Real Estate & Technology
A couple of weeks ago I attended a technology summit, primarily as rather than being yet another #PropTech event, (and I have nothing against those I hasten to add) it was specifically targeted at all service sectors, particularly legal and finance, as well as real estate. The opportunity to consider similar issues through a different lens was too good to pass up.
It’ll likely come as no surprise that I – and others – believe that the real estate industry has historically been very insular, particularly in the realm of technology (after all, why change what has been largely a successful formula to date?) Times are changing of course and these days you can’t turn a corner without stumbling into a property technology event of one description or another. That’s great, but it does mean that we are still looking for the answers within the sector, and potentially ignoring both solutions and problems that will continue to impact us from other industries.
This therefore provided the opportunity to see what is on the horizon in a much broader context. We must not forget that arguably the property sector, certainly in very specific but growing areas, is becoming increasingly service orientated and thus it is no longer necessarily about the building in the sense that it used to be, but additionally about what the occupiers of the building want. How can and will this be delivered under new models?
And there was some serious thinking on display, even when putting aside the details of storing data on DNA – definitely on its way, and that my pet subject, quantum computing, is about to become a workable reality according to those much closer to the sharp end of development than I.
More immediately relevant though were some very common themes that run throughout the service sector, regardless of the industry. And it was people, change management, structures and adaptability, amongst other things. The bottom line is that for the moment we still need people to implement, innovate, iterate and stay curious, and that whatever they do adoption of tech solutions is an ongoing battle against corporate inertia.
Some takeaway thoughts:
1) Size – bigger is not always better. The big guys have the same problems as the small guys – just with bigger budgets. Whatever resources they have to throw at delivery, they are also suffering from the speed of technological change and the corresponding sheer volume of potential solutions – multiplied “X”times. Today’s SaaS solutions no longer require enterprise scale, meaning that small businesses can compete, or at least level the playing field in that area.
2) People – it’s always people. In a data driven age, we in real estate and professional services more generally are no longer simply competing against other like minded businesses in the same vertical, but against all the tech firms who are employing the people both we and you want. That’s a tough ask – the tech firms, rightly or wrongly – are often perceived to have both the right environment and the remuneration structures to attract the “best” people, potentially leaving the rest of us to fight over the next tier down.
3) Structure – no pyramids please. Something that I have suspected for some time now given increasing automation. The “bottom” layer of many workforces is being stripped out and replaced with software. This typically leaves a diamond shaped structure, with more in the middle. What does this mean for training, recruitment, succession planning and career paths? We’re about to find out. The networks vs. hierarchies models are under close scrutiny. There isn’t one answer but you do need to work out what is best for your business and make it stick.
4) Pricing – where is the value? Some really challenging thinking in this area, to the point where some professional services businesses can foresee that what is currently their core product will be given away free, with only the really technical value add services providing any differentiation (and corresponding income). Disaggregation and associated disruption a big potential issue here that they are attempting to address before it happens.
All in all, plenty to consider and translate into meaningful action. Whatever you do, make sure you’re not so focused on your own sector that you miss out on the bigger picture. Technology, demographics, economics, and yes, even politics are impacting the property sector in ways that mean it is becoming a never ending series of sprints, rather than a marathon. In that environment adaptability and agility is key.
Author: Robert Stark