Sonder | Hospitality Reimagined

Hi, everyone. Welcome to Gray Matter, the podcast from Greylock, where we share stories from company builders and business leaders. I'm Josh McFarland, a general partner at Greylock. Our guest today is Francis Davidson, who's the CEO and co founder of next generation hospitality company Sonder. Francis started Sonder in 2014 to revolutionize hospitality. The Sonder experience is powered by technology and world class design, providing better choice, comfort, reliability and value. They now operate in more than 35 markets across 10 countries around the world. More importantly, they built a business that has not only withstood the pandemic, which hit the travel industry probably harder than any other sector, but emerged even stronger. Today, Sonder's making its public market debut and trading under the ticker symbol Sond. At Greylock, we've been fortunate to know Francis and his team since 2017 when we invested in their Series B. Since then, I've watched the company make impressive maneuvers and difficult decisions, always with a clear vision towards adapting Sonder for our new reality. Today we're going to walk through the key decision making and product strategy that has enabled Sandra to get to where they are now. We'll also discuss the company's plans for the future. Francis, thank you so much for joining me today. Congratulations on your public market debut.

Thank you. Really thrilled to be here. Thanks so much.

So before we get into all the details of today's news and the incredibly wild past couple of years that have led up to where we are, can you just give us a quick sense of what Sonder is broadly and globally?

We are a tech enabled hospitality brand and that's a lot of words. It means something pretty simple, which is that we are offering a hospitality experience, meaning apartments and hotels that you can stay in across the world war, in 35 cities, across 10 countries that are really beautifully designed, like they look great aesthetically. Guests, particularly millennials, Gen Z, love to stay in them and we provide modern service. Modern service means that you can do everything you need on your phone. On the Sonder mobile app, you can have access to information like what's the WI fi password? Or you can request an early check in or late checkout and basically interact with our staff on your phone. We call that the lobby on your phone. And we've built really high quality and consistency in the experience. So even if you're getting a cool apartment in Dubai or you're staying at a hotel in Paris, you're getting really high quality and consistency time and time again through the technology that we've built and the processes that allow us to operate with really a high level of quality and customer satisfaction throughout. So this is really the business and it's evolved so much. Like what I just described is really far from where we were when we got started in Montreal, when I was back in college exploring how to rent an apartment to travelers during the summer because I couldn't find a subletter and then realized a bunch of other kids were in a similar situation and I could just rent their apartments to travelers maybe during the summer and earn the difference between what the travel would pay and what I'd have to give to that student. And you know, it's been a really wild journey from going from this kind of side project in the summer to then realizing that actually there was no brand for short term rentals and kind of setting out to build that first brand for alternative accommodations. But then, you know, realizing that technology could play a phenomenal role into it, that we could really uplevel the quality of design so that we could meet the preferences of the next generation traveler and younger travelers in particular that aren't connecting with the big box hotels that are being offered today and that we could do this on a global scale and thereby reinvent hospitality. So Sonder has a long evolution and I'm hoping that it's going to keep evolving in the future. Right. And we're not going to stop at apartments and hotels in these 10 countries where the ambition is to re really global the top hundred markets across the world and beyond within the next handful of years and offering not just the accommodations we offer today, but also thinking about resorts and what Sonder Residences model might look like and glamping in any form really where we can apply kind of our capabilities of technology and design to elevate the stay, but democratize it through capacity for technology to really improve the efficiency of operations that we can offer something really stellar without breaking the bank.

Yeah, that's awesome. And I've stayed in one of your original Montreal apartments and I've also stayed in one of your sort of like next gen places in New York. And it's just incredible to see how your brand has evolved and how your capabilities have evolved. But there's so many components that have stayed true, right? Like picking the best neighborhoods that oftentimes are not well serviced by hotels and then decentralizing or really breaking all the aspects of a hotel like experience and bringing the very best of each of those layers of the stack, tying it all together with technology. It's been amazing to see how with just each strategic card after card that you turn over. It all fits together so well, dating back to just these simple apartments in Montreal. If you look at what has happened to hospitality, which has been a very difficult time, certainly ups and downs over the past couple years, you've continued to grow and set records for quarterly revenue year over year growth. Can you just give us some insight to like, the secret behind that success and the strategy that's fueled that?

Yeah, there is not a silver bullet, obviously. Ton of different levers to pull. I've actually tried to outline the three levers that we've used historically to kind of really outperform the market. And I think in a blog post I've written called From Basement to a Billion in Five Years. And the first one is strategy. And by that I mean decisions that aren't easily reversible and that are kind of impacting to the highest degree the customer experience, the economics, the growth trajectory of an organization, specifically our process whereby we make strategic decisions. And I think we've taken a very deliberate approach towards making decisions at the business. I'll give you an example. In 2019, we saw that there was immense competition for Amal. It kind of is obvious once you hear about it. Yes, there should be brands that offer, that use technology and offer these cool spaces that are really high quality and consistent. And we saw that that competition would actually potentially bid up the price of supply. That would be not a fight to find consumers because there's a sea of them, but there's a finite quantity of properties that fit the bill. And with too many companies bidding on them, it could be that we could start losing out on these growth opportunities. Growth could slow down or our economics could contract and the margins could compress with too much competition. So what we thought was that we could just get ahead of that and preempt the expansion. Actually, a really big inspiration for this was when Reid sent all of us Greylock portfolio companies an advanced copy of Blitzscaling. And so I got a little bit of an insight before the rest of the folks got insight into the strategy of basically seizing a market opportunity and very aggressively accelerating even our year over year growth in 2019 to basically place a bid on every property in the US that we thought worked for our business model. That's 100,000 units in 2019. And so that meant that we had to raise a good amount of capital. I think we raised $225 million Series D early 2019. And you know, we decided to hire a lot of people on our business development real estate team so that we could actually, you know, we just ran the math on how large we'd have to be in order to make that happen. And then we also even. That was like 2018, when we were kind of sitting down at a retreat. We even modeled out what would be the consequences of this on our competition, both in terms of their capacity to grow and the kind of, you know, how good the economics would be or how deteriorated they would be if they had to basically compete against us, the bigger and more funded competitor, at every turn. And we saw that it would actually be really challenging for them to post strong results in 2019. And when it comes 2020, they'd be in a precarious position to convince investors to finance the next leg of their expansion. And that strategy ended up being super successful. By the end of 2019, we saw our competitors had missed their growth targets. Their margins went the opposite direction. This is a scale economies business. Largely every year you should be able to post better and better unit economics as you gain more scale and as you can build more technology that gets kind of improves the efficiency of operations. So that really substantially weakened our competitors ahead of COVID And then when Covid came, the top competitors that we had in the market just didn't have an exciting story to tell based on their historical figures and have since folded and exited the market. And so that's allowed us to not only survive through Covid, but now on the other side, really thrive in an environment where the floodgates are open and there's an immense amount of white space for us to grow aggressively.

I remember in one of the earliest board meetings I participated in with you all, when I joined as a general partner and took over the relationship was just incredible. The strength that you and the team portrayed in the boardroom about this strategy and specifically going out and saying, look, we have to unlock this network effect in either demand or supply. We're choosing supply. We're going to use capital as a weapon and we're going to use use supply as a moat. And in a very short amount of time, you were growing month over month by the same number of units that some of your venture funded competitors had entirely under management. And to see this flywheel kick into effect was just so impressive. And you just spoke a lot about 2019 and this massive momentum that you had coming into 2020. And then of course, the global pandemic hit. Right. And I was looking back through some of my notes from many of the calls that we've had this morning and on March 13th. Right. So this is two days after who declared the global pandemic, and things were really starting to come unraveled. You. And I had a call and I was going through my list of portfolio CEOs one by one and doing updates on the business. And as I was preparing for the call with you, holy cow, was I nervous, right? Because, like, I knew what this was going to mean for your business. And I got on the phone with you and you were so calm and you were so collected and you were so dialed with your strategy and you opened the call saying, look, there's bad news, good news. But the good news is we've already got a term sheet signed and this thing is going to propel us well past the rest of the competitive set, including a bunch of these hotel brands that we're starting to lay off upwards of 85% of their people. Can you just, in a couple of minutes, bring us back to how you responded to that crisis, some of the pivots that you made that have made you an even stronger company than it was last year, and how you think the travelers expectations and demands are going to shift and how Sonder is going to meet those.

It was an absolutely wild time. We launched our operations in Italy in 2017. So we had a little bit of year over year data and we saw that, like the last week of February, February 24th is when it all started there. It wasn't pretty. And we saw that, hey, if this virus expands to the UK and then over to the us, this is what it could potentially look like. We looked at the data for SARS in Hong Kong, China, and just Generally Asia in 2003, and the impacts of a very dramatic rapid fall of demand that you could notice, not with a pandemic, but just an epidemic in one location. And it wasn't looking good at all. So we started just modeling it and looking at various scenarios and just accepting the reality that there is a high probability that there would be something really dramatic happening, something unprecedented happening in the hospital industry if this became a pandemic. And then we looked at the kind of levers that we'd have at our disposal to mitigate the impacts of this, specifically on cash, to ensure that we could make it through and be equipped to actually take advantage of the opportunity on the other side. And, you know, there are many strategies that were pursued. The one that worked the best was the focus on extended stays. So just thinking from first principles here, if everyone's scared of traveling because of viruses running wild, who could potentially stay in our properties? And we thought Traveling nurses, for example. We thought folks that would want to quarantine, we thought people that lived with roommates that would want to live by themselves, and a variety of other kind of esoteric use cases that we started building landing pages for. We started building small marketing campaigns, by the way. We did no performance marketing, just a product that in our view, sells itself quite easily and so didn't have that kind of muscle built in to just go aggressively pursue new customers through Facebook ads and Google AdWords. And we just spun it up and we started doing it and it became somewhat like 80 or 90% of our revenue, these esoteric use cases within just a few months. And by June, July of 2020, we're already operating at occupancy rates that are similar to what we operated at in 2019. So that was like a Hail Mary. And it worked so incredibly well and it literally saved the business. And in doing that, we managed to build a set of capabilities, you know, for stays of 14 plus days, we call extended stays, that are not kind of bolstering our demand. That's kind of converting a lot into the digital nomad kind of class of folks that are just, you know, living in Saunders, temporarily jumping from place to place and corporate housing and relocations and variety of these kinds of pockets of demand that we've identified during the pandemic that are still kind of ongoing and are growing today. So that was probably the biggest driver of success. Through it, I think we also very, very carefully looked at every line item of cost. We had tough conversations with our partners or landlords. We just did everything we could to be in a position where we could post some results that would inspire confidence for investors that would be excited about partnering with us to be really aggressive on the other side.

As I watched you grow through that period as a leader, it was just incredible. And I remember at the tail end of one of our calls, during that really tumultuous time at the beginning of the pandemic, I checked in with you. I said, how are you sleeping? How are you doing? This has to be just an insane, tremendous amount of stress on your shoulders. You said something that will always stick with me. You said, I am treating this like an elite athlete treats the Olympics. This is something that I've been preparing for as a leader and as a manager, and it's something that I am all in on, right? It's like you are focused on your health, you are focused on your mentality, you are focused on your mindset and everything from sleep to no alcohol consumption, like you are all in during this period. And it was really impressive for me to see that and then also to just see that really seep through, like your entire approach to generally managing through this time. But one of the, I think, other most important aspects, of course, of leadership is how you communicate that to the rest of your team and company. Can you talk just about how you were able to approach communication with these big decisions and these operational changes, especially the ones that were like, very difficult and painful, right, like furloughs and some of the measures that you had to take to reemerge as such a stronger company?

I think the core principle here has really been transparency, openness, like authenticity. I believe in it. And I really hope that we're going to be able to keep that spirit as we become a larger and larger organization and public company. Just corporate speak doesn't work for me. I just want to be human with the team and tell them what's going on, exactly why the decision is being made. Just never lie. All hands that we had during that time were extremely unprepared. We did these all hands. I think every week we increased the frequency from once every two weeks to every week. We increased the frequency number of leadership meetings from once every two weeks to every two days. We just went into complete war mode. And I think the order of operation was just like, let people know what exactly is going on. And I'll be honest in that. I think I also made some mistakes during that time and I've learned from them. And I think I'll be a better leader in the future for it. But I think that in that kind of moment of wartime, with quick decisions and all that kind of all the communication flow of what's happening and why and where we're going, we lost empathy. And frankly, I think we could have been far more empathetic to folks in the organization that were dealing with an insane amount of workload, that we're dealing with stress, that we're dealing with constant, rapid, unpredictable change. And most important of all, like the folks that we've had to let go, we did layoffs and furloughs on March 24, 2020. We're one of the first companies to do it. And generally, I think we did a good job and the best we could given the circumstances. And I think it was the right decision and that we communicated and we were empathetic with our employees. But there was just some leaders that I saw afterwards do it. And it's such a master class way that I took some notes and I Wish I would have done it much better and with much greater emphasis on how much these people meant to the organization and how valuable their contributions have been. I wish we could have dedicated more effort also to, you know, ensuring their success in the future. So all of these moments, I think we do the best that we possibly can. I really appreciate the positive feedback and I do think that the team did a good job. But at the same time, you know, there are a lot of lessons learned here and we're going to step up our game in the future.

We sit in this privileged position as early stage venture capitalists and one of the things that Greylock prides ourselves in is this idea of helping to realize rare potential. Right. And it's for me, looking at CEOs, the most important thing is what is their capacity for growth, right? Like not where is their level at any one point in time. And so just hearing you speak with this kind of self awareness around how you're going to continue to improve, especially now as a public company CEO is just, it's so impressive to me. So really I give you kudos for how you've managed to date and how you intend to continue to improve. We can switch for a little bit and talk about some of the supply side dynamics of your business. I've got a couple of companies in tech and real estate that are exposed to just how incredibly up and down, and surprisingly mostly up, the real estate market has been kind of across the country throughout the pandemic. Can you just talk a little bit about how that affects your supply strategy and where you go from here?

A couple of basics on how supply works for Sonder. There's two main vectors of growth here. The first is what I'll call like brand new developments, like ground up construction or sometimes it could be like a conversion from an office building. And you know, that is typically our apartment product where we're working like years before the property opens with the developer or we have an architecture real estate development team and we'll go and walk them through the process of building a Sonder building. There's a lot of capital, interest rates are low like you mentioned, property prices have been increasing, but there's a lot of excitement around building. And if you look at the aggregate statistics like permits that are approved or construction starts are extremely healthy right now. So that's doing really well. Office conversions is a really interesting subset of that because of the uncertainty, the long term uncertainty there is around some office markets recovering fully to 2019 levels. And so a lot of these properties, their Highest and best use has now become hospitality is specifically a Saunder hospitality use. And then the other side of the house is independent hotels. And that's a new store for those that know Saunder from the early days. We've evolved quite a bit since then and have expanded substantially. You know, our offering to include a really cool selection of boutique hotels that we operate under the Sonder brand as well. And these properties are typically converted from an existing independent hotel. They're upgraded to our design standards. Of course, we put in our technology and our operating model and processes to make them Sonder properties, but really they're existing hotels that are seeing a new day and are being refreshed and modernized. That's actually where we're adding a huge amount of value in the near term for properties that are opening very rapidly because the pandemic's been so hard on these hotels. And by the way, even though leisure travel is doing really well right now, business travel is really far from fully recovered and much less group and business convention. The aggregate amount of demand is still far below below 2019 levels. And that's really difficult for hotel operators, specifically ones that don't have the scale and reach of some of the big brands. So there's kind of a roll up aggregation strategy that we're pursuing for independent hotels. If you look specifically at some markets in Europe or places that have like a high exposure of like independent hotels, there's like a really huge opportunity to go in and bring those on to our platform. So Paris, for example, the market that we launched in this year earlier, wonderful property right off Champise was our first asset there. And there is 80,000 hotel rooms in Paris, one of the largest tourism markets in the world, of which the vast, vast majority is independent hotels and specifically subscale small independent hotels that aren't branded, that don't benefit from technology and economies of scale in the way that we can bring to the table. So we're very, very excited about the huge amount of independent hotel supply that exists across the world for like really unique, interesting properties that are in irreplaceable locations, sometimes have really interesting history, but can be modernized in a way that's going to connect with the next generation traveler through a conversion to our brand.

Absolutely. Yeah. Yeah. You think about all of the benefits that a Sonder like approach brings to the table. And I do think these play right into where the consumer demand is going, especially from millennials and Gen Z. So, you know, I just think about all of the positives, right? You've got placements that are directly in the action of the best neighborhoods, right? Like, who wouldn't want to stay on Champs Elysees in Paris? You've got these much smaller contiguous units where you don't feel like you're staying in what effectively is like a landlocked cruise ship. Like, you've really got that boutique experience. You're able to bring next gen services like doordash that replaces radically overpriced and usually slower room service. Right? And then you tie all of that together with this seamless technology that even though these properties are distributed, makes it feel like it is one very high quality, contiguous brand experience. When you think about all of the positives that you bring, and you just highlighted this case of helping independent hotel operators bridge what is a gap in continued certainly business demand right now, what are you seeing is the response from those landlords or those property owners and how does that work into how you think about structuring leases and how you make it a win win for everybody on both sides of the transaction.

There's an immense cost advantage to our model. This is kind of our permission to be in business. It's not just that we have a better customer experience, better mousetrap on that front, but really our economic model is being driven by the fact that we can offer this great experience at a much lower cost structure. That's what I referred to earlier as the lobby on your phone. The fact that you have access to seamlessly requests things, flag issues, interact with our team on your phone, have access to information you want to cancel your booking or extended. That's a couple of taps on the app. There's a variety of other features like that that are really cool and reduce the quantity of interactions that are needed with our staff. The check in process is fully automated, so you don't need to speak to a human to do it. You just upload your ID on our platform, you get verified and then you can enter the room with your phone. So there's a variety of things that you can do that don't necessitate like manual labor. It just turns out that hospitality has been kind of plagued by a ton of manual work for decades in a way that technology and software is the best to solve and it just hasn't happened yet for a variety of reasons. I'm happy to dive in deeper on why the industry hasn't done it, but the bottom line is that they haven't. So when we knock on the door of one of these property owners and we show them the technology, the platform and how that ripples through to the financials. I think they get really excited about the potential for what we can do for them. I think a lot of hotel owners are also concerned about cost inflation. It's very challenging to hire right now in the hospitality market. There's a shortage of labor. Open positions aren't getting filled for months at a time. That's compromising quality of service. Some properties are even shutting down some amenities or some guest rooms because they can't hire enough. So when we come in and knock on the door and say, hey, well, you know what? We've analyzed this property. We think we can generate this much cash flow for you and you don't have to take risk. We know we can bring in this kind of guest at this kind of price. We know our operating cost structure and we can basically guarantee to you that you will make this much year after year. So that means that the cost risk is taken out of the equation. They don't have to bother themselves with the really challenging task of offering an experience that is really high quality and that guests will love for decades to come. And they could just hand it off easily to us and know that their financial results are going to be quite strong because they're partnering with the next generation company. So the conversations are extremely promising for those folks that operate these independent boutique hotels. And then there's a similar argument from the other side of the spot. Right when we're talking to a developer that's going to build a new building from the ground up. What's really great there is that they have certainty of what's the property going to generate in terms of income. And one big challenge with new buildings is that they take a long time to ramp up. It takes 18, 24 months to lease up a new building or to have it generate kind of its stabilized rate of cash flows. And we've been really good. A company has gone. One of our core capabilities is getting one of these properties up and running extremely rapidly and making it perform fast. And so we can basically on ramp the revenue of these properties much more rapidly in a predictable fashion. It makes it much easier to finance these projects. A lot of these projects wouldn't get built if Saunder didn't say that we'd take it over and would generate this much profit for the owner. Lenders, construction lenders, and then ultimately banks that hold the debt after the building is constructed feel much more comfortable with our model in place than a developer that basically just has a spreadsheet and a plan.

Yeah, makes total sense. And I Mean, that really is the definition of the win win that kicks into place when you've got a network effect like your business does. So that's just, that's awesome to hear. So here we are, 2022, right. Really feels like this is the year, at least from my perspective. Business travel is going to start to really rebound. And I find this with my own meetings with entrepreneurs is there's only so much you can accomplish over zoom and, and being in person really does make the difference and oftentimes for a lot of businesses secures the sale. So if you think about travel bouncing back, specifically business travel, a lot of organizations doing the hybrid work from anywhere set up, you had a set of strategies from a consumer perspective that responded to those with your extended stays. How are you thinking about responding to the changes in business travel?

I can tell you about it first, like as a company, what we're doing for our own employees and then what we're doing on the demand side, we've embraced a flexibility, work choice model we call it, which is basically allowing our employees to have the freedom to work wherever they want. Of course we have some employees that are serving guests day in, day out and they need to be there on property servicing the needs of our guests. But we also have a lot of employees like software engineers and designers and architects, folks in finance that could be wherever they want and be really productive. And we found that with the right management system in place, the right structure for OKRs, roadmap tracking, accountability, one on one ones, and with just a really strong accountability structure, we don't have to like all be in the office together. And we can do really great productive work asynchronously over zoom and then occasionally once every few months, kind of get together with your team maybe for a few days, maybe in a slender market, experience the product and then, and then, you know, do a little bit more long range planning and relationship building in person. Like, we really love that, that new way of working and we've embraced it, you know, inside the organization. So now we are comfortable hiring remotely. We have hub offices where we are allowing folks that want to go into the office. We have offices that are set up for them and they can go there one day a week or five days a week or anything in between, or never at all. It's really just entirely up to Dan. So really focusing on the freedom and I think a lot of other companies are realizing that that freedom is really valuable to their employees and I think that's an opportunity for us in a couple of ways. It's no secret that there's going to be some business travel that might not exist anymore. Like the when you have to guy fly to another city to like for a 1 hour, 2 hour meeting and then fly back home. I think those are largely going to be replaced by zoom meetings. But. But there's still on the other side, new use cases that didn't exist before I think are going to be quite frequent. One of them is flying to HQ or kind of company off sites like Uber. I think had used to have these workations where like you go somewhere for a week or two and you just go with your team and you just like work really intensely on a project together in the same space. And then I think you're also going to see the rise of digital nomads trend that is accelerating really rapidly. And a product like ours is really kind of perfect. High speed, WI fi, consistent, high quality service 24, 7. Anything goes wrong, we will address it. And that can mean that folks can feel productive and confident that they're going to be productive on the road when staying at a saunter. I myself have done this with my fiance for I think nine months through 2020. We just rented a car and drove from San Francisco all the way to Boston through 21 states. That took us four months. And then we went and checked out a bunch of our European markets that took us another three months. Spent a few weeks in Mexico City where We launched in 2020 and had the best time and was super productive doing it and really loved the lifestyle. We're really fortunate to have the opportunity to do it and do it in a safe fashion staying at our contactless digitally enabled properties. So I think these trends are really powerful and that's a really great opportunity for us to kind of fill the low season demand weekdays that are historically a little bit less strong for our business. So it's tough to know where it's going to net out how much business travel is not going to come back versus what are going to be the new use cases. But we think the shift in consumer behavior and the behavior of business travel is going to tilt the scale a little bit in our direction.

Awesome. So let's talk just for a couple minutes to close out here about the future. Right. So you're now a newly minted public company. Awesome. And you've got these big designs on where you go from here. Can you just give us a couple of sketches about things that you're working on, whether it be on the product roadmap or the new Geos that you're going to push into what it's going to take to get you there from a personal perspective, folks that you're looking for that we can help you recruit and then just put that in context broadly with how you think the future looks for Sonder.

I think there's an incredibly exciting future ahead for us. In preparation for being a public company CEO, I went back and read all of the shareholder letters from Jeff Bezos and there was one about long term strategy that really stuck with me. And his point was that it's really difficult to know what the future is going to look like five, ten plus years from now. What's much easier to do is try to predict what's not going to change. And the reason why that's interesting is that by focusing on what's not going to change, you can just make really long term profound bets and nothing really revolutionary can happen in like six or 12 months. It's like year after year after year of like diving deep and making some continuous investments into a few verticals. And so for Amazon that was selection, it was delivery times and it was cost and just efficiency of the system. So which customer would say that they'd rather it was delivered more slowly, there was fewer things available on Amazon or that it costs more. Right. So I think for us, the equivalent of this, the three kind of things that we're really going to invest deeply into over the next five years. And frankly that might not be the sexiest stuff. I just think that those are the things that are going to work the best and reinforce our value proposition as our business of staying with Saunder. First thing is inspiring design. So we're going to keep pushing the envelope of what we can do from a design perspective in our properties. So that means not just like nice furniture and artwork and nice wallpapers or colors on the wall. It's really thinking about how we can co create with developers some really mind blowing spaces, but in a way that's accessible to the many. So that means partnering with some factories overseas that can supply us with materials that are really both sustainable, high quality, beautiful and help developers basically come up with architectural drawings and finishes and concepts that are at the cutting edge of architecture and interior design, but in a way that's scalable and won't break the bank. So that's one area and there's plenty of other initiatives outside of just architecture and interiors. Design really applies to every part of the experience and that's the digital design, UX design and experience design, service design. So we're really thinking about how we can do something that's incredibly inspiring and elevated. The second vector is modern service. So what that means is we want to make the app, the Sonder app, very futuristic. We're making some bets to add more and more partnerships and features to the app. So the ambition there is that you'll get service that is better than a five star hotel, but with none of the three or four staff per guest room, white glove service that frankly doesn't even resonate with the next generation traveler anyways. We kind of want service to be invisible, to be there when we did it, not there when we don't. And so we're going to be looking at all of the luxuries provided in a five star hotel setting and attempting to modernize and recreate it in a more compelling fashion using technology and digital channels. And then the third one is good old continuous improvement kind of Toyota production system style, you know, identifying all of the potential defects to the experience and eliminating them at the root. And so just the tiniest of issues, we want to make sure that we figure out a system that reduces dramatically the probability of this occurring down the line so that, you know, anyone that stays with us can virtually be guaranteed to have a great stay. And this is something that's going to take 5, 10 years to do on each of these three dimensions and but we're going to relentlessly invest in them. And I think having this level of focus will allow us to build these really long term, durable, competitively defensible capabilities within the organization.

The clarity of thought with which you just outlined this, I think speaks exactly to why we're so bullish on you and your company and your entire team. And I'll go back to a tweet just to close this out that I wrote when you announced the SPAC back at the end of April. And I said, Francis is perhaps the strongest operator I've worked with in my time at Greylock. And the Sonder team is a machine. And this thread, this tweet storm that you had written, is a perfect example of the clarity of thought and the first principles approach that you bring to the growth of your business. And I think what is just the evolution of this entire industry. So again, Francis, I'll just say it's been an honor being in business with you and your entire team. Thank you for that and congrats again on today's debut.

Thank you so much and what a privilege to have the opportunity to work with you and the broader team at Greylock. Thanks so much.