There has been a lot of chatter about PropTech over the last 12 months. Although it is a new moniker, PropTech’s not as new as you think – Rightmove came to the market 17 years ago. Whilst it stood unrivalled for years, fast-forward to 2017 and PropTech is booming. With tech terms that sound like jargon, PropTech is still unfamiliar for many of us in property. But as such a fast growing area in property, it’s worth knowing the basics of who’s who and what’s what, especially with MIPIM approaching.
So, first things first, what is PropTech? I liked LendInvest’s definition as ‘the wave of companies using technology to refine, improve or reinvent the services we rely on in the property industry to buy, rent, sell, build, heat or manage properties’. Whether the problem is one at the beginning of a building’s lifecycle or at the end of it, PropTech simply refers to any tech that solves any problem for property.
Let’s start at the beginning with A, for Augmented Reality, or AR as it’s called. AR combines the real world with enhanced computer generated content, changing what you see, hear, feel, or even smell. Familiar AR includes Pokemon Go, Google Translate and Snapchat.
Whilst it’s hard to see how Pokemon’s tech applies to property, Microsoft’s AR Hololens is easy. Presently on trial, their self-contained, holographic computer could enable several architects to work together on a building’s digital design; or as a way construction firms could send instructions to on-site employees whilst leaving them ‘hands-free’.
Artificial Intelligence, or AI, simply relates to machine-based intelligence. One example is IBM’s AI machine which error checks contracts, currently under development with a magic circle law firm. Unlike humans affected by hangovers or baby-led sleep deprivation, it’s able to plough through thousands of pages in a fraction of the time needed by a human, and with an almost 0% error count in accuracy.
NYC based MetaProp – a leading light in the US PropTech scene – recently predicted we’re months away from seeing the first commercial real estate transaction on Blockchain. Simply put, blockchain is a public ledger where transactions are recorded and confirmed anonymously. It’s the tech that powers cryptocurrencies so they are regulated fairly as decentralized (non-regulatory) methods of payment. Blockchain’s a fascinating subject and brilliantly explained in a non-jargon blog here.
Whether through radical business models, hardware products or services, PropTech is big business. What becomes apparent is how they’ve spotted a chink in the chain, and created a tech solution, that’s now rapidly gaining market traction. Here are a few startups disrupting some of property’s biggest players:
Hubble connects startups and freelancers with fixed or flexible workspace solutions.
Appear Here offers short-term retail rentals and pop-ups by linking retailers to landlords.
Purplebricks lets you oversee each aspect of your property transaction, live and on-demand.
Rialto offers a platform for professional brokers and commercial real estate landlords to collaborate in real-time.
Virtual Commercial is the UK’s first online commercial estate agent running on flat fees.
Unsurprisingly, the US PropTech industry has some very exciting B2B startups emerging, as MetaProp’s recent accelerator cohorts show with Flip, a peer-to-peer marketplace that allows tenants to trade leases legally and flexibly, and RavTi, the digital tagging system that automates HVAC operations.
Wherever you look, there’s scope to disrupt. If this article has wet your investment appetite, then you’ll want to check out Early Metrics – a PropTech startup challenging industry stalwarts such as Standard & Poor. The opportunity they saw was in flipping a business model around by focusing on growth potential, not the traditional method of rating credit risk.
For every element of the property world, there’ll be a startup developing a way to disrupt it.
It’s a challenging time to be a CEO without someone dedicated to managing innovation. Thus, despite being a very new role, I predict Chief Innovation Officers will become the hottest additions to executive management in the next decade.