It’s common knowledge that the vast majority of tech start-ups fail within the first three years, but why is this? Is it to do with naivety or inexperience to develop and grow long-term? As the prop-tech industry develops rapidly, with its eyes set firmly on the future, is there a need to get back to basics?
The need for time-tested experience is greater than ever and could be the answer to combat the mistakes of inexperience. In this article, Trevor Youens, MD Residential Solutions for Qube Global Software, will explore the changing prop-tech landscape and what can be done to ensure the industry develops evenly, blending experience with the contemporary developments.
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.
On first inspection, this term (the power of tech) seems to overplay the importance data has on the market and wider economy. But on the other hand, there can be little doubt that it’s information which has spearheaded the dramatic improvements to all types of industry and enterprise. 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 this sense, it’s not surprising to learn that the finance industry’s success with technology has in some ways precipitated the ‘prop-tech’ boom we are now experiencing.
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. The deal-orientated nature of property has often led to tech being an afterthought, but now it is seen as the differentiator in terms of customer service. Users too are now expecting better applications based on what they encounter as consumers. This demand for the latest developments has created a surplus of industry talent, but an unstable economy has done little to help these organisations establish themselves in the market.
It’s a commonly cited fact that the vast majority of tech start-ups fail within the first three years, but there is no agreed consensus on why this is the case. As a forward-thinking industry, prop-tech 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. The real estate industry is teeming with exciting ‘disruptive’ ideas, each with an interesting take on measurement and management of the built environment. But this disproportionate supply of new talent is a large part of the reason why so many great ideas fail to take full flight. 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.
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 prop-tech 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 datasets 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. Again, it may seem strange to speak about the importance of customers – especially when recalling the old adage of ‘the customer is always right’ – but users now demand so much more from tech solutions. Recent research shows that 88% 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 much 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 in order to encourage sustainable growth. Importantly, the opportunity is there for the taking; further research from Qube shows that a remarkably small amount of property professionals consider themselves at the forefront of the prop-
tech revolution. This figure will undoubtedly fall so long as the ‘eco-system’ continues to develop with a customer-centric approach. Doing so will help prop-tech avoid falling foul of the idealistic thinking that so often plagues booming industries and consigns them to an eventual decline.
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 5 or 10 years ago. I have personally seen the market diversify, with interfaces becoming more intuitive and accessible, giving customers the extra resources they need in an ongoing era of restrictive budgeting. Prop-tech 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 prop-tech revolution.
Thanks to Trevor and the guys at Qube. If you would like to contribute a guest blog, please feel free to get in touch with me.