Francis Davidson - Design-led Hospitality

**Patrick O'Shaughnessy** (0:00)
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**SPEAKER_2** (1:41)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management.
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**Patrick O'Shaughnessy** (2:07)
My guest today is Francis Davidson, founder and CEO of the hospitality brand Sonder. Francis launched Sonder in 2013 as an alternative to traditional hotels and rentals with a specific focus on technology and design.
During our conversation, we discuss where Sonder fits into the hospitality ecosystem and why design is so key to their offering. We also touch on Francis' unique views around customer centric focus, the nuances of hiring a team, and how they approach decision making. Please enjoy my conversation with Francis Davidson.
So Francis, I think we'll begin the conversation with some overall philosophical thoughts on business. I love this first question. What do you think about the idea that everyone has to deliver the best possible customer experience? This seems like the most commonly accepted trope thanks to probably Jeff Bezos and a few others. What do you think about this idea that it's the obligation of a business to deliver the best possible customer experience?

**Francis Davidson** (3:01)
Love this topic. And I'm generally not a believer in absolutes.
Oftentimes the team will ask me to come up with, what's the most important company goal? Or what are the things that we're gonna prioritize?
So the way I see it is that there's obviously customer experience is valuable for it to be good, but not at all cost. So if we were to plot both the value on growth and customer experience, so there's very simple trade-off. Suppose that it cost me one unit of customer experience to get 10 units of growth. I'm getting a 10 to one return. The next day, I'm gonna do a decision that has 10 units of customer experience in exchange for one unit of growth. The sum of these vectors gives me a really nice advancement of nine points on both customer experience and growth. We'll forego the really great trade-off that they could have on other dimensions of the business that are equally valuable to be successful.

**Patrick O'Shaughnessy** (3:44)
Probably the right time to just at a high level, give the thumbnail sketch of what Sonder is and does. But maybe give me an example from your own experience of making a decision that actively went against customer experience as the North Star.

**Francis Davidson** (3:56)
Sonder is a modern hospitality company, beautifully designed spaces that we manage and run our own selves. So we've built quite a lot of technology that allows us to offer some hotels and apartments that look really great, especially to millennials in Gen Z.
And we build a lot of tech to basically manage those spaces far more effectively so that we can cut the fat in the industry and offer some really incredible guest experiences but at price points that are affordable. So, I mean, it's really a visual business as well. So going on our site and checking out some spaces brings it to life more than how I can explain it.