Uncategorized

How Breather built a network of spaces and succeeded where so many startups fail

Justin Megahan

Supplying peace and quiet while solving the on-demand economy.

“Acquire users.” That’s the common wisdom for consumer-facing startups. The more users, the better. Not unexpectedly, many of these companies focus all of their energy on driving demand, and often it makes sense. Just look at the tech giants that have built their businesses on a foundation of millions and millions of users, often acquiring masses before they even knew what their businesses really was. And if you’re Facebook or LinkedIn, it makes sense. These companies aren’t worried about supply. What are they going to do, run out of LinkedIn?

(Ignore the dirty looks Ops folks are sending my way.)

In fact, because of demand-side economies of scale and the network effect, LinkedIn’s product actually gets better with more users.

But there’s a new breed of startups playing a different – and often lucrative – game. They deal in the on-demand economy, and connect our screens to real-world goods and services that bring dog-sitters, carwashes, and dinner ingredients to our doorstep.
But for many of these “Uber for Xs”, focusing solely on demand and acquiring users can spell doom. Their products are inherently more tangible, that’s the appeal. And that’s what makes it hard. Their product has actual unit counts, and it’s possible to run out. Often it needs to be delivered. Or it can be too far away. And the quality of the product can vary. It’s hard. Unlike pure software plays, which aren’t exactly easy, these startups face a problem non-tech companies know well: supply matters.

“We think more in terms of supply than we do in demand,” says, Julien Smith, Breather co-founder and CEO.

Breather is one of the more impossible-sounding startups cracking this supply side code to create traction and growth. And yet, despite the odds, they’re doing it, by using data and clear metrics to get quantitative answers to qualitative questions about why someone would use their product and then come back for more. Questions like, “What would you do for a little peace and quiet?”
"How Breather built a network of spaces and succeeded where so many startups fail"

Striking the right balance

Space is at a premium in San Francisco. You don’t get a lot of it to yourself. I live with a couple of roommates. And I work in one of those open offices that tech companies love. So I know how hard it can be sometimes to find some quiet to get a bit of work done. That’s a problem Breather is trying to solve.

Breather is a service for easily booking a quiet, comfortable space nearby. It’s not really Airbnb, though that’s a common comparison. Instead of bedrooms, the spaces are professional but welcoming, more like a well-designed meeting room than a soul-less conference room. And you book them on-demand, in half hour increments.

But, it’s actually more like Uber, since the app surfaces all nearby Breather locations. When I look from my desk, I can see a handful of spaces in a half-mile radius, starting at $25 an hour, that are available, or will be shortly. Except, unlike that Prius you are matched with on Uber, Breather spaces can’t drive to you. So, among the many questions Breather has had to figure out in their journey over the last two and a half years is just how far will someone walk for a little peace and quiet.

It’s a tricky question. If the nearest space is too far, it loses its on-demand appeal. Maybe I’ll book a few days ahead to have a nice quiet spot for a professional meeting, but if it’s a half hour walk away, I’m not going there on the spur of the moment.

To start with, Breather focused solely on hours booked per week, and they were maniacal about making that number go up, since it indicated that they were striking the right balance. Finding your key metric that balances supply and demand is critical for on-demand apps. Weekly Active Users is useful, but that only gives you one side of the equation.

Still, it’s a difficult needle to thread. You can just get a place to sit and work on your laptop at the closest coffee shop, so why bother with something like Breather? In fact, that’s where Julien came up with the concept behind the company.

“Why am I here?”

At the time, he was spending a lot of time traveling. Julien has written a few business books – one a New York Times Bestseller – and that requires touring and promoting.

“I was always traveling, and I kept finding myself in Starbucks. And sometimes that’s fine. Public spaces are great. And sometimes they are exactly what you need. But sometimes they aren’t. And when I don’t want to be around other people, I really hate being around other people,” Julien says.

“Why am I here?” he’d think in the ubiquitous Starbucks. It’s not the $3 coffee or the pre-made croissant sandwich. That’s just the price of admission. It’s for the space to sit down and get some work done. The table to put a laptop on. The wifi to connect to the internet.

The revelation stuck with him. To get what he and other non-9-to-5 workers were looking for, you could lose the baristas and the food and the drink. You could throw out the other people and shrink the place to a reasonably small size. When you strip it all away, you’re just looking for a comfortable and convenient space. And why is that you end up at a Starbucks when you’re meeting someone, or in a new city, or just looking for a place to sit down? Because, if you’re in a city, even if you don’t know where, you know there’s probably a Starbucks just around the corner.

And here we get back to the supply question and putting yourself and your app in a position to experiment with supply without breaking the bank.

Experimenting as cheaply as possible

That’s why Breather started in Montreal.

“The smaller the city you can succeed in, the more potential your idea has.”

There’s something to be said about making it work in a city that isn’t San Francisco, where half the population isn’t in constant search of the next startup, the next app, the next new thing. When a service like Cherry, aka “Uber for Carwashes,” starts making some noise in SF, it’s not unreasonable to wonder how it could possibly exist elsewhere. (The answer, not surprisingly, was that it couldn’t.)

But Montreal gave Breather the chance to find its footing outside of the tech bubble. And, more importantly, it gave Breather the opportunity to experiment. Spaces are costly. At a time when both the rush of “space startups” and Uber for Xs were struggling to make their models work, Breather was trying to do both. If you think delivering a carwash to someone is expensive, try real estate. However, relative to a place like San Francisco or New York, real estate in Montreal is cheap, while the city is still densely populated enough to make Breather’s basic premise workable (and walkable).

“You want to be experimenting as cheaply as possible. Not having to spend a bunch of it on security deposits in New York City was super helpful. That facilitated everything.”
"The smaller the city you can succeed in, the more potential your idea has."

The local network effect

Experimenting in Montreal helped Breather learn that the gravity of a single Breather unit is very powerful at a low radius. Meaning, if I open the Breather app and a space is close by, say a two to three blocks away, it has a strong pull, and I’m likely to book. But outside of that radius, the pull is weak. There is a tipping point when it comes to how far away the space is where it starts making sense. Learning this lesson in Montreal payed off greatly when Breather put it to larger use in their expansion to New York City, Boston, and San Francisco.

If a service is trying to launch in a the city, it might just spread out across all neighborhoods. But Breather didn’t look to span the entire city. They created a strong local network in a specific locale.

“If a location is x distance from any other location, we know it’s a much higher failure rate for that unit.”

Breather is tasked with creating a strong local supply network with physical, fixed properties. Their spaces need to be close enough to maintain the overall collective pull, like Uber or Starbucks have, but far enough to serve an audience large enough to support the supply of units. There is push and pull, and that is how you build out a network.

Consistency of experiences

“Ideally when you open the app, there is a space within a walkable distance in one direction,” Julien explains. “But if that’s booked, there should be another available an equal distance in the other direction. When the spaces are comparable, it doesn’t matter which one you go to.”

That last part is an important aspect of building the network of Breather spaces. While Airbnb looks to offer a variety of unique spaces. Breather needs consistency. The rooms differ slightly, but they should feel the same. In the same way every Starbucks feels like a Starbucks. The benefit of this? It takes out a variable in the supply equation, making the user’s decision of where to go simple–which available Breather is closest? Using a focus on supply and consistent user experiences to reduce cognitive load is a really effective way to entice someone to try something novel.
"The smaller the city you can succeed in, the more potential your idea has."

For example, the Breather space I spent an hour in for this article was well-lit and open. In front of the couch was a coffee table with a large bowl of tootsie rolls in the center. Sun streamed in through the large window, drenching a table and white board. A hip bookrack offers reading material: Humans of New York, Divel, A Short Guide to a Happy Life, and something called Denim Dudes. In the corner, rolled up and in a bin, is a yoga mat.

“A lot of thought has gone into these spaces,” Julien tells me. “They’re staged. They look like they are out of a magazine.”

He’s right, it does. It just feels peaceful. And when I open the app and look at the space down the block, it does too. As does the one a couple blocks over on Bush. There’s a consistency to the Breather spaces, and that builds trust in the user. There’s no surprises. And when you know exactly what to expect, it makes the decision to book a Breather easier.

Learning and scaling

Breather is just one of the many startups venturing from the vacuum of software out into the real world. A venture that is equally promising and frightening. Asking supply questions about a product are difficult.

But by finding quantitative answers to qualitative questions, like what a person is willing to do for a little peace and quiet, Breather better understood where to position their product. Something that is much higher states when you’re dealing a with a real world product. And even higher states when that product is real estate.

And by maintaining a consistent feel and quality in their spaces, Breather users knew what to expect from a booking. When units become interchangeable, the network becomes even stronger.

This is how Breather was able to build a strong network of spaces in cities like Montreal, New York City, Boston, San Francisco, and Ottawa. And in the upcoming months they’ll be expanding to London, Los Angeles, Chicago, DC, and Toronto, scaling up their supply and perhaps bringing a little peace and quiet to your city block.
"How Breather built a network of spaces and succeeded where so many startups fail"

Get the latest from Mixpanel
This field is required.