On thinking at scale

Yesterday, a friend asked me what I thought of Breather,Julien Smith’s new startupthatrecently closed a $20M financing. I know Julien and his team, but I don’t know that much about Breather’s business metrics; I do know many of his investors aren’t idiots, and they’ve looked at the numbers, so it’s probably growing well.

Breather rents private spaces by the hour for meetings and work (Julien’s bio says he basically runs “a bunch of robots with doors.”) Breather focuses intensely on the customer experience, no surprise from the guy who wrote Trust Agents and Flinch.

When Julien and I first talked about the idea a couple of years ago, he explained that one of the big issues was that the room needs to be cleaned after every use. This is vital for a number of reasons: it flags problem users, identifies broken equipment, and ensures that the experience doesn’t degrade over time.

“How does that scale?” asked my friend. Because yes, it doesn’t sound very scalable. Cleaning costs eat into margins.

I replied by asking him about Uber. When Uber approves an UberX driver, they subject them to a lot of screening. More than most taxi services, in fact: it includes not only a criminal background check, but also a lifetime driving record review, local police check, interview, training materials, and even a mechanical inspection of the vehicle. To do this, they have employees in every city in which they operate.

That doesn’t sound like it scales either.

Or rather, it does, butit scales at scale. The economic cost of an Uber interviewer is high, when you think about it in terms of one driver. But a full-time employee interviewing dozens of drivers a week is pretty effective.

Similarly, the cost of a room cleaner for a single room is high. But if Breather has clusters of rooms all over a city, it can hire contract cleaning staff in that city, and automate where they go based on the scheduled room usage, maximizing their efficiency.

The key here is that humans, married to machines, can follow processes better. Their behaviour generates data, from which the organization can learn and optimize. And that becomes intellectual property, and sustainable competitive advantage.

One of the things I love about Julien is his sense of self. He doesn’t do things to stroke his ego; and he has the ability to think at scale. It’s a hallmark of great business thinkers. Things that look like obstacles to growth quickly become barriers to entry when your company gets big enough:Uber can certify drivers, and Breather can clean rooms, better than you can.