 The phenomenon that we're going to talk about today, thanks to the kindness of its founder, who is willing to visit with us, something called couch surfing. So with that, we're going to start a discussion with Dan Huffert and get a little groundwork laid for how couch surfing began. I guess we should pull our audience. We can't do this easily with the webcast watchers. But for the people in this room, how many have used couchsurfing.com before? So how many are using it right now in the sense of staying in Boston with a host? Excellent. Oh, no. You are hosting people right now. Got it. Not at this very moment. Last couple of days. That works for me. Great. Is there anybody here heard of couch surfing? Or is our audience, aha, Professor Zinberg? So good. That gives us reason to do some exposition. Exactly. Focus group of one. So Dan, first tell us a little bit about your background. If we knew you as a teenager, what would we see? Well, so my name is Daniel Huffert. I'm founder and chairman of couch surfing. My background, as a teenager, I founded an online community. I am 31 years old. So as a teenager, I was working on a project on a bullet board system back in the early 90s and founded a non-line community that connected physically disabled patients, people with muscular dystrophy, with elementary and high school students online. And when you say online, then, if this was early 1990s, this was not internet. Well, this was internet, but this was pre-web. Pre-web internet. So how did they connect? They used to gopher or something? Well, they used, they dialed up to an online bullet board system through the modem. And there was an internet hookup using FidoNet back in the 90s. FidoNet. Anybody remember FidoNet? Ah, Chris Segoian, of course. FidoNet. That was where bulletin boards at individual phones could call each other on the phone in the dark of night and swap messages with one another. And if you had a wrong number in the FidoNet list, it would just keep calling it and be a human answering, saying, shut up already. I don't want your loud screeching noises. Right. It was a pretty crappy system. But it kind of worked. It worked just well enough to give you hope that it could work. And what first got you into this? You know, I got into online stuff in elementary school. I was really bored. I grew up in Berkline. Say no more. Not a lot goes on in Berkline. More now, I think. I think that town's got more excitement. But it was kind of a quiet little town. So you turned to computers to ease the boredom. Well, you know how you get the stereotypical 13-year-old? And in their real life, they're a 13-year-old. And online, they're like master of the universe. Or like dark lore or something. So that was me. So I had my whole alter identity online. And how did that project turn out? That was great. Because it was so early, it was kind of innovative. So it was publicized on the front page of the globe and lined up a bunch of schools around that. It's really news perfect, isn't it? Yeah. Young teen helps the disabled using computers. Right. Yeah. So it was a good start. I was back in like 92. And then just got a impression there. So you go to college? Yeah, so I went here. Harvard College? Harvard College. You can hear the cheers if you're on the webcast. People are cheering wildly right now. And you majored in? Philosophy. Philosophy. Deep thoughts about unemployment. Got it? And while you were in college, were you? Yeah, so in college, I ran a software consulting firm out of my dorm room, partnered with local companies, mixed-step technologies, and other local firms. I see Nexstep is represented here today. Very good to see you. Yes. It was trade-off to you. And I had a bunch of clients. And then started to leverage act towards founding a dot-com, raised a couple million in venture capital. I was still a student at the time, so I took some time off. And what was the dot-com called? Dot-com was called Fuxito Worldwide. Easy to spell? Yeah, yeah. It was based on some Spanish word. It was a soccer website. So our target market was in Latin America. So we figured we needed some Spanish words to reach the customer. And how did that turn out? It crashed, ultimately. Raised a couple million. When you first, it was Spanish soccer, you say? Yeah, yeah. When you got your first tranche of money, were you like, go! Sorry, I had to. So actually, we had Seamus Melon, who's a local MLS commentator. He was working for us. He was also affiliated with Harvard, actually. And yeah, it was a lot of fun, learned a lot. But at 22, I didn't really know anything about running a business. OK, so out of the ashes of that, what happens next? Yeah, so then I hired a team for that company and ended up hiring the people who later became my co-founders for couch surfing. So my VP of technology and also usability ended up, we became friends. And we ended up co-founding couch surfing later. When did you get the idea? So the idea was, so I had done a lot of adventure travel. But the idea was actually, my idea kind of also the genesis of my partner, Casey. Define adventure travel for those who are not adventurous. Yeah, so after college, I graduated. I spent a few months traveling through Southeast Asia. And I was, by myself, traveling through Bali and make friends with local people in Bali and ended up staying with them at their homes. And staying up late and drinking beer and playing chess and just having a totally different experience than you would get if you stayed at a Marriott. So that kind of tuned me in. And I also done things like that in college. I took some time off. I wasn't the typical Harvard student. I went and worked on a ranch in Texas one semester in college. I had trouble getting through Harvard. Made it eventually, but two detours along the way. So I worked on a ranch and couch surf there, which was also a very different experience than just getting to see a different kind of person and people culture. So I guess it would be helpful to define the term. What is it to couch surf? Yeah, so to couch surf is, well, so we've actually expanded, we tried to expand the definition of the term a little bit. In common parlance, it means to stay in someone's home and sleep on their couch. Generally, someone you don't know otherwise. Well, I mean, traditionally it's been someone you do know. We've kind of expanded this to people you don't know. That's kind of the core value proposition. But we also encourage couch surfing to be not just limited to staying on people's couches on an overnight basis, but also if you're traveling, you want to make friends somewhere. Maybe you already have a place to stay, but you just want to see the scene. You want to get to know local folks. Couch surfing, by our definition, is still perfectly valid to reach out to people and meet up with them for a cup of coffee or go out for a beer or go to my club with them or whatever. You don't want to go. So your initial conception for the site was what? So I was inspired based on my successful experiences of couch surfing in Texas and in Bali and so on. And the way you basically do that is you would meet people at a cafe or a restaurant or something. You'd greet them. They'd greet you. And they'd say, where are you staying tonight? And you'd say, I'm glad you asked, because I got nothing. And then they'd be, why don't you stay with us? Something like that, yeah. And then you'd do something in exchange. Yeah, so in Bali, Bali is not a terribly wealthy area. It's part of Indonesia. And so I try to bring big bottles of beer for us to drink as we were staying up late. My contribution made me a feast and so on. And obviously, a thing of a specific experience. But the idea for the website came from my partner, Casey. And he was taking a trip to Iceland, wanted a place to stay, was traveling on a budget, and ended up finding a mailing list of university students from Reykjavik. Basically, spamming, completely inappropriate. Where is Reykjavik? Reykjavik, Iceland. OK. Somebody says, what's the capital of Iceland? And the answer is about two Krono right now. It's going to date the webcast. It'll be one Krono next year. Spams the list inappropriately. He sent out an email to the entire list. There's kind of like 1,000 students, none of whom we knew, obviously, saying, hey, I'm an American coming to Iceland. They said, we know. He's like, you know, any chance I can stay with someone? And a bunch of people responded. And they said, yeah, you know, come stay with me. So he did. Had a great experience meeting some locals, staying with them. And from that, we decided, hey, we should institutionalize this. We should make it easy for other people to have the positive experiences with staying and spending time with locals. So at that point, was this sort of a back burner project? Or this was like, let's do it full time. We're going to build this site and roll it out. Yeah, it started out as back burner. My partner was working on a political campaign. I was working as a management consultant. And so this was kind of back burner for both of us. And then my partner is a programmer. So the site certainly benefited from programming because that's what it is. So he started to wean himself off of full-time work in order to get a bit more and more time to build the site. And when you conceived of it, was it as a money-making proposition or non-profit? So country-making is a non-profit. And it's something we've always got a lot of questions about. But the idea was, no, partially the idea was so that when we traveled, we could have more people to stay with and have fun with. Do you block the Wayback machine from couchsurfing.com? Not that I know of. Say what? You have a spider eye, possibly. Well, the question is, it may be, it's funny that it has no, I was going to look for the old couchsurfing, the oldest possible home page, but it looks like the Wayback machine has been instructed not to. Anyway, we digress. Sorry, you were saying? Yeah, so couchsurfing is a non-profit. And the idea was that just from a personal selfish level, we wanted more people to stay with when we were traveling. Because it would be more fun if you can find people everywhere. But we decided to open it up and enable other people to have great experiences. And money was not really the primary motive. So we made it non-properly. We thought that would influence the feeling of the site, the culture, which I definitely think it has. And to this day, we're still non-profit. So how did you unveil it? So there it is. This is our new logo, by the way. It's funny, this is small digression. But you always, running a business, there are always things you never think of. We just did this new logo up here. And then the people in Asia are members in Asia. We have hundreds of thousands of members in Asia. We started getting this hate mail saying, now why are you discriminating against Asia? We're important, too, because you're not showing Asia and your logo is only so much. This was the old logo? No. No, that was one of the. That's a competitor that's ripped off your name. Yeah, that was one of the t-shirt designs. I see. Anyway, I totally forgot the question. I got distracted by my name. How did you unveil it? Oh, how did we unveil it? Yeah, so the go-to-market approach was done. We posted on, we basically did grill and marketing. We've never paid for marketing at all of any kind. And we posted on tribe.net, which was a little more prominent five or six years ago than it is today. But basically, we just sent out emails to a bunch of news groups and using that and saying, hey, we've got this new site, check it out. What did the adoption curve look like? So actually, if you click more statistics, see the adoption curve, go up and go to real regional stats all the way to the bottom. All right, there's the adoption curve. And then this is cumulative, and this is weekly. I see every now and then there's a spike from some particularly prominent. So there was a period of time, say from here to here, where you were just like waiting for the ship to come in. Well, I mean, honestly, back in the day, we get something like 2,000 members every day now. When this started, we were so excited to get two members. It was awesome. And I used to go and read every single new member coming in. I looked at their profile and kind of learned about it. It was very exciting. It's like Tom friending you on my space. Exactly. So I didn't friend everyone, but I definitely looked at the profiles. We call it customer research, but it was really just because I was excited someone was visiting the site. So it didn't feel like slow growth. Also in part because we weren't backed by extra capitalists. We weren't performing the specific milestones or target metrics. This was an even strap. So it didn't really matter how fast it did. And the original functionality of the site was user registration, declare where you'd like to stay, or declare where you are, and who'd like to host. And then kind of almost an eBay-like engine that just puts the two together. Pretty much. I mean, the core functionality hasn't changed a whole lot. The core is the same. And we've made things more robust. We've built out features. We've had to invest a lot in scalability of the site because we now get so much traffic. So our technology team is always just dealing with the growing pains associated with scalability and growth. And when was your first sense, if ever, that simply arranging for people to get together and calling it a day as far as the site was concerned was not enough to keep the community thriving? And again, it might be a loaded question. Maybe that is enough. Well, I'm curious why you're saying it's not enough. Well, I guess I've talked about couchsurfing to audiences which include almost no couchsurfers. There's still plenty of those, as you might guess. And when I describe it, I say it usually a little playfully as, at last, a site that connects people who want to sleep on a faraway stranger's couch for free with people who live far away and would like a stranger to sleep on their couch for free. And often, my senses, when people hear about it, they say, well, geez, how many people have been robbed or hurt using couchsurfing? That's a kind of classic Fox 25 News at 10 kind of question. Exactly the kind of phenomenon by which Fox 25 or other local news, don't mean to single out Fox, would lionize this as a really cool thing. And then the minute there's a problem, just like we have the Craigslist killer, you never call it the newspaper killer if somebody used a newspaper ad to get to somebody. That's something that's, uh-oh, one of the dangers. So is there that moment where if somebody says, or you're even looking, I had a bad experience, you wouldn't want this person to host or to surf on your couch again. Do you figure the system ought to somehow be responding to that? Yeah. Yeah, so couchsurfing. So it's kind of a long and complex answer to that. So you rain me in it by start talking much. Couchsurfing is based on a mentality of idealism and faith in others. So typically, when I tell people about couchsurfing, the first, in many cases, the first reaction I get is what an awesome idea. And the second reaction I get, which happens about one second later, is, is it safe? So, and especially for women. So safety is a top concern, and we're certainly very sensitive to it. You know, basically, we have facilitated approximately two million positive experiences through the site. And that's what attracts people. The media is a fickle animal. And one day they'll say your praises, and the next they'll turn on you. We have been fortunate that they have, by far, some of our praises much more than anything negative. But yeah, there is the concern. I mean, we, you know, there's never, there have never been any murders through the site. Thank God, you know, we're not going to work, right? And that's the risk, you know? And we have, you know, I've worked, we have a whole PR team now, because we actually receive a ton of media coverage. I've worked with my PR team and, you know, helped put a plan in place for, you know, how do we deal with incidents like that? You know, how do we deal if the press gets hold of it? You know, they, everyone's looking for a story, you know? And if they get, if they hear about something juicy and someone gets hurt or killed or whatever, you know, they're gonna love to broadcast that as loudly as they can, because it's a good story. So, you know, so we have a PR team that's now trained at dealing with that, and, you know, we've been practicing procedures and so on. But all this stuff that you go on the site, when, as you say, question three on the fact is, is it safe? Right. There's all now sort of extra features. When do these features come along that members can vouch for each other, that you can be designated an ambassador, or that you've been verified to different levels? That starts to sound 24-like. Maybe just explain these quickly, and then how did they come about and when? Yeah, so, you know, so we've thought, I mean, obviously any startup is a progression, right? You're always, and even if it's not a startup, you know, Coca-Cola and Pepsi iterate on their model every day. So we're always iterating and trying to figure out how to make everything more effective and more successful. So some of these things didn't exist initially. We have a number of systems in place to help address safety concerns and to make the site safer and to make the community safer. So one of those, if anyone has used eBay, you know, there's a seller, you know, reference system and people rate sellers, right? So we have a system like that. You rate the couches that you've stayed on. You write references. You actually write text about the people that you've stayed with. And is this easily found or just wanna have to log in to find out? No, you can find any member who's available. So if you go to the homepage and click on a photo of a member, yeah, just click, sure. Just scroll down. There you go. So these are references. This person has a couple references. There you go. Charismatic and fun and... Good with people, pets, no. So, you know, this is the kind of thing people write about each other and they characterize the experience as positive, positive, neutral or negative. We used to have extremely positive, positive, neutral, negative and extremely negative. If anybody got rated short of extremely positive, they're like, what was wrong? What's it an idea? Yeah, I mean, what I found interesting is some of the different ways culturally that people react to each other. So in Latin America, people tended to rate more positively overall, which is kind of interesting. And then, you know, other cultures, people were especially afraid to rate negative. You know, kind of, were a bit more sensitive about saving face and so on. So, you know, one of the things we've had to think about is what kind of system really captures this in a way that is universally understood, but also is not too granular in a way that's kind of confusing or there's also the risk of people getting offended by, you know, if someone gets rated positive and instead of extremely positive, you know, you get your feelings hurt a little bit. What could I have done to be extremely positive? Are we taking questions? Sure, Chris. So what you've described here essentially is a reputation system, similar to eBay, right? And one of the, I guess the problems that eBay's system has suffered from, first is that you can go on and basically transact with yourself and give yourself positive feedback. Feedback farm, you win your five closest friends or alter egos. So I could go, I could create a bunch of fake accounts and give positive feedback to someone and then you sell something for $10,000 and then never deliver the good, right? So you have the possibility of that and then, you know, reputation networks in general, Bonnie are as good as the cost of creating a new account, right? The minute you have any sort of negative feedback, you ditch that account and create a new one. How have you mitigated those issues in your system? Yeah, so you raise an excellent point and so that's a great segue into another one of our systems that we have in place and operational processes. So we also have an identity verification system and that helps authenticate that people are who they say they are. So, you know, the risk is that I can create five accounts in couchurfing under five different names and I can leave myself five different references all extremely positive and fuel the world, right? So that's the risk. The way we partially mitigate that risk is through our identity verification system. What we do is we use credit card information and sometimes passport information to verify that the people live where they say they live. So we send a postcard with proprietary code to someone's address based on their credit card information and then they need to punch that code into the website and then we know that they live where they say they live. It's not foolproof. And ultimately, something we emphasize is that this system can be gained. This is not perfect, you know, you can't know for sure. So if anyone says, can you guarantee that couchurfing is safe? I say absolutely not. There is no guarantee like that at all. That said, what we have works. Well over 99% of experience, like I said, two million positive experiences. So one of the more experienced couchsurfers and it seems like we have a number of couchsurfers in the room, which is great, I think become experienced at reading profiles and actually being able to, you know, they increase their ability to spot any potential issues. And it is possible to get a sense of someone from their profile and also based on comments. You know, if all the references have the same writing style or the same punctuation style or typos or whatever, you know, you can start to get a sense of these things. And also by looking at the references themselves. You know, if I leave a reference for someone and then someone's checking that person out and they link back to my reference, they see I'm a founder. They say, oh, okay, well, you know, if Dan's providing reference, then that means he's met them. Probably not, you know, probably gonna be okay. So, you know, you get to see people you also, couchsurfing also tracks kind of like LinkedIn, who you're connected to inside the site. So you can see which of your friends might know someone you're gonna stay with or how many layers away someone is. So there's no one system that makes it perfect, but in aggregate we have multiple ways of addressing this challenge that combine and make the system work pretty well. What percentage of the feedback left is negative? So that's actually tracked. If you go on to, if you go back to mission statistics page, go back to homepage and click statistics. Statistics. Go down. Go down. Up. Up. Sorry. It was under about. Under about. Or left. Mission, okay. So that's regional statistic. There's also mission statistics. Yeah, so we got. 99.806%. Okay. Pretty good. How big a customer service operation do you run? Are people sometimes contact you, somebody left a negative thing and were clumped over it? What, you know, how can I have it expunged? How can I tell my side of the story? Sort of thing or. Sure. Yeah. I mean, I get the most ridiculous emails sometimes. I get these like three page emails from random people in random countries. Saying, you know, my neighbor was on the site and then, you know, they, there was a girl and, you know, I don't know, a dinner and someone knocked over the candle and then the curtain caught on fire and all this stuff. And bottom line, they left me a reference and my profile got deleted by the safety team or something and can you please restore it because clearly I deserve to be here. I get this all the time. And the answer to that is. Interesting. Yeah. And there's a safety team. There's a safety team. Are they employed? Are they paid? Yeah. So we have, so one of our core really valuable teams is we have a member dispute and safety team, MBST. And we have a woman named Rachel D'Serbo leads that. She is a full-time employee of couch surfing. She is also recruited by a volunteer staff to help her very selective in recruiting as it's a very delicate position. But basically these complaints come in, member disputes and then the occasional safety issue comes up and it all goes to her team and they review it and then depending on the situation, may or may not take action. And some of those actions, they do delete accounts in certain instances. Unfortunately, in very rare instances, there is something like a theft. And that unfortunately has happened. As you can see, 99.8%, it's extremely rare. But it has been known to happen. Like an iPod was stolen at one point or something like that. And in that instance, that kind of thing, we will work with the police and we'll take our cues from the cops or the FBI or whatever to do whatever we've seen done. What's your biggest worry about the site right now, about the project? So, what I hope is we have this fantastic community right now. A couple of weeks ago, we passed the one million member market which was a big milestone for us, very exciting. And the thing is, we're growing from a small town to a big sized town or a city depending on how you look at it. There's a risk that the culture changes and you start to get the wrong sorts of people. So on the one hand, we want to open this up and make it more accessible and more available and more useful on a global scale. On the other hand, we want to keep the right type of people involved and we want to keep the special culture that we've had that has enabled us to grow as big as we are today. So basically growing in a way that's sustainable and positive. So is it fair to say that copstirking is something to which one apprentices? You kind of encounter the site and sign up that there's a runway of sorts, a series of quests almost that were a video game but ways that you sort of get to know the culture of the site as well as just the functionality. I guess people might mistakenly confuse it with something like Expedia or Tripadvisor where it says you go in and you get linked and go to a hotel kind of thing. Well, your use of the word apprentice is interesting to me. Not surprising you're thinking of these terms given that you're a professor here. But one of the- I think they're a compliment or insult, I don't know what else to say. A compliment, of course, but otherwise, I'd have to leave right now. No, one of the philosophies of couchsurfing, it's a very egalitarian kind of mentality and in each member profile we have a field called teach, learn, share. And the idea is that no matter who you are or where you're coming from, everyone has something to teach. Even if it's just their own interesting life story, farmer in Cambodia, I guarantee you will be better at growing rice than you. So, and you guys probably know a whole lot more about law than farmer in Cambodia, right? So, you know, and I experienced this firsthand and when I was living on a ranch in Texas, you know, they had me do ranch work and I was a Harvard undergrad. I didn't know squad about ranch work. I kind of sucked at it. But anyway, so teach, learn, share, do you see it there? I'm looking for it. I don't see it actually in this particular. Someone might not have filled it out in their profile so just go to a different profile if you see it. Let me go to my profile if you want. Well, I'm sure yours would have it. Yeah. Anyway, so the idea of apprenticeship going back to Jonathan's word there, I mean, the idea is the teacher is the student and vice versa, you know, you're always learning from other people in the community and we encourage that. And it's more of a, you know, you're both the teacher and you're the student and you're sharing yourself and your culture. So that's kind of a pro-positive cooperative. I haven't seen it yet, but still plenty going on. Well, there are a million more members, so I'm sure it's gonna be. That's right. Question on the online tool. Have you thought about leveraging this to things like carpooling or other social interactions? It's funny that I guess if you wanna share a ride you go to Craigslist. It's a much thinner veneer. Yeah. So we actually looked at the carpool market starting in 2002 or something. So we actually registered a domain back then. I don't even remember what it was. It's some ridesharing.com or some domain that sounded like that. I think one that's taken is Carcer from .com because I wanted to do it. How about Zipcar? This is Zipcar. This is Robin Chase founder of Zipcar. Oh. Yeah. Natural linkages here, yeah. Yeah, so certainly there are some great potential there with kind of some obvious synergies. It could be a bundle deal. You use a Zipcar to go to your couchsurf, and it's bundling. So I believe that Zipcar recently announced, I think today announced an alliance around carpooling and ridesharing. It's something that we've looked at in the past. We ultimately decided we didn't have the resources to dedicate to it, and we wanted to focus on our core competence. Definitely seemed like an interesting adjacent market, but not something we have the resources to pursue. And who decides where the, this is another online question, the hospitality industry, whether the hostile ends of things or TEL, or the nights or hotel sides of things. See you as a threat or something to which they have to respond in some way? Bed and breakfast will be natural. Bed and breakfast, yeah. So if anyone's read The Innovator's Dilemma by an HBS professor, Kyle Christensen, we're kind of the upstarts that catches the industry by surprise after it's too late for them to do anything about it. No, I think ultimately we're, on the one hand we're making a dent because we've facilitated roughly two million experiences that directly cannibalize sales of the hospitality industry. On the other hand, two million is really not that many in the scheme of the global hospitality industry, and it's getting, you know, we're completely geographically dispersed. So I don't think we're hurting anyone too much right now. But I think what is interesting is we have helped create this market and that the market is expanding and to the extent that we can change how people actually think about travel, that could represent a, I could have a snowballing effect that would also extend to other, some of our competitors, frankly, as well, that an aggregate might start to have an impact on it. Because what you get from a hotel when you stay there is a fee for service. Often what they give you is privacy and isolation, not a social experience. So ultimately there'll always be a niche for hotels or a niche for us, depending on how you look at it. But the thing is, for business travelers, for example, business travelers should not couch-surf. And I think I've done my share of business travel at Fortune 500 companies, and it's just hard to develop the relationships with the hosts that we encourage because you're too busy doing business. You know, we're just talking to you, what's your Wi-Fi key? Yeah, exactly. I mean, you're there on business, you've spent that time. And we try to de-emphasize a transactional relationship. It's not about free accommodations. It's about developing relationships with people. So there will always be room for hotels. We'll always have a place. I think we will always have a place. Then in breakfast, as you noted, I think would be the most likely to be potentially cannibalized by this, as well as use hostels. But, yeah, and that's certainly already happening on the youth hostel side, more than in the other segment of the hospitality industry. Questions? Sure. Oh, sorry. Going back to your, because I saw your angle, going back to your earlier statements about the future of the web and whatnot, which I kind of found to be interesting. The core value proposition, can you expand on that at all? Of couch-surfing? Of couch-surfing, in general. What is the core value proposition? Couch-surfing. Yeah, I guess you can apply it to Go-Surfing, yeah. Yeah, is that a term that you apply in marketing in general, or is that a term that is specific to Go-Surfing? So, well, I mean, I'm a business guy, so I talk in terms of value propositions, I guess. I mean, I'll... Core value proposition, is that the... Yeah, I'm sorry, I didn't mean to... Yeah, so from a couch-surfing perspective, I see the opportunity, the core value proposition, to be being able to meet new people and develop relationships with people that he would not otherwise have the opportunity to meet. Suppose another business-type question would be revenue model? Sure. Does that answer your question, or...? Well, no, but thank you. Revenue model? Anybody sad about it? All right, there we go. We can talk afterwards, if you want to. Revenue model, so we charge for... So we do not run advertisements. That's certainly... A lot of people assume we run advertisements. Even the press writes articles about us and talks about our advertisements. We don't run advertisements. So we charge for identity verifications, which is a process I described to you a bit earlier, as you know, it's not a foolproof process, but it is how we make money. It's optional, members don't have to do it. Only roughly 10% of our members have actually gone through it, but we make enough from that that we're actually profitable as an organization. And that's technically a donation? Depending on how you look at it, yeah. Well, then how your website seems to look at it is, donations including verifications. Yeah, okay. All right, so almost 800K. Yeah, 200K, yeah. So, you know... Is there a breakdown between the initiatives of our people donating without... Donate now, do people donate now? So I did the analysis a couple of years ago. It was 83% verification revenue and 70% donation. I suspect it's even higher verification right now. So for the most part, people get verified and see that as their donation. In the same way that if you contribute to the World Wildlife Fund, you want your little sticker, the whale or whatever, the polar bear or something, and so, you know, so they donate to us and then they get verified and that tends to be how it works. But you know, if we were more financially motivated than we are, obviously there's a lot of things we could do. We could start running ads. We could raise our prices. Now there are a number of things we could do. We're in talks with Intel right now if we do a sponsorship, we might do it, you know, but we're, T-Mobile recently did a campaign about us, about capture food. So I mean, you know, there's money out there. Right now we're profitable as it is. We're doing pretty well and so it hasn't been our primary concern. Mr. Couple of questions. One along the lines of competition, have you looked into the, to getting into the market of it? I don't know what exactly it's called, house swapping. And the other question would just be, have you tapped in at all into the slow travel movement? Sure. So in terms of house swapping, the capture thing, you know, the core value proposition of capture thing is facilitating relationships and also by extension facilitating intercultural understanding. So house swapping doesn't really achieve that because you're, you know, meat. So that has not been as a much interest. Slow travel is, is great. I mean, certainly a number of our members live it. I'm not sure, not sure what role exactly we would play in encouraging that, but we're, you know, we support it in principle. We're in the back. Just out of curiosity, in terms of verification versus donations, is the percentage that people are donating higher than people are paying? Percent? In terms of individual basis. So given many egalitarian nature of the site, I'm just curious if the donations, if they don't pay verificationally, give a higher donation? Yeah, yeah, and in many cases, our donations are of a higher average amount than what the comparable verification amount would be. The number crunching actually gets a little bit complicated because our average price is changed by country. You know, it costs a different amount to get verified in the US than it does in Thailand. And that's not because it costs us different, it actually costs us more to verify in Thailand, but $25 in the US is a lot cheaper than $25 in Thailand. So we've thought a lot about what is the appropriate metric to adjust pricing on a globalized basis. Anyway, the bottom line, yeah, donations do tend to be higher than average. Working rightwards, sir, and then Roxie, yeah. Yeah, any question? Based on your revenue, we're talking about your technical teams and your other teams. Privacy teams, your safety teams, you have to volunteer, you have to volunteer contingent, kind of running the company in a semi, let you open a source model where other people from outside the company contribute because clearly you can't pay to everybody who's working here. That's a great question. So a capture thing is a really unusual organization in a lot of ways. One of the ways is we have approximately, I think we have six or seven full-time employees, paid staff. We have about 1,500 volunteers who obviously do the vast majority of the actual work. And to do the developing for you and things. Everything. Everything. We have volunteer programmers, we have volunteer customer service reps. We deal with a massive amount of customer service inquiries and challenges. We have an entire PR team. No one on the PR team gets paid. The safety team, there's only one paid person on the safety team, you know. So a customer service is really a volunteer run and volunteer driven organization. And we're grateful, you know, because our volunteers make it all possible without them we couldn't exist the way we do. Now what's interesting is the process of managing and motivating 1,500 volunteers on a global basis. Because in effect we have many of the challenges of a multinational corporation without the resources that a multinational corporation has. And that exists on multiple levels. So classic players volunteers. Fanatics versus casualty. Yeah, yeah, well I mean, you know, so you're dealing with cultural issues, you're dealing with language issues, you're dealing with people not having time or saying they have time and then they don't, you know, basically all the volunteer issues that exist in any volunteer driven organization compounded by the multinational element. It's a challenge. But it's also, our relative success at it has also been what has enabled Capture a Thing to be as successful as it is. Because we have local feet on the ground in every city and town around the world. And we also have a class of volunteer called ambassadors, which Jonathan mentioned earlier, and they are people with special, you know, powers or, you know, special authority from the organization. And they are evangelists for the community and the brand in every city around the world. It is interesting to compare Wikipedia, which some would draw rough analogy to in the sense of people passionate about a project that has as its fuel good faith. Early on divided itself into different language versions and the rules of Wikipedia vary by language version, as do the administration and the volunteers. And here you're going for, I guess, a less federated system, still more of an ideal of cal surfing that's the same in each place, even as it adjusts a little bit locally like in the costs and such. And I don't know, Mako, if it's fair to call on you, Benjamin Mako Hill, who's been deeply involved in free software movement and politics and organization. I don't know, as you hear Dan's description, what sparks it sets off in your mind about how it might or might not compare to free software architectures and projects. I know you weren't prepared to be pulled off, but I'm sure you'll rise to the occasion. Yeah, well, I mean, I think it raises, I mean, there's a lot of interesting elements, especially when it comes to issues of sort of volunteer management and questions of the nature of your organization and sort of like paid labor and how you're going to make sort of paid labor and volunteer work. So, I mean, I guess the questions in my mind are particularly on sort of how you do that. I mean, like when you, it sounds like you have resources and one thing that I found in a lot of free software projects and a lot of free software projects I found is it's often easier to get money in terms of, even if it's just a matter of letting people go there, then it is finding necessarily ways to pay. Some of the people can introduce problems and people become, that's what's made of paid wire, die and how do you sort of balance that and maybe I can respond to that. Yeah, no, you're completely right. I mean, money is a big issue. It's very sensitive and that we deal with that with our volunteers. So, one of the things that we have found a lot about my partner Casey is, thinks a lot about Maslow's hierarchy of needs and how can we meet the needs, the various needs of our volunteers. In order, in some ways, in order to avoid just throwing cash around, which, you know, meet some needs, but frankly, there are a lot of needs. You know, it can be very wealthy and not have your needs met. So, some of the things that we've done to try to address that is, couch surfing has two offices. One is stationary, we have headquarters in Berkeley, California and the other moves around the planet. It's a nomadic office and it's a live workspace. It's called a collective, no, there we go. It's a live workspace and it's very useful as a tool to help recruit volunteers because we do it in fun, exotic places. So, we have an office in Costa Rica right now. We have an office for six months in a village in Thailand and what we do is we recruit volunteers we want and then instead of paying them lots of cash, we say, look, we'll pay for your room board. You know, come live with us for free, do some work for couch surfing and have an adventure and a lot of people go for that. We've had really good experiences with that model. And Mika, would you recommend that at the top of the hierarchy there basically be a good, beneficent decision maker whose judgment is essentially unquestionable? So, I mean, that's an interesting question. I know that there are a few people who created other, basically other projects that look a lot like couch surfing but I don't know, they disagree about some of them and a lot of them actually do that, right? And this is something that's been an important, it's an important aspect of the free software community both in terms of, there have been a number of times when projects have forked or formed or something other often successfully, probably more often unsuccessful but certainly it's this idea of the threat of the fork as in this, you can have the part of the, you can have a beneficent dictator and it's a dictator but you also always have the opportunity the surfers can always go elsewhere. Right, and it's not gonna be a splinter community. So, I mean, I don't recall the names of these but I bookmark them when I saw them. So, first like, charge surfing splinter groups as far as I can tell, maybe you can talk a little bit about that and how that sort of impacts the nature of the organization. Are there rump couches? Rump couches. Rump couches. I don't know, centines. Right, yeah. No, you're right, so there have been, you know, we've worked with thousands of volunteers over the years every now and then and you get a group that whatever reason doesn't like the way we do things and in a couple cases, a group of them actually gone off and formed their own basically competitive couch surfing, which they think, you know, represents what the true ideals of hospitality sharing should be. None of them have gotten very far, especially those splinters. I mean, we do have other competitors, so to speak, but the splinters have never been very successful. And I don't know how easily or quickly you can do it but how might the ideals differ? What's an ideal that could differ so much it would be worth splintering? Yeah, well, so, you know, so one group of programmers felt very strongly that all of couch surfing's code should be open source. That's the one that I know. I don't know which one, I only have someone that may come to notice, yes. Do you know someone in the community? I mean, yeah, probably, it was at Book Park. The B-Walking people at Book Park did things, so someone's on the pedestal, so yeah, problem. Got it. That's right. Should we just go, cruise around the top? Roxy? Yeah, just moving from the operations side, which I think is fascinating to the user community itself. Just for you, you can pick whichever one has been most interesting. I know when you register for a profile there's an optional, what's your ethnicity box? And there's this great discussion that's like, go over here if you wanna talk about ethnicity and the real reason for keeping the box is to have conversations about ethnicity, right? But that said, it also is probably part of a challenge dealing with ethnicity and gender and language barriers and all these sorts of demographic things about the user community, so just wondering if you could talk a little about those challenges and the growth of that over time. Sure, no, you're right. I mean, the ethnicity question has fueled a lot of discussion, both internally with the management team and also internally among the member base, and they're like, well, why was my ethnicity matter? Am I different? Am I better? Or are we all human to see that kind of thing, right? So what we say is, first of all, character thing is about facilitating intercultural understanding and about enabling people to discover each other's differences and appreciate them, not disrespect them for but actually to respect them for those differences. So enabling people to provide their ethnicity enables them to signal how they self-identify. Or there's no requirements on the ethnicity field. It's not a drop-down menu. It's a text box. So some people are very creative. Some people will say, earthling or whatever, ape descendant, that kind of thing. So people can answer however they want. And if it leads to a discussion about ethnicity and what makes us all similar or different, then we encourage that. We welcome that kind of interaction because we feel like discussions like that ultimately bring people closer together, which is what captures all that. Do you have advice on this front, Roxie? No, I guess I'm interested in a slightly different in the actual growth of the user community and when, I mean, we've been kind of like, oh, and it's a bigger problem for women to show up in other countries and travel. Okay, what's that about? And how is, I mean, you guys now are an institution and how have you seen presence of yourself as an institution influence thought about that? Or any of these other things about like, oh, well this kind of people in this kind of country don't stay with them. Maybe that's changed over time. I'm sorry, are you asking that? I'm wondering, if you've seen as a result of a couch sort of thing existing, fostering these relationships, having this very positive idealistic vision, like how do you have indicators on how you've influenced those relationships over time? Sure, so one of the really interesting things in the non-profit social enterprise world, one of the challenges is always effective benchmarking and tracking success. In the for-profit world, you can track it on an array of financial metrics. In the non-profit world, you're dealing with a third balance sheet or other ways to look at things. So it's actually one of the areas we want to do a better job of going forward. We actually want to be able to do more quantization of the progress we've had and the impact that we've had and understand the details of how it all works better. So that's a good thing. Let's talk. Okay, the very patient gentleman in the back. Yes, it's $25 minimum to get a fire plan. As far as if you knew the most generous donation that has ever been given by a single person? Did you track that kind of thing? I haven't looked at numbers like that in a while. I mean, I think it's, I don't know, maybe $500 or something? Okay. Roughly? And one other thing, when you were showing the revenue, you said both the outside merchandise is only at $680 or something. So I bought one of the t-shirts. So you told me I own one of the only 30 t-shirts. That's what I'm saying. That's what I'm saying. That's what I'm saying. It makes you feel special, doesn't it? That's what I'm saying. Are you suggesting that he needs an audit to his numbers? I can't tell which. OK, t-shirts. Well, if you had said you had bought more than 30 t-shirts, then that would be concerning. No, so actually, we've just been talking about that recently. We're actually going to do an overhaul of the e-commerce presence and update some of the merchandise and make it better. Bottom line, I think you're right. I think you own one of the two t-shirts, which is awesome. And please tell your friends and have them buy more. But we actually don't get any, we don't have that stuff at cost right now. We don't get any margin for those sales. So we've been thinking more about our e-commerce strategy and looking at, you know, selectively doing some strategic pricing things to drive sales of some goods and less so of others. But you know, use it as a profit center overall. But overall, yeah, I mean, sales and merchandise are pretty low today. How intrigued are you by the mobile space, the idea that I could just be wandering around Paris and just say, boom, show me couch surfers within 50 yards of me. I'm just at this bar. I would like to chat with somebody. Yeah, I like the mobile space. We haven't done anything with it. Again, due to lack of resources, we've actually been approached by a couple of iPhone developers who have said, hey, do you want me to do it an iPhone app? And we're like, sure, go for it. But we don't really have anything good quite yet. But yeah, that'd be great. I mean, there's a lot of, huh? The other thing is, you know, if you arrive late at a, you know, your plane gets over a train or whatever, you arrive at 11 PM at a train station in Frankfurt. You know, you don't know anyone. You don't have access to a laptop or a network or whatever. You know, if you can punch in someone and say, I need an emergency couch because I'm here at this train station, I mean, that's a useful thing. So we like to have that. That's like the bat signal. The couch signal, I was like, yeah. To expand the functionality, the term was for the house swap. Well, in the earlier term, it's general vacation exchange. And there, in advance, you can check with other people listed. And there were subgroups. And that was part of the teacher's subgroups, et cetera. And the other one is about use of schools. So there's lessons to be learned in terms of allowing for both ends. The mobile thing is like more of a media thing. And actually, there's a mix. Because when I went just by traveling, I would check with who was open for, not just swapping. It wasn't swapping. It was, if they were there in town, they might have a couch. So this has been going on for a while. And then usually, they would meet with a trusted friend, you know, person who's in a cafe. And they would use, you know, that power or whatever. And no, whether or not they're trustworthy, but they previously have checked. And that leads me to the school possibility. Has anybody allowed for the less volatile or, well, having basically the lounge couches in schools, you know what I mean, having a student have this halfway thing. And sometimes schools allow for a very small amount of dollars. But you have to be, you're only there for the sleeping time. And then you're there for the social time. So is there any of that? The third thing has to do with security, which is pretty important, pretty recent. Like, last week in Harvard, excuse me, Harvard lists the brick-and-less set up, but it was at MIT. The next big thing, now that bankrupt is harder, is credit card fraud. And then it's going to be fast. And the number of hours is only 12 for this quarter of last week, in terms of what action you can take. And yeah, a lot of people check their email, like, a lot of times when they're paying for this auto test and that sort of whatever in case there's unusual activity. But if it's only a $30 spread across a million customers, which you know, machines can do, that is definitely the next mushrooming and very, very looming target. So having, relying on your credit cards as verification can you expand that, perhaps to look for a little bit more variety, like the affiliation, like the additional level. Level 10 on the scale. Oh, school or work a couple of few years before you end up making this master's degree. Thank you. We've got it. Over to you. So regarding school, I mean, ultimately, Couchsurfing's mission is to connect people and facilitate intercultural understanding and so on. So there is the possibility to target exchange programs, student exchanges like that. But we target 18 and up for the most part. So that would probably be a huge college gap. So we're open to working with schools. We haven't done any special outreach to them or have involved infrastructure around that. Credit card fraud is always a problem. Unfortunately, we're mostly shielded from some of that based on our credit card processing systems. And hopefully, we won't get too much there. Now, of course, when you think about the legal interface to this, it's one of these phenomena that's so difficult to classify. You were telling me before we started that you can't even get your 501C3 status ironed out as a federal US nonprofit because the IRS just, you're not a church. You're not a cult. You're not a scientific society, et cetera, et cetera. We might be a cult, actually. We might be a cult. That can help you, it turns out. But where was I going with all that? Oh, so it's easy for phenomena like this to kind of fly below the radar. You're like the Segway, where they just don't know if you're on the sidewalk or on what do you do. But there could be some tipping point where you could see the attorney's general worrying about some of the safety issues or kids or you could see someone through the civil tort system threatening or saying, hey, I had a bad experience and I want some of your balance sheet. Have you encountered any of that? And I guess for those among us who are law students or legal academics, it's worth thinking about how some of the intermediary liability structures and cases we know of would treat a phenomenon like this. And I think without having to send a bill, the answer is unclear. Even after sending the bill, the answer would be unclear. Yeah, actually, that reminds me. Couchsurfing needs volunteer lawyers and legal assistance in general. So even if you haven't passed the bar, but you can have prepared materials that our lawyer could sign off on, he would love to hear from you. IP patent, trademark. Well, right now, legal education kind of is in stealth mode. People write essay answers and exams, but it goes nowhere. It's just sort of like your stealth account. So actually having it matter could be a good appeal. And so I first used couchsurfing when visiting expensive countries. So I purely had a financial need, right? Like I couldn't afford a hotel room, and I hate sleeping in dormitories in Austin's. And this Christmas when visiting Malaysia, I used couchsurfing for the first time I've been in a cheaper country, where I kind of bought a hotel room. And in that case, I didn't sleep on the person's couch, but I actually just went out and had dinner with them. And it was a really, really awesome experience. But I'm not out there that there was an entire couchsurfing community where people don't accept people from other countries to sleep on their sofas, but really like the couch surfers in Baltimore, they get together every month or two and have beer and chat over dinner. And I'm wondering if you can talk about sort of the growth of this as just purely like a way for people to find other like-minded individuals. Well, this gets back to the broader definition. Who live in their town, right? It's just another form of a meetup group. So couchsurfing has transformed into a thriving social community, even to some extent independent of actual travel. In New York, they have a weekly meeting of New York couchsurfers that attracts, I've heard approximately 80 people every single week. And it's not about travel, it's just hanging out, having beers and meeting other, as you say, like-minded people. So yeah, I mean, there are, thriving social community everywhere. We had a party a couple weeks ago in San Francisco, celebrating a million members. We had about 300 people show up. So yeah, it definitely goes from online to offline. And it's kind of an interesting phenomenon where you don't know that your identity is that of a couchsurfer until you've done it. It's not an independent identity so much. So until you buy a t-shirt? Yeah, until you buy the t-shirt, yeah. Actually, couchsurfing, you know, is every Wednesday night in Boston, too. Yeah, it's a good thing. What's the night? Where is it? I'm not sure I can make it. It's at the USA Cafe on Newbury Street. Elijah will visit. He's the first couchsurfer, will you think about it? I'd love to go. It's a Jewish holiday to my Passover. I would come otherwise. But it does feel like it's one of these things where just as the Obama campaign, much to its advantage, got people to use their cell phones during the rally to dial the number of one person and make that pitch. And once you've done it, suddenly, now you are part of the campaign, it's easier to make the next 15. Here I imagine once you've done that first experience and get the good feedback, you're like, hey, I am a couchsurfer. I'm gonna go to the meetup, et cetera, et cetera. Robin? This question of how to keep like-minded people together as you grow, it is an interesting question. And what are, how in the heck are you doing that? So the way I see it is one of couchsurfing's greatest assets is our volunteer network of roughly 1,500 ambassadors around the world. These are people who have actually applied to work for free for couchsurfing. They are hardcore evangelists of how they really believe in the institution. So I see it, I believe that they have a very important role in evangelizing locally and recruiting the right people and kind of keeping the wrong people out. So I mean, you know, they're always, it's always possible to sign- So once you got to the website, whichever way you got there, how, is there any formal mechanism? Or it's just like, these aren't people I've used- The couchsurfing oath or quiz? I'm just thinking of Craigslist, that was the initial idea, and now of course, murderers are on Craigslist. But you know, how, I just wanted to, if you had come up with a scheme, I hadn't perceived to- No, I mean, you know, what's tempting is to put everyone through a training course. And then sign here. Yeah, and we're doing that with ambassadors. But with ordinary members, you know, we also have, again, of our 1,500 volunteers, everyone, hopefully everyone here who's a couchsurfer, received a welcome email. Did you guys receive a welcome email from someone? Okay, so- You have to fill out your profile form. Okay, okay. So yeah, so the idea is that everyone gets a welcome email that is supposed to kind of set the tone for the culture. And you can always disregard it. You know, you can always say, you know, I know that's how it is and I don't care. I'm just gonna use the system for my own good and- Do you have- Is there any- What's that? Do you have- Do you have- Is there any mechanism by which people un-become a couchsurfer? You can delete your own account, yeah. And but, think of all the things I sign up for online. You sign up for it and then it's there to continue. So I do think you're doing a fabulous job. We've got a million members, but what percent of that membership do you think it's still happy and eager to be a couchsurfer or what is for us? So we've run periodic kind of customer surveys, which have come back overwhelmingly positive. If you consider something like a net promoter score, we score very well on that. Of course there are- Is it not a response? Yeah, no, but I mean, we can also track that, right? I mean, we had a survey pop up as soon as someone logs in with just like three or four questions. So yeah. So one question would be the degree of churn. How many people you lose on the one end as you're getting people- Yeah, I mean, we have a, I don't know the numbers off the hand but a large percent of our members are active members by our definition. Over half. Logged in within the last three months. And I suppose too, a crucial part of the strategy could be keeping it low profile and low key, not advertising, not drawing people in until they discover it. Yeah, well it's an interesting balance because on the one hand, if we want to grow, we want more people because that enables us to achieve our mission of facilitating intercultural understanding and relationships and so on. On the other hand, we don't want to grow too much, especially if it's the wrong kind of people. So it's not bodies for the sake of bodies, it's, you know, it's right in my good bodies. Just say it, Rossi. Just scroll it so I can see ages. Oh, you just wanted to see ages. I couldn't tell up, yeah, something. No, you have to scroll to the side. Oh, to the right, that's why you kept- Too weird. Sorry, that's- Everybody was leaning that way. What's going on? So how are we on time, MR? We have to go because there's classes shifting around. So there's some class surfing about to happen. So this has been a fabulous hour. It's such a just amazing phenomenon, a really interesting one, one that no doubt will face a share of challenges precisely because of its success, including some of the cultural issues that are in flux right now that have occupied us for the last few minutes of conversation. Certainly, if I were your parents and hearing this and knowing who says I'd be beaming in the corner of the- Oh, wait a minute, there are your parents beaming in the corner of the room. But we're so pleased you had a chance to stop in and chat with us and really share this with us. We are proud of you too. Thank you very much.