C$ and verifiedplus membership
Hey guys!
Have you been following any posts in your communities about the verifiedplus membership of CS Inc.?
how do you feel about it?
lyda :)
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Here is what i found regarding the new VerifiedPlus Membership and all the changes that are happening. Just to stay informed :)
"It's about profit. Specifically, it's about making back ALL the money that venture capital firms have put into CS and THEN taking out more profit. How much? Minimum US$22,600,000 because that's at least how much General Catalyst and other large VC firms have given CS in the past 2 years.
When a company takes in $22-million, it no longer owns itself. It has sold controlling interest to whoever provided that cash. Like any incorporated entity, CS is accountable to its Board, and after taking an investment like that, the Board will be composed of its investors: https://www.couchsurfing.org/n/team
As anyone can see, there's only one CS employee (Founder Tony) on the Board. I didn't bother to look further; the others are probably VCs. And the founder/s are probably okay with this. They didn't HAVE to take that money. They sought it and accepted it. They don't want to have to couch surf for their whole lives. They want to be able to stay at the Ritz Carlton.
So how is CS planning to bring in $25 million? They have over 5-million users (99% of whom don't care about CS as much as anyone reading this thread does--on either side of the argument). If CS can convince just 2.5% of those users per year(125,000) to pay US$96, they will monetize the site at 1/2 their VC investment EVERY year. What I'd be curious to know is what percentage of users have paid to verify. If it's less than 15% (and I bet it is), then they better have done an awful lot of customer analysis before banking on the proposed profit model. Well, actually, it's not the CS founder's problem, really. It's the investors' problem. Their money is on the line and the founder is now enjoying a great ride that he put a lot of hours into along the way...although if he did have some qualms about how it all plays out, he sure wouldn't be the first founder to end up feeling that way!
Anyway, there you have it. CS is no longer owned and steered by the people who founded and nurtured it, nor are its primary goals, with regard to its users, what they used to be. Old goal: cool product; engaged users. New goal: Monetization of engaged users; hopefully cool product. To their minds, they might feel that little has changed and they're delivering an even better service. To your mind, it might seem that the foundation has changed so radically that it's something entirely different. That's just how this business works. People don't spend $100,000+ on college tuition, then work 75-hours a week for several years founding and growing a business, just so they can KEEP "living" that way. They want material validation of their success and fruits of their labor. Early adopters like you almost always get hurt. And a lot of the time the whole thing tanks and almost everybody loses. These aren't my views; they're a factual analysis.
Here's the Board and employee listing: https://www.couchsurfing.org/n/team. Here's a link to their first $7.6 Million Series A: http://www.businesswire.com/news/home/20110825005488/en/CouchSurfing-Raises-7.6-Million-Series-Benchmark-Capital Here's a link to their $15 Million Series B: http://www.businesswire.com/news/home/20120822005334/en Here's their own page where they promote those investments: https://www.couchsurfing.org/n/press
I made a mistake in calling Tony Espinoza a founder. He's not. The actual founder, Dan Hoffer, stepped down as CEO and became President as part of the deal to take the investment money. That's a typical practice.
CS describes Tony in a press release (link is on CS Press page): "Having served as vice president at AOL and MTV Networks, and as chief executive of several consumer internet startups, Espinoza brings extensive experience in startup strategy and execution, including product design and development, operations, and world-class talent recruitment and development."
Note, nothing about travel, family-orientation, human relationships etc. etc. All business...because it's now about profit.
Board of Directors Tony Espinoza: CEO chosen by VC partners Casey Fenton: Co-founder Daniel Hoffer: Co-founder/President Matt Cohler: Venture capitalist, Benchmark Jonathan Teo: Venture capitalist, General Catalyst Todor Tashev (Observer): Venture capitalist, Omidyar
Who's NOT on the Board? 1) a natural user of the product; 2) a female; 3) a majority of non-venture capitalists. These three things ALWAYS add up to a Board that is about maximizing profits more than anything else (NB: it's NOT a feature of being men; it's a feature of groups of people who don't value intentional inclusion of Directors who reflect the customer base). If the product could be ok at $N profits, they will prefer that to the product being absolutely amazing at [$N x .99]. That's just how it is. "