I have seen the future, and it doesn’t mention Uber

As we all know, some of the best ideas come when they are least expected. For me, the epiphany came just as I turned into my driveway; how fortunate that I was moving very slowly at that point, as it was a bobby dazzler of a thought.
Insight often comes through one of three routes: aggregation, extrapolation or conversation (for the record the last is often the most useful but the most risky, due to its anecdotal nature). Aggregation comes from quantitative research; extrapolation from analysing trends and, in the parlance, looking at where the hockey puck is headed.
In my experience, two kinds of extrapolation exist. The first is shorter-term, based on seemingly sudden changes in the business or demographic landscape. Right now, for example, everyone is going digital, mobile, social and so on. And the sharing economy is in full swing, based on the valuations of Uber, AirBnB and the like.
Such waves tend to overlap with, and overtake each other, each wave revealing new winners and sending others crashing into the rocks. Behind such shorter-term changes however, are relatively glacial forces of technology evolution, each continuing on its well-trodden path.
For example Moore’s and Metcalfe’s laws, driving miniaturisation and the network effect, each of which has had such a global impact over the past few decades. While such principles may eventually reach their logical ends, they have a way to run before their impact recedes – the Internet of Things is the most recent consequence.
As they continue, it is they that create and destroy whole businesses. The sharing economy has emerged due to cloud-based information sharing capabilities, creating a cookie cutter of opportunities to link suppliers with consumers. The resulting businesses are symptoms of where technology is at today.
But technology continues, regardless, becoming easier and more open. Inevitably, the ability to link trusted parties will commoditise, becoming a feature of the platforms upon which we increasingly depend. “Sharing” is something we will just do, as it becomes as straightforward to borrow a book or a shovel as to offer a lift.
Any new technology startup has an opportunity to benefit from a massive pool of potential difference as it short circuits traditional business models — simply put, making things cheaper for people while operating at lower cost than traditional businesses. Once such opportunities are plugged however, they become part of the landscape.
This means, however successful a young company might be (I’m looking at you, Uber) it has limited time with which to establish itself. This means either becoming a new platform (move over, Amazon, Google and Facebook) or being subsumed, potentially at massive profit to the original founders — in which case, job done.
But it would be a mistake to see any such business as the shape of things to come. I have seen the future and it is us, going about out daily lives with the tools we need to do so. Sure, we will be sharing and serving each others’ needs. But we will not need multiple third parties to do so, however successful they may appear in the short term.

Airbnb tests Journeys, a fully-managed travel service

Airbnb is testing a new service that will give people something to do in new cities and, in the process, forever dispel the notion that its platform is just about helping people find a couch to crash on in a kindly stranger’s apartment. It’s called Journeys, and it’s currently available as invite-only to people who want to visit San Francisco in December, but haven’t yet booked their trips.
Journeys offers full three-to-five-day travel plans to its selected testers. Through it, Airbnb will offer a free meal during each day; planned excursions devoted to San Francisco’s nightlife, natural wonders, or food scene; agent-selected rooms; and a Lyft ride from the airport to wherever the person is staying. These trips will reportedly cost between $500 and $750 for the individuals invited to use it.
Journeys is focused more on providing a good trip — think of it less as a personal assistant and more as a travel agent. The Next Web, which first revealed Journeys, compares it to the discontinued concierge service Airbnb introduced in 2011. That service was supposed to give travelers everything they could ever want, from offering advice on restaurants to locating the nearest emergency room.
The service also follows other Airbnb tests, including a service that gathered strangers together for meals in San Francisco, and another that made cleaning services available to hosts in San Francisco, New York, and Los Angeles. Neither of those services has become available to people outside the invite-only tests; Journeys could be destined for a similarly long time spent in the testing phase.
Consumers will decide if Journeys is worth the cost. People visiting a city on business, or staying in a neighborhood with which they are familiar, are unlikely to find much value in the service as it currently exists. But those heading to a diverse place like San Francisco on a lark might appreciate having someone to plan their trip for them instead of having to worry about everything themselves.
Journeys could have a larger impact, though, and that will be on the perception of Airbnb as a member of what tech executives dubbed the sharing economy.
The term “sharing economy” has always been a misnomer. Sharing implies that people are offering something without expecting anything in return. But the economy aspect of that all-too-common buzzphrase requires money to change hands, turning the entire concept into a paradox that allows companies to use it in their marketing even as they got lots of money for their “sharing” platforms.
Airbnb was founded to give people a cheap place to stay. Now it’s operating much like a hotel company — and, with Journeys, a full-fledged travel service — that doesn’t happen to own the rooms its customers are renting. This reduces overhead, allows the company to avoid training a full staff for each rental, and otherwise gives it a nimbleness that traditional lodging companies are lacking.
This convenience often comes at the expense of luxury. Billing a platform as the place to rent someone’s apartment in Brooklyn is great for spendthrifts, but the real money is in getting people to see Airbnb properties as a valid alternative to expensive hotels instead of to the Holiday Inns or grimy hostels of the world. Journeys is one step towards that goal, and one away from the sharing economy.
“We are always experimenting with new ways to create meaningful experiences on Airbnb,” a company spokesperson said when I asked for comment on this story. ” We don’t have anything specific to share at this time.”

Hotel industry fumes as UK prepares to legalize Airbnb in London

Airbnb users have many options when they visit London, but they and their hosts are probably unaware that these short-term lets are often illegal. However, that’s about to change – much to the ire of the hotel industry.

On Monday, housing minister Brandon Lewis set out plans for short-term lets to be deregulated in London. A 42-year-old London law says that anyone wanting to rent out their home for less than 90 days must get planning permission to do so, or pay a £20,000 ($30,450) penalty per offence. The government now wants that law scrapped.

“We live in the 21st century, and London homeowners should be able to rent out their home for a short period without having to pay for a council permit. These laws … need to be updated for the internet age,” Lewis said in a statement.

However, the government would still restrict short-term letting to 90 days per calendar year or less, so that the properties don’t effectively become hotels. The properties also can’t be business premises, and councils will be able to apply for “small localized exemptions from the new flexibility, where there is a strong case to do so.”

I’d say it was very silly for London to have different rules from the rest of the country, regarding services such as Airbnb — so this move should be welcomed at least on that front. However, the hotel industry doesn’t quite see it that way.

The British Hospitality Association has been lobbying against these changes for quite some time and says it still has serious concerns about health and safety. In an emailed statement, Association policy director Jackie Grech said the relevant clause had been “hastily pushed through … without any concern for the consequences such as security, employment, housing shortages, anti-social behavior and the high quality reputation of tourism in the U.K.”

She added:

When the first claims come through, they could be serious injuries. It is possible to look out for the interests of community, customers and employees; the hospitality industry does this every day. These multi-billion dollar companies need to do the same and we are particularly concerned for small, family run establishments who have to compete with giant multi billion pound companies.

This all comes a few months after the publication of a U.K. government review of the so-called sharing economy, conducted by Debbie Wosskow, the CEO of home exchange platform Love Home Swap. Astonishingly, the review suggested that accommodation-sharing platforms should be less burdened with regulation.

How Couchsurfing became the Friendster of the sharing economy

Before there was Uber, Lyft, or Airbnb, there was Couchsurfing. For a certain sect of millennials — say, those entering college between 2005 and 2011 — Couchsurfing was transformative. Members all over the globe offered up their couches for free to these cash-strapped travelers.

It was the original sharing economy, except there was a lot more “sharing” in Couchsurfing’s version than there was “economy.” And that was the problem.

Without a way to properly support itself, the application staggered under the burden of its popularity. It nearly went out of business because of technical problems, and its community struggled to maintain its values with the flood of new users. Raising venture funding just exacerbated the problem, triggering power struggles between long time volunteers and new leadership.

Couchsurfing learned the hard way that “sharing” doesn’t scale easily. Can an organization founded on cooperation sustain itself in a capitalist world?

The collective of coders

Couchsurfing had conflict between for-profit and not for profit ambitions from its earliest days. Founded in 2004 as the brainchild of a man named Casey Fenton, it ran like a collective for almost ten years, with volunteers pitching in code and working as the ambassadors for each city. It made money here and there through donation requests but by and large it didn’t generate much cash. Fenton’s business partner, Daniel Hoffer, intended to change that from the moment he joined the company. It took a long time for that to happen.

Photo from a 2008 Couchsurfing camping trip in the south of France with 50+ local members

Photo from a 2008 Couchsurfing camping trip in the south of France with 50+ local members

The digital psyche was far different back then, so it’s shocking people took a chance on the service at all. Sharing economy companies had not yet emerged. Smartphones had not proliferated. Facebook was not a thing. When you were meeting strangers off the Internet, they really were strangers.

For many users, Couchsurfing gave them the opportunity to travel when they might not otherwise be able to afford to do so. Experiencing the world at an early age altered the course of some people’s lives. “I discovered that I had a passion for meeting people and traveling through Couchsurfing,” long-time user Jordan Urbanovich told me. He grew up in a cookie cutter American suburb, but after visiting Europe on people’s couches the hobby stuck. Seven years later he’s still using Couchsurfing — he skyped me from Nepal, where the power cut out a few times in his Internet cafe.

Couchsurfing was magical in the early days, but its honeymoon period didn’t last long. As the word started to spread among users and more and more people joined the application, its cooperative ethos backfired. Its collectively-coded website couldn’t handle heavy amounts of traffic. Bugs abounds and crashes were common.

[pullquote person=”” attribution=”” id=”905661″]The organization operated more like Wikipedia than the Encyclopedia. [/pullquote]

In one particularly bad server failure in 2006, key data and software were permanently deleted. Fenton announced he was shutting Couchsurfing down as a result. But the organization operated more like Wikipedia than the Encyclopedia – there were armies of people invested in it who had dedicated personal time to building it. They rallied together to keep it going.

From cool to creepy

The technical issues weren’t the only ones Couchsurfing faced as it scaled. Soon, more worrisome problems started to occur. Newcomers changed the energy.

“It became this weird playground for people who had social anxieties or were socially inept,” former Couchsurfing user Christa Gallo told me. “They’d show up and didn’t know how to hold a conversation.” Many of the newscomers used Couchsurfing meetups as social events, without actually hosting visitors or traveling themselves.

Christa Gallo (left) and a fellow member of the French Couchsurfing community rock company swag.

Christa Gallo (left) and a fellow member of the French Couchsurfing community rock company swag.

Gallo wasn’t the only one noticing the difference. Urbanovich also felt a change around 2011. “I was hosting in New Orleans and I got a lot of bullshit from new visitors — copy and pasted messages, people who had no desire to hang out with me and only wanted a free place to stay, or people just looking for festival accommodations.”

[pullquote person=”A Couchsurfing user” attribution=”A male Couchsurfer tells other men how to target women for sex on the site” id=”905662″]”The newer profiles are fresh to the whole thing so they haven’t developed a firm mindset on what the site is for.”[/pullquote]

The Couchsurfing community struggled to spread its ethics to newcomers. People started using the service like a dating application with predictably bad results. Rape and assault incidents garnered international attention and female couchsurfers began receiving tons of emails from other overly friendly users. Some men even published guides for how to turn couchsurfing into a “real sex pipeline.” This one has lovely little recommendations, like telling men to target newer female users because “they haven’t [yet] developed a firm mindset on what the site is for.”

One woman, writing for Narratively, detailed her chilling encounter with a host named “Raul,” who posed as a woman on the site to convince her to stay with him. By the time she realized he had lied, she was in his apartment, in a foreign country late at night, with many bags and nowhere to go.

Couchsurfing was experiencing what any company that is truly representative of a “sharing economy” would. When the pool of potential “sharers” is so diverse, unvetted, and uncontrolled, there will inevitably be some bad actors.

Meanwhile, things weren’t going well for the company financially. Couchsurfing’s request for a non-profit status was rejected because the IRS didn’t believe it was charitable in nature. It was saddled with the bills, and if it was going to survive, it needed a savior.

An illustrated history of Couchsurfing with an optimistic future. Drawn years before it received its venture funding

An illustrated history of Couchsurfing with an optimistic future. Drawn years before it received its venture funding

The saving grace

Enter Benchmark. In 2011, the venture capital firm, along with the Omidyar Network, gave $7.6 million in initial funding. A year later, both reupped in a $15 million Series B round along with some new investors, to turn the volunteer-run service into a sustainable enterprise with venture level returns.

Erik Blachford, who is currently Couchsurfing’s Executive Chairman, wasn’t advising the company at the time. But in retrospect, he thinks it was the right move. “At some point if you’re not in the situation to take donations the best path forward is to make a business out of it,” Blachford said to me.

In comparison, Airbnb — Couchsurfing’s far more successful rival in the sharing economy — was designed to make money from the get go. It didn’t go through years of trial and error with its business model, and its outsized profits and rapid growth reflect that. Despite being founded five years after Couchsurfing, it currently has a reported $13 billion valuation and had raised almost $1 billion in venture funding. It’s looking like it will be one of Silicon Valley’s biggest wins from the recent tech rebirth.

Airbnb’s success does not preclude Couchsurfing from thriving. Although they may compete in small ways, the two services are so different in experience — and cost — that they serve different markets. For all its achievements, Airbnb is ultimately a glorified hospitality service, not a cultural idea exchange. As Fred Wilson put it, it’s part of the “rental economy,” not the “sharing economy.”

As sharing grows, caring goes

Couchsurfing meetup in Amsterdam to celebrate Christmas, 2009

Couchsurfing meetup in Amsterdam to celebrate Christmas, 2009

Before and after its venture funding, Couchsurfing cycled through CEOs, acquiring and discarding them like ill-fitting t-shirts. Each one tried hammering the organization into some semblance of professionalism, efficiency, and money-making and each encountered intense push back from the community. Couchsurfing was founded on the ethos of cooperation, not capitalism, and its most involved users were intensely suspicious of the ulterior motives of the service’s overlords.

“Imagine if you’ve been contributing to Wikipedia for years and one day the founders say they are selling it for a large personal profit but you’re still free to use it. Yup, it’s like that,” one former Couchsurfing ambassador explained on Medium in 2013.

Users made meme videos poking fun at the corruption of the organization’s leaders and published cartoons to represent them. The community that had once volunteered hours to run Couchsurfing could not bring itself to trust leaders overseen by a venture capital firm.

Couchsurfing’s corporate team inflamed these problems with drastic product changes. It started making parts of its website public so Google could index them, but in doing so it published personal, sensitive member information, like phone numbers and names. It cut “city groups,” which were hubs of information for Couchsurfing communities, enraging volunteers who had dedicated time to maintaining those forums. Users fought back with online protests, but to no avail.

Couchsurfing also tamped down on free speech on the application. It deleted profiles of some long time city ambassadors who were critical of the company. Many Couchsurfing diehards started calling for defection, telling other users to join the alternative: An open source, non-profit site called BeWelcome. Long time Couchsurfers believed, perhaps rightly so, that the company had started to focus on growth at the expense of community and it was time to abandon ship.

BeWelcome delegate and author of a recent book on traveling cheaply, Anja Kühner, explained how it differs from Couchsurfing. “In terms of the amount of members, BeWelcome will maybe never reach the numbers of Couchsurfing,” Kühner told me. “But sheer quantity is not our goal. It is the quality of encounters that counts for us.”

A reset and changing of the guard

One long time Couchsurfing user said this comic is symbolic of Couchsurfing's leadership. "This company is like the villain in a slapstick cartoon, threatening the hero while holding the gun backwards."

One long time Couchsurfing user said this comic is symbolic of Couchsurfing’s leadership. “This company is like the villain in a slapstick cartoon, threatening the hero while holding the gun backwards.”

It came to a head in October 2013. The latest CEO, Tony Espinoza, stepped down after less than two years at the helm, citing a need for Couchsurfing to “crystalize and strengthen [its] core values.” Couchsurfing’s then-head of member experience, Jen Billock, replaced him. She wasted no time in wiping the slate clean.

She laid off 40 percent of the staff, a dramatic restructuring. She believes the layoffs were necessary, although hard, in order to build the foundation for the company’s future.

Couchsurfing entered a long period of hibernation. Although people could still use it and it continued to grow, the company ceased most publicity, media interviews and marketing. Billock buckled down with her remaining team, putting into place a more competitive, hard-working staff culture.

“The thing I like to play with as a leader is, ‘How can we have emotionally intelligent work place that is also a super high performance work place?’” Billock told me. “Let’s set an aggressive deadline and run towards it.”

Since the Couchsurfing application was first built in 2003 and had been amended and rejiggered over the years, the technology was a mess. It certainly wasn’t capable of adapting to the mobile era that dominates today. Eventually Billock resigned herself to the fact that the entire thing would need to be rebuilt … from scratch. The databases of customer information would need to be migrated, the design redone, and the backend code rewritten, in a more modern code language.

For the last year and a few months, that’s exactly what Couchsurfing’s staff did. Hustling away in their San Francisco office, as the likes of Airbnb and other “sharing economy” companies grew bigger and bigger and Couchsurfing’s name faded away. But not for good.

In November 2014, the company unveiled its big new relaunch and set its sights on the future. It will try to answer the question: Can the “sharing economy” survive when it focuses on the sharing and not the economy?

It’s not just a down-market Airbnb

A thank you card from some Couchsurfing vistors to their host

A thank you card from some Couchsurfing vistors to their host

Although its technical problems are behind it, Couchsurfing’s most difficult challenges are ahead. It’s been three years since it took venture funding, and before the decade is out it will need to start making money.

One problem: Couchsurfing’s free cost is, in essence, its core product. That’s what fosters connection between visitors and hosts, encouraging them to spend time together. If you were paying for the couch, well, then it would be just another place to sleep at night….like a down-market Airbnb.

“There’s lots of different services where you can find a place to stay,” investor Blachford told me. “What makes [Couchsurfing] special is you’re going to stay with someone. We want to be very careful to preserve that.”

Couchsurfing’s leaders are going to try to make money the freemium route, with features like profile verification and host-visitor gift exchanges.

That may wind up backfiring too though. The service attracts people with a certain mindset. Urbanovich, who has paid the verification donation in the past, told me if payment was required he wouldn’t bother verifying his profile. “Like anything in life it just builds resistance if someone’s telling you what to do,” Urbanovich said.

There’s a lot at stake, and not just for the company and its investors. There’s nothing else in the world quite like Couchsurfing. It opens up travel opportunities for those who might not otherwise be able to afford it and connects cultural strangers as a result. It’s the largest such network with the biggest brand awareness. For better or worse, Couchsurfing is the strangers-helping-strangers travel organization that stuck. It has survived in spite of itself.

Billock is optimistic. She said, “The market has evolved beautifully for Couchsurfing and now Couchsurfing is evolving to take its position.”

 

This post has been updated to reflect that it was Benchmark, not Greylock, that invested in Couchsurfing. It has also been updated to show that founder Casey Fenton’s business partner, Daniel Hoffer, had always had for-profit intentions for the company.

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