2016 is on track to see the largest capital investment in Real Estate specific technology to date. The number, depending on who you speak to, runs between 4 – 6 Billion US dollars. This figure may seem crazy at first, but that is until you see the amazing technology start-ups that are emerging with a singular focus on the Real Estate market.
My attendance at the MIPIM PropTech Summit, which some may view as the “flagship” event of the NYC Tech Week, allowed me to meet up with some founders of these new companies. What was clear to me was that the majority of the founders had an appreciation for the fact that Tech start-ups have some post .com bubble baggage to shake off. In order to do that they’ve had to rethink how they market and build their companies. How are they tackling this task? Quite simply, they are focussing on firstly, making sure there is an actual need for their product or service and then looking to involve the end-user (you or your colleagues) from the beginning to define not only the initial offering, but the product roadmap. Once they have this backing they are further assisted by being able to take part in mentorship / incubator programs (like that offered by MetaProp) to ensure they are making sound business decisions and have access to leaders in both the technology and Real Estate fields.
So what does this mean for the Real Estate market as a whole? Really what it boils down to is technology almost forcing its own adoption. People often talk about the Real Estate industry as being behind the times, or lacklustre in adopting technology. Today’s millennials are taking the bull by the horns and pushing technology into the industry. A large portion of these new products are able to deliver big efficiencies with relatively low initial outlay. Look at the huge effect the likes of VTS and HighTower have had on the industry. For most of their target clients, it’s not a matter of if they will adopt, but rather when and on what platform. The power of these new businesses actually lies in the industry's previous lacklustre approach to technology, as slow adoption of technology has meant that many companies still follow archaic and inefficient processes. These start-ups are looking, and finding, opportunities in creating value and efficiencies in so many places. HVAC costs too high, enter Ravti, legal ping pong around zoning – hello Envelope, not sure if you’re getting the best possible financing – sign up for StackSource. All three of these companies have recently graduated from the MetaProp incubator and are either live and running or offering some form of Beta testing.
Whilst this type of progress is great, it does mean an increase in the number of pieces making up the “best of breed” or “multi-stack” technology platform. Luckily another theme, “open by design” is a mantra of today, with the majority of companies offering up APIs from the word go. This means that you can ensure that each of these best of breed solutions not only integrate with each other, but with your ERP or financial platform. So in a blue sky scenario your HVAC platform (Ravti) connects with your asset management system and creates an inventory of your equipment and then opens up your maintenance or acquisition needs to an open market which drives the best possible price, which then creates purchase orders and the associated workflow within your financial system.
So, where does that leave you? Most likely it leaves you, or the company you work for, in a situation where you need to decide on which technologies and solutions to embrace. You will most likely be trying to balance the benefits of adopting early enough to leverage some competitive advantage with the potential costs of adopting too early. You may also be battling to understand how well these newer technologies and products will play with your pre-existing stack. We at Open Box would love to help make these decisions easier. With our 15 years of experience in working with technology specifically in the Real Estate business we can help identify the right time to adopt as well as define and document how each new addition to your stack will integrate with your current systems.