We propose a multiscale diagonalization scheme to study disordered one-dimensional chains, in particular, the transition between many-body localization (MBL) and the ergodic phase, expected to be governed by resonant spots. Our scheme focuses on the dichotomy of MBL versus validity of the eigenstate thermalization hypothesis. We show that a few natural assumptions imply that the system is localized with probability one at criticality. On the ergodic side, delocalization is induced by a quantum avalanche seeded by large ergodic spots, whose size diverges at the transition. On the MBL side, the typical localization length tends to the inverse of the maximal entropy density at the transition, but there is a divergent length scale related to the response to an inclusion of large ergodic spots. A mean-field approximation analytically illustrates these results and predicts a power-law distribution for thermal inclusions at criticality.