The last frontier: Prop-tech. 11 Trillion dollars in excel. WTF did I just read?

Software is eating the world.

Things are going from atoms to bits.

Everything that can be connected will be connected.

This was the starting point Stronghold had when we met them. Stronghold is a wonderful entrepreneurial company started by Urban Edenström who is a legend in the Nordics within real estate. Having challenged the status quo for 2+ decades, he was quite used to managing risk and mitigating changing times, the ups and downs of the market.

Stronghold is an active starter and owner of companies within real estate. They own Newsec, the market leader in property asset management with over 35m sq.m of property in the Nordics (they do not own the buildings, but manage them). They also own Newsec Advisory that is the partner in the industry when it comes to transactions, valuations etc. They own NIAM — a private equity fund in property development. In the 2000’s they also started and to date own Datscha, the leading data aggregator and intelligence platform for those working in the industry. The last few years they have invested in some small companies to understand and learn.

Stronghold group in numbers since their start in the 90s

When we met the leadership team at Stronghold and all the daughter companies in 2016, the pattern was clear.

• The owners wanted the company to get on the digital bandwagon

• There were structural challenges within the organisation from the way they were organised to how they worked with data (in silos) to the need to unleash more intrapreneurs — in essence, the mindset, skill sets needed and the new structures to make this happen.

At the same time, the number of Proptech companies started bloating up. From a few companies in the globe to 1000+ companies in the whole space within 12–18 months, the new entrants started raising significant rounds of capital, and attack inefficiencies that can be solved with technology and new business models.

While this tale is not new, we typically see the following when we meet companies going through this:

Thanks to my friend John Ekman who summarised how companies feel in this phase.

However, as is common with most brave leaders, Urban and Daniel Kraft (who is his right-hand guy within prop-tech and the brains behind their effort within prop-tech), realised they needed to move in the artillery into their organisations, but do it with care.

The care needed was:

• Build ownership within the management teams of all companies
• Create a platform to understand people’s fears but inspire and lead with vision and a clear why
• Get people to co-create a support unit that would address key challenges with laser focus
• Pull the carpet out in certain key areas but do it with their customers, so to co-create constantly instead of doing it in silos
• Finally, create a platform for employees to learn and understand the responsibility they needed to take to drive the change they needed to see.

George Westermann 6S framework was useful in this context to understand how to navigate the complexity with different companies, management teams, roadmaps and talent pool.

This is exactly what we have been doing since then.

• A management lab where their top management could work in new ways, understand and co-create how a support unit could help them build this new strategy and focus

• A co-creation lab with their key customers around the region, where we build a joint innovations roadmap based on mutual challenges

• Find external companies that can solve these challenges with new technology or business models, run high-speed pilots in their customer’s buildings with teams of intrapreneurs from Newsec and get metrics

• If a pilot is successful, start creating infrastructure and scale them into more buildings and integrate them into the line organisation

• Of course the last part was a mess when they started, but with more pilots, the gaps began to get clearer and needed to be addressed with better roadmaps and investments in infrastructure that brings business and IT together

• During the same time, they also opened an innovations platform for their employees to test new ideas and try experiments with select customers, get data and see if they can be integrated into the organisation

• The gaps within the organisation and structure also became clearer. While it was evident before, it was apparent where they could start investing and how they could plug in the gaps. The HOW became crystal clear. Instead of hoping a big investment would help, they knew exactly how and where they could stage it.

• They started the Nordic Proptech Association to become a focal point for the established and the new proptech companies in the region to meet, network and exchange knowledge.

• They started investing in other proptech funds around the world to get a deal flow for pilots and sit close with tomorrows stars to learn and understand how they can build this future.

Example of our timeline that we worked on with different tracks per company, going from internal management support to working with customers

Since then the following has happened:

• Over 15+ pilots with customers, many being integrated & scaled
• 250+ employees working 1 day to get an understanding of the mindset and new skill set relating to experimenting and MVP needed.
• 120+ employees going through 6 weeks of building prototypes, testing and integrating them back into the Org.
• Investment into a US-based proptech fund
• A whole new governance model that sits within proptech to evaluate and make decisions faster for pilots
• A rework of their strategy and focus per company to put digital up front and centre
• Revised hiring plans to build more knowledge centres within their line organisation.

Stronghold is taking on the 11 Trillion dollar industry and starting to connect those atoms into bits, moving it 1 excel row at a time into the future.

We are proud to be working with Daniel and his team to create real estate services of tomorrow.