Zoli's Blog

“Three year old CouchSurfing, a beloved service used by some 90,000 members, had multiple database crashes, critical parts of the software and data were irretrievably lost, and the backups weren’t performed properly. They are not rebuilding the service. They literally put themselves out of business.” – reports TechCrunch.

Mike says it’s ridiculous – I’ll go a step further: it’s BS.

Of course the negligent approach about backups in itself is a serious issue, and in that respect I encorage everyone to read Dharmesh Shah’s thoughtful piece on why he considers $2K a month for hosting of his pre-launch startup money well spent.

So why am I calling this BS? Dharmesh says:

“What was the issue? Not lack of user interest or running out of cash or strong competition or any of the usual reasons that startups die. It was because of a series of infrastructure problems.”

Yeah, right. I haven’t been a CouchSurf-er, nor do I know the business, but I am calling it a BS, because the infrastructure problems are just an excuse – they may have been the last drop for the entrepreneur already fed up running the business, but definitely not the cause. Everyone knows that the single most difficult part in building any sort of marketplace / community business that relies on network effect is exactly that – reaching critical mass. Heck, anyone can throw together the databases, programs, infrastructure if the hundreds of thousands of users are somehow guaranteed. But of course they are not. My point is: if you do have the loyal crowd and your buiness is otherwise in good shape, you can start from scratch, and rebuild everything, no matter how bad (total?) your data loss is.

That leaves us with the other single most critical part (yeah, I am cheating, there are two “single” most critical/difficult parts…): monetization. This is where I suspect CouchSurfing may have had trouble, which turned it into OuchSurfing – after all, who throws away an entirely profitable good business after a technical fiasco?

Interestingly enough, although Dharmesh devotes his article to the importance of proper infrastructure, if you read between the lines, there is a second message there: eyeballs are not enough, you need to convert them to revenue.

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