Francis Davidson is the founder and CEO of Sonder. We cover Francis’s unique views around customer-centric focus, the nuances of hiring a team, and how they approach decision-making at Sonder.
Principles & Lessons:
1) Balancing Growth, Customer Experience, and Unit Economics is Key. Francis advocates avoiding absolutes and instead weighting these three elements against each other, stating “I think it's a mistake to just think that customer experience is the ruler above all other business objectives.” He illustrates this with the example of a competitor that spent “$40,000 of their own capital per unit” to build the top-rated TripAdvisor property, whereas Sonder invests around “$10,000 per key,” because that more modest approach enables better returns and more expansion. This highlights his principle that sacrificing one part of the business to prioritize another is inefficient unless it produces a significant overall gain.
2) Cost-Efficient Innovation Helps Scale Faster. Sonder’s “modern hospitality” hinges on technology that replaces manual tasks, which Francis shows via the example of early check-in: “Over a third of all of our guests ask for an early check-in,” and at a traditional hotel, “the process…consumes quite a lot of time.” By automating such items (or removing services that are no longer in high demand, like room service), Sonder cuts labor costs and channels those savings into growth. Francis emphasizes that Sonder is “not a demand constrained organization,” meaning it can fill rooms once it controls expenses to compete on price and convenience.
3) Asset-Light Models Can Still Capture Significant Value. Sonder has reframed the hospitality business by separating property ownership from day-to-day operations. Francis explains, “We can generate cash flows that are similar to that of those who own the real estate,” yet “we don't own the underlying real estate.” With property owners footing furniture and renovation bills (“It costs us something like $10,000 per key”), Sonder focuses its capital on developing tech, brand, and operations. Francis notes that returns on these setups are “single digit months on a new property,” enabling rapid expansion.
4) Detailed Internal Processes and Decision-Making Systems Matter. Francis pays special attention to “how speaking and writing and reading occurs” within the organization, likening bad meeting structures to a hidden organizational tax. He explained that at Sonder, they use a memo system where each participant must share written comments before the meeting. “Every participant is going to write down their feedback…and then every person that's attending either will write down whether they agree or disagree.” This creates accountability and clarity while avoiding endless debate. By treating decision-making as a craft, he believes Sonder can react quickly and avoid cognitive biases.
5) Pragmatic Hiring Policies Trump the ‘All A-Players’ Myth. Although Francis admires aspects of Netflix’s philosophy on talent density, he is wary of dogmatism: “Sometimes you have…someone that's doing a fine job,” and it isn’t always worth huge time and disruption to replace them with a theoretical ‘A’ hire. He recognizes that “there's an inherent lack of focus in trying to have As absolutely everywhere,” though Cs are never acceptable. The team invests in thorough references—citing Reed Hastings’ advice that “references are super important” and should be done in back-channel form—and also offers reciprocal transparency by sharing 360 performance reviews to begin relationships on a basis of trust.
6) Design Must Be Excellent but Does Not Have to Break the Bank. Francis is puzzled by “why the hospitality industry keeps churning out these ugly hotels,” pointing out that good design can be achieved by simply caring and applying known principles. “I do believe that there's such a thing as better and worse objective when it comes to design,” he says, referencing movements like Bauhaus and mid-century modern. Sonder’s in-house guidelines specify everything down to shower pressure and fabrics for couches. As Francis puts it, “We wouldn’t want owners to…purchase what’s available” because good design is part of the brand and can be done affordably with the right focus.
7) Modern Service Must Address True Customer Wants Rather Than Legacy Standards. Francis points out that daily housekeeping is often a money-loser for hotels and rarely requested by modern travelers, explaining, “If people knew how much it cost to clean their room every day, they would opt out of it almost always.” Similarly, on-demand services like ride-share or food delivery can be better than old-fashioned taxi stands and room service. By embracing these changes, Sonder reduces outdated overhead and provides frictionless experiences. He sums up the goal as “really rethinking the cost structure…so that we can offer…almost luxurious experiences, but at price points that most consumers can afford.”
8) Embrace Adaptability to Unlock Emerging Trends. Francis describes how “revenue falls 75%” during the early pandemic triggered a swift pivot to extended stays: “We found folks that would stay in Sonder spaces for 14 days, 28 days plus…we were right back to where we were pre COVID in terms of occupancy rates.” This agility let them attract “digital nomads” and others who can work from anywhere. Francis sees more people opting to blend travel and work: “I think there's no better way to be a digital nomad than to stay at a Sonder property.” By staying open to new demand patterns, they seized an opportunity that might have been overlooked by traditional hotels.
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