Hospitality Networks: Some New Ideas


Over the last few years I’ve written two widely-read series of posts on hospitality networks: first on the breakdown of as it tried to transition from a nonprofit to a venture-backed startup (1, 2, 3, 4), and then on the general concept, covering a dozen competitors as well as Couchsurfing itself (1, 2, 3, 4, 5).

Long story short: CS appears to be stagnating at best in terms of active members (at least the kind that you’d want), but none of those other networks are getting much traction either. Whether the money finally runs out at CS, or they turn it into a generic ad-driven travel forum in order to stay afloat, the prospects for filling that niche — a large scale, community-oriented, free or low-cost alternative to AirBnB — don’t look great.

In my previous posts I offered various unsolicited advice to CS and other existing networks about which revenue models were likely to be sustainable and preserve the spirit of the original project. In this one, I want to outline some ideas for starting from scratch.

Crowdfunding with a Twist

You’ll probably need at least some financing to build your initial site, and even if you think you don’t, you’ll want to raise some money anyway, because it’s an important indication that people care about your project and you’re not wasting your time. I think it’s common knowledge by now that campaigns on Kickstarter and IndieGogo are just as much about testing and/or promoting a product as they are about actually funding its creation.

And when you’re crowdfunding a social network, this is particularly important, because you want to gather a critical mass of committed users before you launch. So here’s the twist: your campaign should have only a single donation level, with no way to give more. The only “reward” should be an initial membership on the site when it launches. And the campaign should also be all-or-nothing, so that if you don’t reach your target, nobody pays.

So let’s say your target is $25,000 and you set the level at $5. This way both you and your backers know that you’re building a site with 5,000+ initial members and $25,000 in the bank, or nothing at all. That reduces everyone’s chances of pissing away their money and time on a network that never gets anyone’s attention and quickly fizzles out. But how can we reduce those chances further?

Referrals with Teeth

One of the latest would-be CS killers, BackPackClub, planned to be “invite only”; in other words, you’ll need a referral from a current member to join. Of course this is a common way for a startup to try to build buzz and a sense of exclusivity. I mentioned it to a founder of one of the other networks, and he was skeptical; he pointed out that with many invite-only networks, the invites essentially become free to the public after they reach a certain scale, because there are too many of them floating around, and people post online offering their extra invites to strangers.

He’s right, of course. But in these cases, no one’s going to get hurt in the real world because someone was careless with their invites. In the case of a hospitality network, these invitations could have a critical role in improving safety.

So here’s my suggestion for our new hospitality network: you can only join by invitation (starting with that initial group of crowdfunding backers) and if you invite someone and they’re ever removed from the site for any kind of safety violation, you get kicked out too. No appeals, no “investigation” — just clean and simple accountability for the people you recommend. And the best way to make someone think twice about who they invite.

Membership restrictions

If you want to encourage reciprocal hosting, rather than mostly-separate populations of hosts and travelers, you need users who are in a position to host in places that other users want to travel. One of the best ways to ensure this is to launch initially in just a few large cities with a lot of cross-travel, and expand from there. A group of 5,000 members spread evenly around the world would mean a fairly low number of actual host/surfer matches, but 5,000 members all in New York, London and Paris would be much more active.

Another obvious thing to try would be a women’s-only network, or women and families only. Many female CSers essentially use the site this way anyway, for obvious reasons.

Pre-launch profile creation

Let’s go back to the default behavior when you join a brand-new social site: you set up a bare-bones profile and then go look at other people’s profiles to see if it’s worth your time filling out more. Since they’ve mostly done the same thing, you’ll probably conclude that it isn’t. And if enough users have this initial experience, the site is dead before it even has a chance to get off the ground.

So there should be two requirements for you to close on your crowdfunding: in addition to those 5,000 users contributing $5 (or whatever you set those targets to), you should set up a mini-site where they can create a basic profile in advance, and require that at least 80% of them do so.

I realize it won’t be easy to get thousands of people to contribute their money and time to a social network that doesn’t exist yet, but it’s clear from the existing networks that it doesn’t get any easier after you’ve launched. So why not tackle the hardest part up front?

Putting it all together

The main theme of the above suggestions is to focus on critical mass and sustainability, so you can get enough of an initial network effect to keep growing; this has been the fatal problem for most of the other networks so far. But it also addresses the core flaws in the initial concept that I laid out last year:

1. More “surfers” than hosts: far more people are willing to accept a free place to stay than offer it.

2. Geographic imbalances: everyone wants to visit the same big cities and other tourist destinations. So even if every member was willing to host as much as they travel, there would still be far more surfers than hosts in these places.

3. Safety and trust: a network in which strangers stay in each other’s homes will be a magnet for thieves, sexual predators, con artists, and lower-grade creeps of all kinds.

I realize that many fans of the “old” CS will reject my suggestions out of hand, because the ideal of a completely open membership with no monetary charge, however small, was so much a part of the concept to them. I get that. Maybe there are other ways to address these flaws. But they are critical problems that were already eating away at the network before the VCs showed up. It’s fair to cast some of the blame on the founders and investors for their decisions, I certainly did my share of that — but not all of it. For all the posts I’ve read online bemoaning the death of the “old” CS, I’ve seen very, very few other attempts to take these issues seriously. Without that, no one else is likely to get very far.