The past is a poor guide to the future

October 2015

Here’s a thought experiment for you: Think ahead ten years and imagine that no one needs office or retail real estate in the way they need it today. No-one needs to go to an office to do any of their work, and everyone can discover, purchase and have delivered to them any item of clothing, or food or whatever in just a few minutes.

Now don’t let that thought be pushed aside as crazy. Think back ten years and consider that then there were no smartphones, no tablets, no social media to speak of, no Uber, no Airbnb, no Google Docs. Can you honestly say you expected to be doing what you do today ten years ago?

You didn’t did you? And today there are 2 billion people with smartphones, 1.4 billion users on Facebook and hundreds of millions of people who daily use the likes of Twitter, Whats App and Instagram. With 1990’s supercomputers in their pockets vast swathes of the world’s population are spending much of their day doing things that simply did not exist just ten years ago.

So think forward, but abstractly, based on the one thing we can be certain about, that technology is exponentially increasing in power and speed and simultaneously becoming cheaper and cheaper. Consider what might be if everyone has devices 16 or more times faster than now, multi gigabit mobile broadband, unlimited data storage, ubiquitous super high definition screens, and personal artificial intelligence assistants. Imagine Google’s mission to ‘organize the world’s information and make it universally accessible and useful’ has been achieved.

You’re now thinking backwards from the future, rather than projecting a future based on iterating from the present. And that makes all the difference. Not digitising the past, but imagining what might be possible with tools that do not exist yet.

Many people today say planning is vital, but the worse thing that could happen to you if you set a five year goal is that you achieve it. Because the world will have changed by then and where you thought was the place to be will no longer be where it’s at.

So in ten years time we’ll be deep in an age of information abundance, with extraordinary communication tools at our disposal. We can do so much with so little it beggars belief. What then do we, as humans, bring to the party? And where do we want to do it?

Human capabilities change but human needs do not. Barring adding ‘Batteries and Wifi’ to the base, Maslow’s hierarchy is immutable. What is our value add? What we bring is the ability to innovate, interact with complex objects in unstructured environments and apply social intelligence to problems.

The thought experiment ends therefore with defining what spaces, what places we will need under these new circumstances. It’s not a matter of the death of the office or the high street, it’s about understanding the fundamental customer needs and developing the appropriate product.

Antony

Essential tech for real estate: WiredScore

October 2015

WiredScore are based in New York but set to be a feature on the UK property scene shortly. And a good thing to, because what they do is allow a property owner to demonstrate that their building is fit for purpose in a digital world. Their Wired Certification is a program launched by Mayor Bloomberg and the New York City Economic Development Corporation that identifies and certifies buildings with the fastest and most reliable internet connections. They are building a similar relationship with the Mayor of London.

They perform in depth analysis of a properties connectivity with three key attributes in mind; absolute connectivity, infrastructure and readiness to improve. And simply put, the higher you score the more suitable, at a base level, the building is for technologically savvy occupiers.

As mentioned opposite, a doctored image has been doing the rounds on the internet that shows Maslow’s Hierarchy of Needs with an additional layer at the bottom entitled ‘Wifi’. To much approval, as anyone who works in tech is stymied by anything other than great Wifi.

I hear it asked often ‘what on earth would you do with gigabit broadband?’ – well, lots of things you cannot imagine now. Just like you couldn’t imagine email on your phone in 1990, or streaming House of Cards in 2005, or following driving directions on your smartphone. The simple point is that broadband is the great enabler. Wallis Simpson once quipped “You can’t be too rich or too thin.” – well today she would have added “or have too much broadband”.

WiredScore will help you find it. Good luck to them.

Antony

First published in Estates Gazette 10th October 2015

Tech is the lazy (and smart) person's friend

September 2015

The 19th century Prussian Field Marshal Helmuth Graf von Moltke used to categorise his officers as belonging to one of four types.

First off there were the not so bright and lazy. These people were mainly harmless, were useful for menial tasks and did what they were told. Then there were the not so bright but industrious and these people were a menace. They did the wrong things, generally caused chaos and created unnecessary work for others. They needed to be rooted out and removed.

Then you had the smart and industrious. These people made excellent general staff officers, as they largely made sensible plans, got on with things, and did what was required in an intelligent way.

And finally you had the smart and lazy, and they were suited for the highest office. Why? Because their laziness led them to do the right thing in the easiest possible way. The term ‘lazy’ though was not meant in a pejorative sense by the German, as these officers never threw brute force (in their case that involved the lives of their soldiers) at a mission. They used their intelligence to find the easiest, least costly solution.

I suspect many of us could pigeon hole most of our work colleagues into one of these categories; in fact it makes a good exercise, as the distribution within the quadrant is a classic Pippa Malmgren ‘Signal’ as to the potential of your employer. A bare top right (smart and lazy) and you’re not going anywhere fast.

Which is where tech comes in, as the fundamental characteristic of well designed technology is to remove friction and simplify processes. I need a taxi; open Uber app and within a few clicks it’s on the way. I want a book; open Amazon app, search, tap on 1Click order and it’s on the way. I need a flight, or a hotel room, or some insurance, or directions or pretty much everything and whizz, bang, pop it’s done. The smart but lazy way is best.

So how is it at your company? How long does it take you to do what you need to do? And how easy is it for your customers, or partners, or suppliers to deal with you? If you were one of your customers would you, honestly, say that dealing with your company was both easy and a pleasure?

The BCO, in their recent ‘Building Performance’ report found that just 17% of office occupiers surveyed rated their satisfaction with the way their property was managed as good or excellent. Is that an outlier within the industry, or par for the course?

The property industry is full of smart people. So why are so many customers not happy? Could it be that by not embracing technology we simply cannot provide the service our customers desire? It is time for more smart but lazy thinking; time to grasp the potential of ‘the machines’ and do much more with much less.

Antony

Originally printed in Estates Gazette 12th September 2015

Essential tech for real estate: Web Summit

September 2015

Web Summit has been called “the best technology conference on the planet” and it takes place in Dublin from the 2-5th of November.

And you should go. Why? For two reasons. First, they have grown from 400 to 22,000 attendees in just four years. And if you go you’ll see why; they throw technology at ‘engineering serendipity’. Which means they try and ensure that the events you attend (in and outside the conference) allow you to meet the people who are most likely to be ‘right’ for you. Google this to find out how they do it.

Secondly, property people are great at networking, but normally only with people just like themselves. We live in Eli Pariser’s ‘Filter Bubble’. At Web summit you would be exposed to a parallel world, where everything changes in just the time it takes to conceive and complete a decent sized property development. The cream of this archetypal ‘smart and lazy’ industry will be there and you’ll get a feel for why ‘retail is dead’, ‘the office is dead’, and ‘the end of self driving cars’ might not be such fanciful notions.

Web summit is where the true believers in ‘software is eating the world’ get together. And what they are doing will change the requirements across every property class. What happens there in November might not affect you immediately but I guarantee any notions you may have about ‘business as usual’ will be severely challenged.

And of course you can follow the Google dress code; ‘you must wear something’. No need to pack that suit.

Antony

Originally printed in Estates Gazette 12th September 2015

Real estate brands in the digital age

August 2016

$10 billion. That’s the valuation put on co-working operator WeWork when the company raised $433 million a couple of months ago. Up from the $5 billion valuation when they raised $355 million just one year ago. Operating from 35 locations, they lease about 3,500,000 sq ft of space at an average rate, it is reckoned, of $40-50 per sq ft. Against this it is estimated, given their membership rates and occupancy levels, that they are taking in circa $100 per sq ft across their portfolio.

In contrast Regus operates 2300 business centres across 106 countries and is valued today at circa $3.9 billion.

What are we to make of this? Should one just scoff and mutter ‘This is madness – dot com bubble 2’? 100 times earnings. For someone that just sub-lets space?

Well maybe, maybe not. A full real estate cycle will give us the answer to that. The really interesting thing to consider though is why are they being valued at this level, as that tells us much (perhaps) about the future of work and the office market.

There are two key justifications, both functions of how technology is changing the economy. First, the rise of the contingent worker. Intuit, in their 2020 Report, suggest “contingent workers will exceed 40% of the (US) workforce by 2020” and it is unlikely that this will be very different in the UK. Cloud computing, the changing nature of work, and hyper efficient networks will lead pretty much to where Charles Handy suggested with his writings on the Shamrock Organisation. In which case, that is an awful lot of people who will be routinely working for more than one employer, and so not going to the same corporate HQ each day. However, as we’ve discussed before, just because you do not have to go to a workplace to do work anymore, that does not mean you do not want to go somewhere.

And that brings us to the second key justification for WeWorks valuation; Brand. What they have done brilliantly is create a brand around their co-working spaces that has the potential to become a generic term. Think vacuum cleaner, think Hoover. Think taxi, think Uber. Think a space to work, think WeWork. “WeWork is a platform for creators” is their tagline, and frankly it is genius. Within the tech world they have huge mindshare. If you are a young company, or an established company desperate to show how much you get the zeitgeist, then WeWork simply springs to mind when you need space to work.

In startup parlance they have achieved perfect ‘product/market fit’. They have not branded their properties, they have branded their UX, their user experience. This is the reverse of how the traditional real estate industry works, where developers tend to brand their individual buildings, and do so with physical attributes in mind. Branding the what is analogue thinking, branding the why is required in a digital world.

Antony

This post was first published in the Estates Gazette 8th August 2015