7 Questions On PropTech That Will Make You Sound Like A ProOctober 11 2018
Don’t you hate when people from a sector use shop talk and expect everybody else to understand what they’re saying? I’ve never before had the opportunity to discuss proptech outside the real estate and construction space, and even within the industry, there is quite a bit of confusion on the topic.
What is PropTech?
Proptech is the acronym used to describe any technology for the real estate space. This can span software (property portals like Rightmove and Zoopla are considered proptech software!), hardware (for example, sensors), materials (for example, there was a recent news item on how special bricks are being developed to act as batteries for solar panels) or manufacturing (3D printing, offsite manufacturing) .
In day to day conversation, the term is often used to refer to startups in the space, though I tend to use it to describe the technologies themselves.
Why is proptech a hot topic in 2018?
PropTech is starting to get noticed because it is no longer a niche phenomenon. Though still dwarfed by its older cousin FinTech, investment in PropTech has soared sky high: from 186 million USD globally in 2011, to 2.67 billion USD in 2016. Data for 2017 shows that Venture Capital investments topped 12 BILLION USD last year!
Several other factors such as M&A, cross Atlantic investment between the UK and the US and traditional firms investing into PropTech also firmly point to the fact that it is here to stay.
Why does my landlord care about PropTech?
Investors care about PropTech because they see an enormous and as of now a mostly untapped market opportunity. But the reason this opportunity exists is that operators can extract top line and bottom line gains by implementing PropTech. In the residential space, for example, top line gains include revenue maximisation (either through price discrimination or greater tenant retention levels). Bottom line gains encompass all the savings (from better space utilisation, through lower marketing costs, to lower energy bills and more) that PropTech can deliver to a portfolio.
I hear a lot about Bitcoin, is that PropTech?
Well, no. But blockchain, the infrastructure which hosts bitcoin, can be! The blockchain is part of a family of technologies that I like to call "deep tech" – which is nothing more than technologies that are based on substantial engineering innovation. These are:
Artificial intelligence (AI)
Intelligence Augmentation (IA)
Machine Learning (ML)
Deep Learning (DL)
Big Data Analytics
The Internet of things (IoT)
You can think of blockchain as an alternative (and safe) infrastructure for things such as transactions (payments) agreements (smart contracts for everything from engaging a contractor to executing a property sale) and data exchange (know your customer checks, credit checks, etc). This is not just safe, but FAST, as in theory, everything could happen in real time. Real estate people are very excited about the savings and efficiency this could bring to a very slow and bureaucratic market, though we are still a long way away from everyday use.
Is Alexa PropTech?
Yes, she is! Alexa and other digital home assistants are an example of the foray into IOT, the Internet of Things. IOT is one of the most promising innovations in the real estate space. It is broadly defined as ‘a giant network of connected "things" (which also includes people). The relationship will be between people-people, people-things, and things-things'. Sensors are the glue that keeps these relationships together. According to the World Economic Forum "Technological Tipping Points" report, by 2022, there will be over 1 trillion sensors connected to the internet. As we become more connected, we produce more data, which can then be used for the planning and consumption of urban spaces and real estate.
Which type of proptech will make my life better?
That's a tough call. In the "deep tech" field especially, the technologies don't work in isolation from one another. IoT sensors will gather data, for example, that will be processed using big data analytics and made sense of and used to add value with AI. In this case, remove one of the three and the other two will be rendered useless to you as the user. However, from an end-user perspective, it is definitely the AI that you will notice the most, as it is what will provide the analysis (or the interaction!) that will make your life exponentially better.
Should I be worried about my privacy?
There are heated debates on the invasion of privacy that comes with an ever more interconnected world. There have been cases of Alexa sending information that it was not supposed to, for example, or blockchain tampering that raises questions on the security of that infrastructure and the data that will be stored on it. Privacy is a growing concern and we need to work had to stay ahead of those that would breach it. Though privacy does remain a concern, in the residential space there are many checks and balances being put into place to ensure that the data collected is put to use for the residents' benefit, as opposed to being harvested for financial gain.
Original article: www.forbes.com