18 Months into Our 2nd Journey to Unlock the Power of Community
We’re now 3 years into the journey to unlock the hidden power of community. We learned a lot in our first attempt (Oh Hey World) and, after a year grinding through concepts (some of that time on the verge of depression) looking for a product iteration that could grow without throwing $100 million at it, have now been working on our 2nd attempt for well over a year (Horizon — Couchsurfing/AirBnB with friends, friends of friends, and communities you belong to).
It hasn’t been easy. Of course, few startups are. After speaking to some large membership associations and receiving enough validation that we should embark on building an entirely new product — Will designed the first screens of what is now Horizon in late 2013. But we had no developer. Spring of 2014 (March & April), we tried outsourcing development to a firm in Russia. After 2 months, we had to fire the firm primarily because we had no confidence or visibility into the development cycle. We found the right connection to an instructor at Code Fellows (John Clem), and he pitched our private couchsurfing concept to the class as a real world product to work on for their final team project — four engineers ended up working on a prototype that resided entirely on the phone (no server side component). Once the class was over, development slowed as all the engineers started looking for full time jobs.
In May we received notice we were accepted into Start-Up Chile, and a few weeks later received a call from our tech co-founder for Oh Hey World, Eric Roland, and learned his year long consulting project had gotten de-funded. Timing was great, we had (a little bit) of money and a proven engineer to get the app to market. Will and I flew down to Santiago, and Eric began development with the help of a rails engineer, Sam Philip, whom we found from the Start-Up Chile network. The iOS version had to be largely re-written since it was built without a server side. A few months later, no surprise, we ran into a few tech hurdles when we realized we had automatically been switched to Facebook graph 2.0 as a result of upgrading our Facebook SDK — causing us to re-write our entire backend. Though it was incredibly painful at the time, I believe that process will turn out to be a blessing in disguise.
Business wise, we began hosting people at our own Santiago apartment, and secured our 1st paid customer. And our 2nd. Then our 3rd. The #travelbygiving concept worked, in a very non scaleable fashion.
Oren Borovitch visited La Mesa Verde in August, and 3 months later following the completion of a 6 month trip with his wife, was back in Santiago living with Will and I (in the maids quarter). A couple months later, we made him a co-founder.
Come November, we ran out of money and Eric had to start doing consulting work. By January, we still had no funding and he eventually ended up taking a full time job in Louisville. We were back to looking for a CTO, and Will stepped in to the role temporarily.
After 6 months in development, we released our beta on Product Hunt in late January, and received some great validation in the form of 375+ upvotes and numerous comments (as well as inquires from numerous community managers who wanted private groups setup). Our first known (non manual) facilitated stay post release followed shortly thereafter.
We came across two fantastic engineers in the Seattle area — David Ametsitsi and Jeff Jacka — who have joined the team based on their passion for our mission of enabling travel opportunities by bringing transparency to community. I’m truthfully not sure where we’d be without their help.
In March, after roughly a year in legwork, we finally released Horizon on the AppStore (download the Horizon iOS app here).
We recently released Version 1.5 of our iOS app with two major improvements — a redesigned interface to browse and search cities and countries and in-app messaging.
What We’ve Learned
What have we learned in our 6 months on the app store reaching nearly 4,000 people across more than 100 countries?
Demand side —If there is a less expensive way to travel the world than AirBnB or hostels while simultaneously providing a more cultural experience — people will no doubt do it. There is virtually unlimited demand among the 200 million millenials who travel every year for free or cheap places to stay. Many millenials — myself included — WILL get on a plane anywhere if they know a free place to stay awaits them upon arrival.
Supply side — Are there enough hosts to fulfill that massive demand for a less expensive means to travel? That’s a legitimate question. The reality of the situation is that while virtually everyone in the world will host others, they will only do so if they are asked to do so by someone in their trusted network. There is no “problem” for hosts — they are not pounding down anyone’s door to host more people (with zero financial incentive). That said, some early Couchsurfing hosts are legitimately seeking to host more people, but that’s certainly not the norm.
Android — We get asked for an Android version of Horizon on a daily basis. We have a basic web version, but to get to critical mass within any specific community (such as Peace Corps of Sigma Phi Epsilon), we have to deliver a fully functional product offering across both iOS and Android.
Donations — We’ve proved the donation model is viable, at small scale. When the host is highly passionate about a specific cause/organization (such as I am about Kiva), someone stays in their home, they can tell a personal story about why that organization is important to them, and ask for a donation (enough times), guests will usually donate. There are lots of things that need to take place for that transaction to happen. It’s my belief donating needs to be insanely convenient before a real uptick in contributions will be seen. You need to organize a stay with someone (via Horizon), stay at their home, and receive a notification upon departure that asks you to make some small donation before you can utilize the app again. Our product doesn’t do that, yet.
(Lack of) Analytics — We really have no way to know how many stays are actually occurring. We know people are trying to contact others for stays based on constant clicks on the “contact” button, but we don’t know if they are succeeding since prior to version 1.5 our app, we were directing people to converse via email (which of course is a black box of analytics). Since both people need version 1.5+ in order to message back and forth inside the app, we’re now focused on getting those with old iOS versions to upgrade to our latest version. We’re also starting to contact specific travelers we know are trying to contact others for an upcoming stay to dig into whether or not they are succeeding — and why or why not.
Distribution/Growth — We’ll pass 4,000 users this week. Everyday we look at our user database, and have no idea how new users found us — meaning word of mouth is clearly occurring on a daily basis. This is a deep contrast from our 1st product, Oh Hey World, which never saw organic growth outside of our own network of friends and travel bloggers / digital nomads (and even that was slow). Stories such as this have given us exposure to many early Couchsurfing community members.
In Summary
Horizon absolutely needs to exist in the world. What we facilitate — hospitality exchange among existing trusted contacts — happens at insane scale already and would happen even more frequently if it weren’t such a fragmented market. TripAdvisor reports 27% of all trips are friends and family stays. I’d venture a guess the actual number is closer to 45% if you factor in all the weekend trips that are completely untraceable right now. That’s more than a billion trips a year without breaking a sweat. It’s still my firm belief that making “community” more accessible everywhere is the best way to actually move the needle and get more people to see the world with their own eyes rather than through a screen.
We’ve spoken to several investors, and there is interest IF either viral growth is proved OR revenue is generated. How do we generate revenue from an interaction without any associated financial transaction? The revenue model we’ve been testing — taking a percentage of total donations in a hospitality exchange context — is not proven (at scale). Sure, house gifts are part of most stays and money is spent — but will people replace that with a donation, or make a donation in addition to a house gift? Every investor we’ve spoken to believes Horizon should exist in the world — but that’s different than a belief Horizon (as its positioned today) will generate 10 or 20x their money. While I firmly believe Couchsurfing is one of the greatest movements to have been created in the past 20 years, from a pure investment perspective, it’s far from a success. That fact has hurt us in our talks with investors even though the larger opportunity of organizing every existing community by location is a far larger and different opportunity than building a standalone hospitality exchange network to compete with Couchsurfing.
We know that, in order to grow faster, there needs to be stronger incentives on the host side of the market. The two most likely use cases are sublets, and helping people uncover the friends/family discount on any vacation rental listing owned by someone in their trusted network (or places they or their friends have stayed before).
Going Forward
We’re incredibly fortunate to have a deep social mission that needs to be addressed for the betterment of the world, which means we’ve been able to make development progress even without deep pockets. That said, with everyone having to work on other projects to paying living expenses, development cycles are slow.
Do you believe in our mission, and want to help move Horizon forward? We’re looking for the right rails developer to join the team and help build the best community building tool that’s ever existed.
PS: If you’ve made it all the way here, you may as well go the next step and actually install the iOS app :)
