Breather, real estate, and the Innovator’s Dilemma

As a quick note, I’m going to be conducting a number of these interviews in the coming months. Some of them may find their way into a book as case studies. I’ve already got a few with executives at big companies. But most of them won’t be posted on the blog, and you’ll need to sign up for the mailing list to get them.

Breather logoEvery Innovator’s Dilemma is obvious in hindsight. A market that looked too small, too boring, or too weird for incumbents to tackle allowed an upstart to sneak in, growing at a rate that, left unchecked, disrupted the entire industry.

The problem with classic business-school examples of disruption is that they all happened in the past. Everyone knows Kodak should have stopped worrying about film, and started worrying about the Internet, because we all have a phone in our pocket. Everyone knows Dell should have built AWS. Everyone knows Blockbuster should be Netflix.

Because of this, I find examples of this happening today much more interesting. Here’s a good one.

Julien-talkingJulien Smith is a best-selling author, fellow Montrealer, and the founder of Breather, a provider of private spaces you can unlock with your phone. Think Uber for nomads.

It’s a fascinating time for the new startup, which is seeing dramatic growth in the two cities in which it’s been launched. But what’s┬ámost interesting is that this is a model none of the existing players aspire to.

  • Big real estate companies want multi-year leases, and market prestige to brand-name tenants. A theatre troupe or yoga enthusiast walking into a boardroom is Just Not Done.
  • A rental office company doesn’t want the hassle of by-the-hour contracts and the tenant diversity Breather aspires to.
  • A co-working space can’t provide the solitude, privacy, and experience, and rents desks, not experiences.

Breather is only possible because of several technological advances: pervasive mobile phones; the rise of transient knowledge workers; electronically controlled locks; and so on. The challenge for an intrapreneur at an existing player in the real estate industry, of course, is to know when these advances conspire to change the underlying business model fundamentals, thereby allowing disruptive innovation to take hold.

Julien and I talked for a half hour about where Breather is today, and the problems incumbents face in what is quite literally a brick-and-mortar business.

Listen on Soundcloud:

Watch on Vimeo:

Leave a Reply

Your email address will not be published. Required fields are marked *