TAKING STOCK OF THE REAL ESTATE TECHNOLOGY BOOM
These days it’s almost a cliché to extoll ‘the power of technology’, especially in what is now such a highly-connected and rapidly changing digital landscape. However it’s still important to consider just how far certain technologies have developed in a short space of time. This pace of change is typified by the fact that we are now said to live and work in a ‘data economy’, where information drives every aspect of our professional lives, and to some extent, our personal ones too.
Many leaders now have unprecedented access to business critical information in real-time, offering meticulous insights into everything from an entire building’s performance to the mechanical efficiency of a single piece of equipment. Unsurprisingly, this ‘granular’ insight has become essential for those tasked with extracting maximum value for money. In volatile times such as these it’s more important than ever to have the latest technology on hand if you want to maintain a competitive edge in the market – the real estate industry is no exception to this.
Most providers in the real estate technology sector fail – but it’s certainly not due to a lack of creativity.
It’s a commonly cited fact that the vast majority of tech start-ups fail within the first three years, but there is no concensus on why this is the case. As a forward-thinking industry, proptech start-ups could be charged with an overt focus on innovation, as opposed to the business fundamentals that help new companies grow sustainably. But this seems short-sighted. Here I wish to offer some options available to both entrepreneurs and established providers in order to strike a stable balance between the latest innovations and time-tested experience.
NURTURING THE INDUSTRY ECO-SYSTEM
There are hundreds of providers in the real estate technology sector; unfortunately most fail to make their mark or falter entirely. There are a number of reasons for why this is the case, but it’s certainly not due to a lack of creativity. In a time of unprecedented uncertainty, both economically and geopolitically, new businesses now find it harder than ever to secure the funding that is so often necessary to gain a profitable foothold. Sustainable growth for new businesses is vital at the best of times, but without steady income in the first three years there is little to no chance of success.
Proptech is here to stay, but it must focus and ensure that end-users remain at the forefront of development.
It’s right that innovative ideas are given the opportunity to take hold, if not for healthy competition, then for the betterment of an entire industry. Disruption has to be positive and often the market will determine the value of a new development early on, but sometimes excellent ideas fall away for no good reason and this is frustrating. In recognition of this, more established providers are now beginning to join up processes and orchestrate a ‘best of breed’ in the proptech space.
This industry ‘eco-system’ is providing an opportunity for ideas to flourish, which in turn is giving established organisations the opportunity to advance their processes in line with the latest and greatest in prop-tech. It’s an exciting symbiotic relationship that is seeing real results.
I’ve personally seen Qube make good use of this strategy to the point where the organisation now boasts 50 integrations with a range of different applications. Importantly, this method also allows collaborators to make greater use of the extensive data sets accrued by larger organisations which drives improvements to user experience – this can only be a good thing.
RISE OF THE CUSTOMER
But this eco-system is of little use without a coordinated focus on those that utilise prop-tech on a daily basis – the customers. Recent research shows that 88 per cent of residential managers feel under-resourced when trying to meet the requirements of an increasingly demanding user base. And it’s hardly surprising when you consider how many potential contacts a property manager will have to deal with throughout a working day; leaseholders, legal services and debt collection; developers; suppliers and contractors; committee directors, and many more. Couple this with regulatory pressures and the task soon becomes unmanageable. Property technology offers staggering potential for improvements, but innovations must always focus on the end user to encourage sustainable growth.
That said, the industry is a very exciting place to be right now. It’s encouraging to see the market growing in the right direction, offering innovations that few could have dreamed of just five or 10 years ago. I have personally seen the market diversify, with interfaces becoming more intuitive and accessible, giving customers the extra resource they need in an ongoing era of restrictive budgeting. Proptech is here to stay, but it must marshal its focus and ensure that end-users remain at the forefront of any development. Innovation with a purpose is hugely powerful – success with this strategy will ensure we usher in the next great stage of the proptech revolution.
Trevor Youens, Managing Director Residential Solutions, Qube Global Software
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