorrow’s social entrepreneurs.
Lessons in Honoring Your Mission and Members
Couchsurfing in 2015 and Beyond
- Lost Roots: The Failure of For-Profit Couchsurfing [BootsnAll]
- Why Couchsurfing Failed [The News Hub]
- Couchsurfing Dilemma: Going for Profit [Inc.]
- Unrest At Couchsurfing: CEO Exit, Layoffs, User Complaints [siliconbeat]
- Couchsurfing CEO Tony Espinoza steps down, board searches for a replacement [VentureBeat]
- Petition against the new legal status of Couchsurfing [Change.org]
- Couchsurfing Raises $7.6 Million in Series A From Benchmark Capital and Omidyar Network to Expand Services and Fuel Growth in Cultural Exchange Network [BusinessWire]
- She’s trying to turn Couchsurfing into a profitable business. And she’s got her hands full [Biz Journals]