“Success for the real estate agents and brokers of the future – both commercial and residential – will be 50% data analytics/needs assessment and 50% superior customer service.”
Josh Guttman from Softbank and Shai Goldman hosted a great event this past Tuesday and invited some of the most interesting innovators in real estate and construction tech, namely Rich Sarkis from Reonomy, David Eisenberg from Floored, Doug Chambers, the founder of FieldLens, Riggs Kubiak from HonestBuildings and Marc Siden, who represented OnBoard Informatics.
The (seemingly) slow evolution of tech in real estate and construction
Technology has been disrupting (improving) every single industry, yet both real estate and construction always seem to be falling behind, into the category of late adopters. Which is where the conversation started. The consensus among the panelists was that it is mainly the generational change that is driving more innovation in the space. I would mention two other factors here. One, the tech industry was more interested in other areas and did not think that either construction or real estate was sexy enough. I don’t have the exact VC numbers, but I have a feeling the data would back me up on this. Secondly, some industries tend to embrace new technologies quicker than others, because of both the nature of the business and the people in it.
Data and Business Process
Rich Sarkis made a lot of great points. First time I am meeting him and I was very impressed with both the substance of his comments and the style in which they were delivered. One of the observations he made was that more and more data is becoming available to us, almost too much. Additionally, local government and municipalities are becoming more and more transparent, 47 of them now run on open source platforms. The main challenge, in Rich’s eyes, is how to structure the data and make the right data available to local governments, real estate brokers, owners and builders.
Within the process, he outlined three steps:
- Data Collection
- Delivery of select data to end user
I spoke to Rich after the event and we both agreed that one of the things that is often not mentioned and not given enough consideration is the good old business process. Data and technology can only take a company that far if they don’t have a solid, clear and well-engineered business process. I have seen many cases, while consulting, where companies spent a lot of money on software and technology, having very unrealistic expectations in terms of what it can and cannot do. Last, but not least, just like Rich said, it is not having data that is the most important – it’s being able to properly analyze it and to apply it that matters most.
The Great Disappearance of The Real Estate Agent (aka “The Middleman”)
David Eisenberg from Floored was another panelist who had some insightful comments. What stuck with me the most was his articulation of the idea that Internet – being a disrupting force aiming at eliminating the middleman and shortening the distance between the buyer/consumer and the seller/provider – is poised to eliminate the role of the real estate agent. Both him and Marc Siden weighed in on the topic.
I both agree and disagree (a comment I shared with the group during the Q&A session). I think that the role of the intermediary in real estate will be changing and will have new requirements. In my opinion, success for the real estate agents and brokers of the future – both commercial and residential – will be 50% data analytics/needs assessment and 50% superior customer service.
What does this mean if you are a buyer, owner or investor? Make sure that whoever you work with is tech and data savvy, understands data and knows how to mine it and present it to you in the right way. I use dashboards, charts and scores when I work with my clients because it makes it so much easier. Very soon this is going to be the only way of doing business. Of course, the human touch will never – and should never – be replaced and the personal service will always be needed, certainly with the the higher end, HNWI clients.
Real Estate Tech 2.0
After the 1st wave of innovation pushed by Zillow, RedFin, Trulia and StreetEasy both prior to the recession of 2008 and in the years after, we are now clearly in the 2nd wave, especially in commercial real estate where most of the disruption is expected to happen. Josh Guttman discussed that at length on his site less than a month ago – highly recommended reading ( “The Impending Opportunity in The Real Estate Market”, http://goo.gl/kWMOra). I do think that there are more opportunities to be explored in the residential market as well.
All in all, a fantastic event, hopefully first out of many Fireside events. Kudos to both Josh and Shai for organizing it. Things are heating up in real estate – and not just because of the prices.