On PropTech & the lag in adoption of technology
At a recent event, a colleague pointed out to me that a number of the latest “PropTech pioneers” were repeating their frustration that the adoption of technology in real estate lags behind other sectors.
Having worked in the field for 20 years, I have to say that’s true. However, I don’t think that repeating that message over and over again is a great way to advance your cause.
So, with a view to being constructive, I thought I’d share some of the things we’ve learned from working with both real estate companies and technology providers who have achieved global success.
Acknowledge the hurdles
From my point of view, it’s entirely understandable that the real estate industry has lagged behind others in terms of the adoption of new technology.
If you’re running a division of a global real estate business and your key processes continue to bring in considerable profit – and that profit is projected to continue – where is your incentive to change?
People who become senior executives don’t usually get to those positions without being intelligent. They know that the world is changing and that they will need to invest in new technology, but there are plenty of options for them to choose from. One of those entirely valid options is to wait and see.
So, if you want your target to invest in your latest virtual reality headset, you’ll have to make a pretty convincing case.
Understand the pain points
This is a story we’ve heard more than once:
An executive takes a presentation from the director of a promising start-up that has a great idea. Unfortunately, the product does not meet their basic business needs. The bright young thing promises to make changes based on the feedback. Six months later, the PropTech pioneer is back with an enthusiastic presentation of their upgrade…which once again fails to meet their basic business needs.
You understand your product better than anyone, but you need to show that you understand your target’s real pain points.
One way you can do that is to get your hands dirty: get involved in a business and get first-hand experience of how things work or not. It’s not a coincidence that Nick Romito and Brandon Weber both had experience in the sector before becoming the sector’s hottest tech pairing.
Consider bringing on expert advisors who have a thorough understanding of how the industry works or build close relationships with experienced people.
Real estate can be a complicated business, so don’t be surprised to find that your solution is only part of the answer. There may be other issues that a business needs to deal with first, so you might have to help line lots of ducks in a row before your solution becomes viable.
Put your solution in context
You can put your target prospect in a virtual reality headset and run a demo of a safari with lions and elephants and beautiful landscapes, but unless he/she is a visionary, all he/she’ll get is a little motion sickness.
Another way to demonstrate that your idea is worthy of investment is to put your solution in the context of your target’s business operations.
That could mean making a mock-up, dummying data, pre-emptively integrating with popular providers or even mapping out a businesses entire ecosystem. Be warned, it can get quite complicated.
Most of the companies we work with have a global presence, with regional divisions and departments. This means that even the ‘simple’ updates or integrations are not something to be taken lightly. There are always certain processes in places to ensure efficient and effective practice maintained, multiple software solutions with a lot of data feeding in and, always, a lot of dependencies to take into consideration.
Even when it appears there’s an obvious benefit to a minor solution, it’s not always easy to get a positive decision. So, think how hard it is to get the green light for something that requires cultural change.
Appeal to £, $ or €
Let’s be honest, owners, investors and senior leaders are often driven by making as much money as possible.
Show the leadership team the financial benefits of your solution and you’ll both be laughing all the way to the bank.
You’ll need to get this bit right. So, if you’re not great on the detail – or at talking the boardroom language – get a partner with complementary skills. Not only will it make your inspiring leadership skills more impressive, it’ll give the people with purchasing authority much more confidence.
Build relationships and be prepared for the long haul
I certainly won’t knock you for making a big splash or sponsoring an industry event, but you should think hard about the best use of your marketing budget.
Things can happen at a much slower pace than you would like, so you should be prepared for the long haul. That doesn’t mean be patient – remain driven and hungry and continue to refine your approach.
Build relationships, leverage those relationships at the right time and stay positive.
Motivated business leaders are always interested in innovations that can help them gain an advantage over the competition. They are open to new ideas. It’s up to you to convince them.
We’d love to see you around in another 20 years’ time, but if your most prominent message is that “the industry lags behind”, then you might want to consider refining your approach.