“Simplicity is the ultimate sophistication.” So said Leonardo da Vinci, a man who knew a few things about problem solving. As the application of technology and digital innovation to solve problems within the real estate sector continues to dominate strategies across the board, the power of simplicity comes into increasingly sharp focus.
Of the many efficiencies offered by real estate tech, using digital technologies to expedite long-standing processes remains one of the most business critical. And while the rationale behind this strategy is simple, actually implementing the right tools for the job remains a challenge.
Fitting then, that this should be the discussion point for our latest episode of Tech Talk Radio. EG Head of Content Emily Wright was joined by Teresa Lee, vice president of Roundhill Ventures, managing director of Search Acumen Andrew Lloyd and Marcus Moufarriage, founder and chief executive of Ility to talk about how even the simplest ideas need careful execution.
“It is pretty well known that the real estate sector is quite behind in tech adoption,” said Roundhill Ventures’ Teresa Lee. “That means a lot of the things we are seeing now are what we perceive to be quite simple. But that also means there are a lot of opportunities to move the needle quite quickly. So, it is a great thing the technology is here, even if it is a little behind other industries.”
Ility’s Marcus Moufarriage agreed adding: “I think it’s a good thing there is movement at all because there has certainly been a tendency for owners and the real estate sector more generally to say 2we took the risk, we built the building. Now we are getting 20% and we will just go to the Cotswolds and come back in 15 years when your lease is up and renew you. It used to be a very light touch and very low service. But that’s changing.”
Search Acumen’s Andrew Lloyd said: “There has been no real pressure on the industry to change until recently. If you look at any sector that has gone through modernisation or digitisation it always starts with the simple, time-consuming things first and then moves its way into more complex operations. But you have to do the simple stuff first.”
True. But that doesn’t mean it is any easier to tackle these problems in the first instance. Steve Jobs once famously said: “Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple.”
So, how can the real estate sector clean up it’s thinking?
The answer really comes down to necessity. The panel universally agreed that the pandemic has left real estate with no choice but to innovate and, by default, find that simpler state of mind and start to break down straight-forward problems. The biggest challenge will be separating out the tech companies with something to offer, and those cashing in on an industry now under intense pressure to change. Quickly.
Search Acumen’s Lloyd said: “There are lots of firms jumping into the space. There are many solutions to problems that don't exist out there.”
Ility’s Moufarriage agreed although added that the pressure is on the tech side fo the equation too, now more than ever. “It always amazes me that the smoke and mirrors gets as far as it gets,” he said. “I don’t think 2021 will be the year things unravel but I think next year it probably will for those who can’t actually deliver when real decisions are being made. Ongoing uncertainty means that decision-making process is a bit stalled right now so I think there is still room to wing it a bit. But if you are out there not really solving a problem and what you offer is not digital transformation but is just dressed up as that then the cracks will start to show.”
So those are some of the pitfalls. The panel also took some time to consider the signs of success. How does a real estate business measure how impactful their tech strategy has been? How do they know when they have played their cards right?
“Question number one, are we still in business?” This is how Search Acumens’ Lloyd would kick off the analysis. “Have we survived? Are we able to trade and continue to be successful in our market space? Are we winning market share over our competition? Is this tech working for us as an investment?”
Roundhill’s Lee added: “You need to set very specific goals for whatever technology you are trying to implement. So if you are implementing a new property management system, then you should know what you expect like decreasing the cost by 25%. The goal should be as tangible and specific as that. Treat it like any other project.”