I once read an article posing this question: Are You Adapting to Commercial Real Estate Technology Quickly Enough?
As an investment banker helping technology companies (including those in PropTech) secure growth capital and pursue and close mergers and acquisitions, I understand why leaders in the real estate sector can be slow to adopt new technology. However, the reason is not as industry-specific as you might think.
Certainly, in real estate, information is viewed as a competitive advantage so leaders perceive risk in sharing it. Additionally, any number of PropTech technologies promising cost savings or increased revenues have not worked out, making everyone wary of the next shiny object.
Yet founders, owners, CEOs and investors of real estate technology companies would be wise to examine how technology is adopted by business in general before buying into the idea that unique beliefs and experiences are the primary causes of slow adoption.
Here’s a historical perspective:
In 1982, the world was abuzz with the arrival of the IBM PC the year before. I remember hearing how “astonished” everyone was by how quickly these new machines were appearing on the previously expansive and uncluttered desk space of corporate executives. Some tech watchers even proclaimed the widespread adoption by corporate chieftains of this new and powerful tool.
The reality? PCs were largely ornamental boat anchors sitting on desks. Administrative staff would print emails for executives to read and then take dictation as the executive responded. Not only did PCs run afoul of the time-honored way of conducting business, but executives lacked the basic typing skills necessary to use them.
Fast forward ten years.
Tech writers talked about the remarkable transition that had taken place in corporate America. PCs were the norm. Executives were typing a few of their own emails and some were using electronic calendars.
Those who had originally relegated the PC to the toy category had finally adopted this new technology. Or had they?
It wasn’t until up-and-coming executives (those in their 40s in 1982) recognized the usefulness of the PC that the corporate world began to leverage its potential. Now in their 50s and holding positions of authority, they demanded the use of PCs, expected communication by email, scheduled meetings electronically and a few even become rudimentary users of spreadsheets (as opposed to merely reading the output).
It happens again and again. Over a ten-year span, a portion of the old guard retires or dies and a new generation of managers rises up, bringing their technologies with them and demanding company-wide use.
With Millennials entering positions of influence and authority in every sector, the real estate industry is at an inflection point. But the new guard has very different expectations regarding the availability and use of technologies.
They and the generation on their heels largely believe information should be widely shared and (frequently) free. For them it’s not the information itself that’s valuable, but the analytics applied to it that create a competitive advantage.
I share these insights about the shifting attitudes and beliefs of today’s real estate industry professionals to reinforce the importance of understanding the new guard. As history shows, they are the ones who ultimately provide technology companies with a foothold to success.
Your time as real estate technology company will be far better spent re-positioning your offering to attract them over re-hashing why the old guard is slow to adopt.
