Need a quiet place to work? Breather raises $1.5M to offer on-demand spaces, initially in NYC

By Michael Carney , written on June 5, 2013

From The News Desk

The sharing economy has transformed our relationship to ownership and accessibility in a variety of categories. In terms of  transportation, car- and ride-sharing services like FlightCar and RelayRides and on-demand taxi and livery services like Lift, SideCar, and Uber mean many will no longer need to own their own car. In the real estate industry co-working spaces and short-term lodging marketplaces like AirBnB mean that office space and travel lodging are more flexible and affordable than has ever been the case.

Now there’s a new sharing economy company entering the real estate category to tackle the shortest term space needs. Breather, which launches in October in New York City, will offer its members an on-demand network of private rooms designed for work and relaxation – but not for overnight sleep – each of which can be accessed by smartphone. The concept is similar to ZipCar for micro-workspaces.

Currently those looking to work or gather while on the go turn to coffee shops, restaurants, and hotel lobbies – none of which offer any privacy or much comfort. Those in need of a quiet place to make a phone call, however, have far fewer options. When the Breather network goes live, those in NYC will be surrounded by hundreds of carefully curated spaces, all of which were formerly vacant but which now can be rented for an hour or for a day.

“I wanted to give people a place where they could get peace and quiet, anytime, whatever their reason for it,” says Breather founder and CEO Julien Smith, who is a New York Times bestselling author. “A Breather is like a little studio apartment or office. We make sure it's always nicely furnished, with good wifi you don't have to ask the password for. They're always quiet, private, and clean, so you can take a phone call, have a meeting, or take a nap. It's basically like you own the space for the short time period you're there."

Breather assembled its catalog of rooms through partnerships with the city’s large property owners and property managers. “The essence of Breather is we fit into the cracks of a city,” Smith says, echoing a core principal of the sharing economy concept.

Each space will be slightly different, depending on the building and its location. But each room will be outfitted with a smart lock which will connect to the company’s mobile app. The rooms are then equipped with WiFi and furnished like a modern lounge. Smith says that a new breather can be setup in less than a day, making the inventory highly flexible.

"I’ve always thought that on-demand space was inevitable, and have been thinking about this problem for almost a year,” Smith says. “But when saw the first smart lock I knew that this would be the technology that would make it feasible.”

The rooms will be regularly refreshed by the company’s network of cleaners, with the frequency determined by the type of use reported by each guest. For example, if a room is used only to make a series of phone calls, it may not be cleaned prior to being made available to subsequent renters. On the other hand, if the room hosts a lunch, is used for a nap or a shower, or the guest indicates through the app that it needs cleaning, then it will receive attention prior to being re-listed. “We plan to err on the side of caution,” Smith says.

Breather has the potential to transform cities. Much like Uber and its competitors have removed the need to hail a cab, the new real estate concept will make private spaces available at the push of a button. Once a user sets up a profile, and inputs their payment details, the app can verify identity and there’s no need to ask for permission to use a space.

There’s every likelihood that someone at sometime will abuse a Breather. But they won’t get a second chance to do so. The platform will incorporate a comprehensive reputation system, meaning that users who misuse a space will get banned for life.

“We take safety and privacy seriously,” Smith says. “We are also very conscious of regulatory issues, which is why we don’t do overnights. Lastly, insurance is a big part of what we do, just like it is for a hotel.”

The regulatory and liability issues may not be as easily solved as Smith suggests. Despite tens of millions of dollars raised and access to the best lawyers money can buy, Uber, AirBnB,  and each of their industry competitors have found themselves in battle after battle with each new market. Breather is inventing an entirely new concept of space rental, and with it is exploring entirely untested areas of the law.

It’s not just residents and visitors to a city that stand to benefit from Breather. It also solves a major problem for property owners, who currently sit on vacant space for extended periods of time with little or no way of monetizing it in the interim. And in high traffic areas, adding a space to the Breather network may be as profitable as renting it out long term.

In New York, Breathers will cost approximately $20 per hour depending on the particular space and local real estate rates. Bulk discounts and other incentives will likely be part of the final model when the platform launches later this year, according to its CEO. This is good, because at $20 per hour, the rate can quickly approach that of a hotel after half a day or more. The company is also working to finalizing its model for compensating property owners, but Smith indicates it's likely to be based primarily on a revenue share.

Breather, which has dual-headquarters in New York City and Montreal, has raised $1.5 million in a Seed round led by Canada’s Real Ventures with participation from Gary Vaynerchuk, Loic Le Meur, Mike Walsh, and other angels. As the company finds its footing in the Big Apple look for it to quickly expand into other major metros, first in North America and eventually around the world.

As Smith says, on-demand space feels inevitable. Workforces are more distributed than ever before. At the same time, macro-economic changes have wreaked havoc on the real estate market, making alternative uses for vacant commercial spaces a welcome concept. Breather has yet to prove out its model and faces massive execution challenges to capitalize on this opportunity. The company will likely have to learn on the fly as each of its sharing economy predecessors were at one time – or a dozen – forced to do themselves. But this feels like an idea whose time has come. As the first company to offer a solution of this nature, the market is Breather’s to lose.