153469 Master Thesis Georgio
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Master thesis in MSc in Business Administration and Information Systems Georgios Lagoudakos Hand in date: 15-September-2016 Supervisor: Ioanna Constantiou Count (excl. Bibliography, Case Study Data Sources and Appendices): Pages: 78 Characters (with spaces): 181.824 The Evolution of a Sharing Economy Platform: A Case Study about CouchSurfing Contents Abstract ................................................................................................................................................................... 2 Introduction ............................................................................................................................................................ 3 Methodology ........................................................................................................................................................... 7 Research Philosophy ........................................................................................................................................... 8 Research Approach ............................................................................................................................................. 8 Research Strategy................................................................................................................................................ 9 Research Choices............................................................................................................................................... 10 Time Horizon ..................................................................................................................................................... 10 Data Collection and Data Analysis..................................................................................................................... 10 Literature Review .................................................................................................................................................. 24 The Sharing Economy concept .......................................................................................................................... 24 Multisided Platforms ......................................................................................................................................... 30 Research on CouchSurfing ................................................................................................................................ 37 Findings ................................................................................................................................................................. 43 The Case of CouchSurfing.................................................................................................................................. 43 Non-profit phase ............................................................................................................................................... 44 For-profit phase................................................................................................................................................. 46 Initial period - Communicating the change ................................................................................................... 46 Second period-Growing the organization ..................................................................................................... 50 Third period-Sustaining the business ............................................................................................................ 58 User Base ....................................................................................................................................................... 67 Discussion .............................................................................................................................................................. 68 Conclusion ............................................................................................................................................................. 76 Bibliography .......................................................................................................................................................... 79 Case Study Data Sources ....................................................................................................................................... 85 Appendices ............................................................................................................................................................ 92 Page 1 Abstract The thesis aims to explore the evolution of CouchSurfing (CS), a pioneer in the Sharing Economy, in the process of building a sustainable business model after its change of legal status to for-profit corporation. For this reason, the strategic decisions of the company, over the years, are examined by analyzing the company’s events through different sources of empirical data. An interpretation of the findings is conducted by making use of Platform Economics theories, therefore an understanding of the CS’s course and goals, since its incorporation, is created. The thesis examines the significant changes in operation and platform which have not yet been examined from a business perspective by scholars. Moreover, CouchSurfing is a unique and complex case for examination due to the fact that it was operating as non-profit for almost a decade and had already approached a significant number of users and built a community of dedicated members before its incorporation. Such members reacted negatively in several management decisions about organizational and platform issues. Basically, they organized protesting events against company’s decisions and this research aims to explore the reasons behind their dissatisfaction as well. Moreover, users’ opinion as it was expressed in CouchSurfing’s official Facebook page is analyzed by extracting users’ comments on company’s Facebook posts related to the examined events and by conducting a sentiment analysis. In this way, the creation of a holistic picture of the situation and the events surrounding CouchSurfing is implemented. The thesis’s findings indicate that CS had a turbulent evolution and faced several strategic challenges in the process of building a sustainable business model. However, the company addressed these challenges by shifting its strategic direction and implementing several changes in its operation and platform over the years. Even though dedicated members and volunteers from the non-profit era protested against company’s decisions several times, the thesis’s findings indicate that they didn’t affect the evolution of the company and the user base continued growing. CouchSurfing achieved to eliminate complaints after placing in an executive position a person close to the community and created new revenue streams after the release of entirely new and technologically advanced platform. Keywords: Sharing Economy, CouchSurfing (CS), Management, Strategic Decisions, Platform Economics, Users’ Reactions, Facebook, Sentiment Analysis Page 2 Introduction “Sharing Economy is getting very big, very fast”, the accountancy giant firm PWC claims, in its official report1 about the key sectors of the Sharing Economy2, which was published in 2015. Moreover, in that report it is stated that these sectors will potentially increase the global revenues from PWC’s estimation of 15 billion dollars for 2015 to 335 billion dollars in 2025. However, a lot of contradictory opinions are observed regarding the concept of the Sharing Economy, its definition, the companies that operate within its sectors and if it is referred only to peer-to-peer (P2P) transactions or covers business-to-business (B2B) and business-to- consumer (B2C) transactions, as well. For example, while Oxford Dictionaries defined, for the first time in 2015 (Botsman, 2015), the Sharing Economy as “an economic system in which assets or services are shared between private individuals, either for free or for a fee, typically by means of the internet"3, a Harvard Business Review at the same year (Eckhardt & Bardhi, 2015), questions the focus on “sharing”, and claims that this new economic system is rather about providing “access” to goods or services via simple rental models. Different terms, like “sharing” (Belk , 2007), “access-based consumption” (Bardhi & Eckhardt , 2012) and “collaborative consumption” (Botsman & Rogers, 2011), have been used to describe the practices in this new economic system. Regardless the contradictions about Sharing Economy and the definitional challenges which are mainly connected with the contested meaning of the word “sharing” according to Belk (2014a), the organizations that operate under this umbrella provide services through online platforms. Even though sharing activities were taking place for centuries (Belk, 2010), “Sharing Economy” is a recent phenomenon which became known in the Internet era (Belk, 2014a). To be more specific, such an organization creates value by enabling interactions between two or more different types of users and therefore is called a multi-sided platform (MSP) (Hagiu & Wright, 2015). Apart from Sharing Economy platforms, one can think as examples of MSPs, social network sites, like Facebook and Twitter which bring together users, advertisers and developers as well as e-commerce sites, like eBay and Amazon which connect buyers and sellers, to name few of the most well-known examples of MSPs. In other words, it is obvious that some of the most successful