What does more funding mean for Couchsurfing? — A conversation with CEO Tony Espinoza

CEO Tony Espinoza

Today we announced that we’ve raised $15 million in additional funding. It’s a big announcement and understandably members have a lot of questions. Tony Espinoza, CouchSurfing’s CEO, and I had a meeting so that we could talk about it.

Our investors want to see CouchSurfing become something that really revolutionizes how people travel and connect.

Meredith: So one thing that people are understandably skeptical about is how we’re going to eventually earn money as a company. Can you share how you’re thinking about our business model going forward?

Tony: I think that we probably will end up launching something within the next year, whatever it is. But I really think the website needs to work. It just needs to work well. Whether it’s fancy or not I don’t know, but it should just work, it should be there, it should not be going down, the results should make sense and help you meet people. Ironically at this moment we’re reaching the next level but it also represents going back to basics. Our website is a toolkit that lets people get offline and meet each other. That’s what we need to focus on.

We’re definitely not planning to do something like putting advertising up, or anything else that takes away from the experience or damages the community. We know that surfing and hosting needs to be free. So we have a lot of awareness of what we can’t do. Next step is figuring out what we can and should do.

Meredith: One big question that people have is, what do the investors want? It’s not a gift, obviously, it’s an investment, and I think there’s a lot of concern about what kinds of expectations these people who have given us all this money will have.

Tony: There are all different kinds of investors in the world. If you look through all of our individual investors, you will find consistent track records of believing in technology’s ability to change the world. And not because technology is so great in and of itself, but because people use it, and people use it on a global mass scale. And when they use it that way, and they use it for social purposes, it becomes a fabric that enables things to happen. Investors benefit from change. They invest because ideas grow and have impact. But things won’t grow if they aren’t working.

There are two types of investors. There are what we think of as “investor types” and there are company builders. And those are pretty different mindsets. An investor type is looking at market forces, these trajectories, how things are happening. Company builders have a belief in the model that a company can become really great at something, and if it has the right focus and the right execution then it can become increasingly relevant over time. So company builders look at really broad trends and ask themselves, “Is this part of the world changing? And in what ways does this company fit in? Is it becoming increasingly relevant over time, or neutral?”

Meredith: So you put a lot of work into finding the right investors, people that you thought were well suited to how we want to do things. I know you’ve also made sure that they really understand us and how we’re not just a company or a website, we’re representing this big living culture.

Tony: What I like about the set of people we have in the company is I think that we’re very well aligned in wanting to build something meaningful; because it has impact, and because it’s relevant on a global basis. There are a lot of companies that get funded around here that are all about technology, all about Silicon Valley. And that’s great, but anyone we’ve brought in to invest in CouchSurfing understands that we’re not about that, that we’re really about connecting every country and every culture, and the only reason that technology is relevant is because it enables us to reach everyone, and because it’s become part of our lives every day. In that way it’s vital, and we’re making this next step so that we’re really competent and capable of supporting a network of that scale.

Meredith: We’re definitely in a really unique environment here, where people are putting money into these ideas rather than into some kind of concrete plan. Or at least it seems that way to me.

Tony: So traditionally the world has been driven by value chains. Where somebody makes something, somebody distributes it, somebody sells it to someone, somebody buys it. There’s been this distinction of either you’re on the production end or you’re on the consumer end of the spectrum. And I think the movement that we’re connected to, that’s much bigger than just CouchSurfing, although CouchSurfing lives and breathes it, is that everyone in our community is both. We’re creating experiences, and we’re also happily experiencing them ourselves. What the technology does is it takes out all the middle men, just destroys the value chain and says that people can reach one another and that we can build a system that makes that work really well. That’s such a fundamental shift economically in the way the world works that it creates a huge amount of opportunity.

CouchSurfing already has something that nobody else has. It already has changed the world. And that’s extremely valuable. Our investors want to see CouchSurfing become something that really revolutionizes how people travel and connect. They’re looking at the power of that idea to create something totally new and essential.

Meredith: So how would you summarize what this means for us, getting the new round of funding? You mentioned that it’s a step forward but it’s also a return to basics; could you go back to that and talk a little bit more about what this moment is about for the organization and for the community?

Tony: I want us to start thinking about next June, now. And deliver on that, and match what we do with what we’re saying, and give people stuff that’s going to come true. This is going to be a steady process. We’re in it, we’ve gone from thinking about weeks and months to thinking about the next two years. We’re thinking about CouchSurfing as something that we can think about long term, not just handling where we’re at right now.

Beginning this fall, we’re really going to be strengthening the tools that are available on the website. Making them more reliable, making them easier to use. By having this new platform [Ed. note: the new code base that the engineering team is building] we will finally be able to operate in a way that’s not based on building features, but actually a process of iterating on our service, responding to things that aren’t working the way we hoped and constantly improving things. So instead of working in a vacuum, for the first time we’ll really be able to build something dynamically with the community, and respond, and be involved so that things continually get better.

Meredith: When you say working with the community, what will that look like? What are your plans to improve that conversation?

Tony: Building things that people use and using the analytics to understand what is and isn’t working is really vital. Because there’s an answer as to whether or not this solution is better than that, or what have you. But it’s not actually possible from my experience to iterate or tune your way to a major shift. So you do two things at the same time. You have to actually take risks and innovate and try things that are non-linear. And then on top of that you’ve got to be able to twist and turn and optimize and test your way to something better. So we have to do both. The non-linear pieces come from our ability to understand what people really are doing in the system and want to be able to do, and so that comes from being CouchSurfers ourselves and from working closely with CouchSurfers. How we actually make it easy, approachable, functional, fluid, efficient, those are things we can get from metrics. But a lot of the big ideas really do have to come from CouchSurfers. We need to make sure we are working on better ways to get those ideas to the surface, and that’s something I want to be sure we do.

%d bloggers like this: