Drive Innovation Forward in Real Estate Industry
4 Suggestions to Make Real Estate Great Again
This article was originally published on Tech Estate Today. Check out TET for news and events on the intersection of real estate & tech industries.
I started my career in the real estate industry as an equity research analyst for a mid-size investment bank. I was assigned to the REIT (real estate investment trust) team and really had not had much exposure to this multi-trillion dollar asset class. However, after my four-year tenure of analyzing REIT stocks, dissecting the different asset classes (residential, multifamily, storage, office, retail, etc.) and identifying macro trends within the industry, I realized that the real estate industry was not as dynamic and efficient as it could be due to its lack of innovation.
The industry has not implemented new tools that could increase growth but instead has caused real estate’s future projections to even lag other sectors that have been historically resistant to technology — education and financial services.
So about three years ago, I set out to utilize my domain expertise and experience as an investor to help startups and accelerators as an advisor. But I first wanted to get up to speed on the trends, opportunities, and challenges of the real estate tech sector by reading as many articles as I could. So I set up a few Google searches to catch any and every article that could equip me with the knowledge to form my own thesis in the industry. Within my first two months of research, I quickly found that the current coverage of real estate tech was severely lacking in depth and foresight. Although, it’s gotten better over time with great insights from DisruptCRE and MetaPropNYC, my Google alert never fails to pick up generally subpar articles that don’t provide clarity or insights to a growing sector with high disruption potential.
Below are four ways in which I hope Tech Estate Today can help drive the industry forward (and if we don’t please call us out on it).
Agree on a unifying term
So fintech attempts to solve all problems a consumer or bank faces in the financial services industry, while edtech strives to provide products and services for ways in which individuals learn. Got it. But when I come across tech-enabled startups in the real estate industry, your guess is as good as mine on what industry they will be filed under in the media. Some use the term CREtech, but that is only for commercial real estate solutions. Others use PropTech, while another school of thought is to use Real Estate Tech. Regardless of the term, the industry utilizes, it would be best if the sector picked an umbrella term so that bloggers, operators, investors and researchers could share a repository of thoughts, trends, and events. My vote is for Real Estate Tech because it can encompass all happenings within residential, office, and real estate lending. It will also provide clarity for outside interest (like I was three years ago) to easily digest what is going on in the industry.
Examine reasons for challenges in the sector
Many real estate tech articles state that technological advances have changed the way we have lived in almost every aspect of our lives but real estate. Some articles may even share what the challenges are in the industry, but rarely will they provide context on why technology has not been implemented in the industry. As a contributor to Tech Estate Today, I plan to examine the questions of why real estate agents aren’t incentivized to utilize more tech or why founding teams without real estate experience are at a severe disadvantage to selling their product even if they have built a superior technological solution.
Share practical advice on how startups can overcome challenges
I’ve found that the typical real estate tech article shares bright spots or successful startups that are going to make a splash in the industry. However, there is never any advice on how the startup made traction or strategic steps the founding teams took to position themselves for success. This is a key desire for my work on this publication because as startup advisor and early stage investor in the space, I see a lot of the same problems arising from first-time entrepreneurs in this sector. Bloggers shouldn’t just share the “top ten” lists of companies that will disrupt the real estate industry but they should also share the “top ten” steps to building a strong real estate tech company.
Provide data-driven hypotheses on where the industry is going
Ok we understand that the industry has been resistant to innovation due to certain characteristics of the sector. But, I found myself when reading those articles, looking for more ideas and opinions on where the sector was going. Was this a fad? What sub-sectors are over saturated? Which will be more regulated in the next ten years? How will emerging technologies like AI and AR/VR impact the way we build, live, and sell real estate? There is more data than ever in the world and I hope to use it to share a view on where this real estate tech industry will be in 10, 20, and 50 years.
Earnest Sweat is an Entrepreneurial Engineer for Camelback Ventures and an Investor in Residence for Backstage Capital. If you have any questions or requests please connect with Earnest through LinkedIn or Twitter.
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