I am often asked by people in the industry ‘What PropTech should I buy or invest in?’. To which my reply, which irritates those looking for easy answers, is that that is the wrong question. What you should be asking is ‘What do I need to know, to know what PropTech I should buy or invest in?’
So, what do you need to know?
Who is your customer? Sounds simple doesn’t it? Well, if you want to create new value and differentiate yourself you maybe need to think about who your customer is differently. For example, in a workplace world where the percentage of people working ‘flexibly’ is growing each year, and Space as a Service (no lease, purchased by the hour, day, week or month) is the new normal, who is an office owners ‘Customer’? It’s clearly no longer the, most likely, CEO or CFO of some corporate entity. No, the customer is now the individual, and you have to engage, inspire, interact with and sell to each and every one of these individuals who uses your space. That is, for most people in property, a new game and requires different tools and a new mindset.
If you are a retail property owner the same applies. It might be your retailer tenant that pays the rent, but really your customer is each and every person that walks into your shopping centre, or store. Retail property owners must own the relationship with visitors to their space. Without data, space is just a commodity. Alibaba have not bought a chain of Chinese shopping centres because they want to get into the property business.
How does your customer want to interact with you? When you can book an Uber in 30 seconds, make bank payments from your phone, order anything from anywhere in the world and have it delivered tomorrow, why on earth is any form of transaction in the property world so utterly painful? Why is it so slow, why isn’t the information you need available immediately, why can’t you access documents in a readable format on your phone, and why oh why do you have to wait till office hours to get anything done?
What part of your job could be done by a robot? Mckinsey say 49% of all tasks performed at work could be replaced by technologies that exist today. You might not like the answer but do you know enough about the technologies that are available today to dispute this? And in your case is the actual figure higher or lower than 49%?
What data do you have access to? Think of the four V’s of data: Volume, Variety, Velocity and Veracity? The digital world is built on data: knowing what you have, what else you need and where you could get it from is essential.
How well do you understand your market and your competitors? Have you considered that like Alibaba above, they might no longer be from within the property business? You might be being smart and following Wayne Gretzky who famously said ‘I don’t skate to where the puck is, I skate to where it is going’, but what if the game is no longer Ice Hockey. Kodak wasn’t put out of business by a better film maker.
All of the above is what you need to know BEFORE you ask about what PropTech to use or invest in. Because you need to understand clearly what is the pain point that needs relieving, what gains you are trying to achieve, and what is the job that needs doing. You should not touch any technology until you understand what the value proposition is.
If your job, or big chunks of it, is under threat from the robots, what can you do about it? What technology can you utilise, or co-opt, to fight off this threat? How could you turn this severe bug into a feature, and by embracing the robots, enable them to augment your skills and make you dramatically more productive than before. Being brutal, when you and your colleagues are up against the robots, it is not the robots, but your colleagues, that you need to outrun.
There are methodologies (de rigour in tech startups) that help you dig deep into your value proposition and business model, and these are very useful in answering all the above questions.
Once you get to this stage you should have a clear understanding of what technology (PropTech or otherwise – the nomenclature is not important) you need, and clarity as to how these new tools will catalyse innovation throughout your business.
The days of IT are over: every business is a technology business. The differentiator going forward is knowing what technologies you can use to compliment your human ingenuity, skills and creativity in the service of a robust, solid and scalable business. Knowing the right questions to ask is a good start.