Redesign to a For-Profit Organization: Couchsurfing Company Case Study

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Introduction

The Couchsurfing website is known all over the world today because it helps people to travel around the planet and meet many local citizens who host their tourists and show them realia of different places. However, not many travelers know the history of this startup and the tremendous problems its creators faced at the beginning. The following paper will present a case study that will help the Couchsurfing Company to solve its most important problem.

Problem Definition

The most important problem facing the Couchsurfing Company implies their general redesign to a for-profit organization. The audience did not like the given change because the website followed a certain social idea that allowed travelers from every part of the planet to spend several nights at homes of the service’s foreign users (Couchsurfing). The problem is still actual for all the clients of the corporation because now they are required to cover some necessary payments to receive all the benefits of the platform. The discussed issue is important to solve because the primary mission of the company’s creators was to help people save their finances when they travel and to meet interesting individuals abroad.

Analysis of the Problem

The primary problem of the Couchsurfing website was its developers’ decision to become a for-profit organization, whereas their initial idea was to remain a non-profit website. However, this strategy did not work for them because the service was growing rapidly, and hence they had to make investments in its maintenance, elaborations on the code, salaries to newly hired engineers, and so on (Mikhalkina and Cabantous 63).

As the number of users reached the point of 3 million, the company could not support the platform using only donations from minor people. To support the interpretation of the problem and the story of the business, it is necessary to mention that any person can access multiple interviews of the company’s founders on relevant sources (newspapers, magazines, websites, and so on). Usually, the contributors to the creation of the platform tell that they faced the given problem and the impact it made on users at the beginning.

The issue does not seem to be connected with other areas of the Couchsurfing Company as providing contacts of people who host travelers abroad is the only service given by the platform. Nevertheless, the issue can be considered connected with other businesses as the founders had to receive $15 million in investments from such corporations as Benchmark, Milo Ventures, and several others. It is necessary to state that the organization does not focus on earning money even today. Instead, its employees understand the idea they work for and promote. Therefore, users are not forced but highly recommended to pay for the program so that they could have more options regarding the use of the Couchsurfing website.

Recommendations

The Couchsurfing Company is suggested to remain a for-profit organization (Mikhalkina and Cabantous 68). Although this course of action does not meet the desires of the service’s founders, they have to earn money to support the enormous number of active users. However, to follow the main vision of the company (to be free of charges and help tourists rove the world with the help of hostile people in every part of the planet), it would be necessary to reconsider the structure of payments. For instance, make the use of the platform free for any person, but offer additional services and benefits to those who pay a set price monthly or annually.

The action plan suggested in the previous sentence will eliminate the problem by giving people high-quality services for free, whereas tourists who use the website more than twenty times a year will be recommended to purchase additional features of the program that can include various tips or advantages regarding the use of the site (Mikhalkina and Cabantous 68).

The solution to include unnecessary payments follows from the problem analysis by offering a sound practice that will maintain the initial idea of the service to be free of charges and will provide financial means to cover all the necessary expenses related to computer engineering and appropriate functioning of the Couchsurfing website (Mikhalkina and Cabantous 62). To implement the solution, it is necessary to include payment offers for different periods (with varying prices depending on the period chosen). The realization of the plan will cost approximately $50 thousand, but is expected to buy itself within the next week (considering the number of clients) (Kumar et al. 4).

Also, it can be claimed feasible because many firms already use the discussed method. Its implementation will be financed by the Couchsurfing financial department (the required sum is not large). The only aspect that can go wrong implies users’ reactions to the new changes and the fact that they will have to pay for features they could access for free earlier (Mikhalkina and Cabantous 63). The risks of the plan include dissatisfaction of clients and the lack of people who might agree to pay for additional options on the site. All competitors are likely to react positively because monthly or annual payments are offered almost by any successful service.

Conclusion

The company called Couchsurfing was initially aimed at being a non-profit organization. However, its creators were obliged to receive investments and include payments in their platform as they had to support their business. This problem can be solved by the appropriate organization of monthly or annual payments, where people can choose to work with the free version or buy additional features. This strategy is used by many online services. Therefore, the audience might be dissatisfied at first but will understand and accept such circumstances in the end.

Works Cited

Couchsurfing. “Our Story.” Couchsurfing, 2018. Web.

Kumar, V., et al. “A Strategic Framework for a Profitable Business Model in the Sharing Economy.” Industrial Marketing Management, vol. 1, no. 1, 2017, pp. 1–19.

Mikhalkina, Tatiana, and Laure Cabantous. “Business Model Innovation: How Iconic Business Models Emerge.” Advances in Strategic Management Business Models and Modelling, vol. 33, no. 1, 2015, pp. 59–95.

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IvyPanda. "Redesign to a For-Profit Organization: Couchsurfing Company." October 25, 2020. https://ivypanda.com/essays/couchsurfing-company-case-analysis/.

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