PropTech: What is it and how to address the new wave of real estate startups?September 17 2018
Author: Vincent Lecamus
It’s the new buzzword. PropTech is coming and is about to disrupt the real estate industry. But what exactly is PropTech? Why has it been such a news item lately? What does PropTech mean for real estate professionals? Who will be affected? What are the issues at stake? Between automatisation and uberisation, PropTech is both threatening and promising. Here is what you need to know.
2 years ago no one talked about PropTech. Yet, many real estate startups were already gearing up to disrupt the industry. A few of them, such as Zillow in the US, have been doing it for a long time; others are still trying and will keep on trying. But today the landscape has changed. PropTech is the talk of the town. The market moves at a faster pace. First off, let’s define this trend.
WHAT IS PROPTECH?
I have had the opportunity to discuss the topic extensively and have found that there are many ways to define PropTech. Here is one of the most widely shared views, by James Dearsley.
Proptech is one small part of a wider digital transformation in the property industry. It considers both the technological and mentality change of the real estate industry, and its consumers to our attitudes, movements and transactions involving both buildings and cities
It is a somewhat vague concept, but one that clearly affects a wide spectrum of the “real estate” sector. Indeed, here we are talking about the commercial side of the industry as well as the construction side, and even about the buildings and cities of the future. No wonder entrepreneurs, investors, and journalists are so eager to claim ownership of the trend. Many have attempted to provide a plain language definition of what it encompasses. In my opinion, the best and most straightforward definition is as follows:
« It’s a collective term used to define startups offering technologically innovative products or new business models for the real estate markets.”
In short, it stands for all the companies that are taking on the real estate industry to make it better, spurred by an ever-changing digital landscape and new consumption patterns. It is still a new trend, and its scope will surely evolve as time goes by. Today, several verticals emerge within PropTech: the real estate market per se (PropTech), smart cities and buildings, the sharing economy, the home building industry (ConTech) and finance (FinTech). Both ConTech and FinTech have very close ties with the real estate industry. Of course, none of this is new. But with many sectors now being “uberised”, real estate has become a prized target, especially for investors.
HOW SHOULD REAL ESTATE PROFESSIONALS ADDRESS THE RISE OF PROPTECH? WHAT SOLUTIONS CAN BE OFFERED?
All in all, it’s pretty straightforward. It begins with the realization that change is real and inevitable and will happen with or without real estate professionals. There’s no reason to fear change though, all you need to do is embrace it and keep working with your clients — current and future. Here are a few helpful tips to guide you along the way:
- Keep up with industry news: Read specialized websites regularly. The more informed you are, the better your ability to anticipate changes in the market and meet the needs of your clients wherever they happen to be.
- Invest: Invest in equipment and marketing tools so you remain up to date as far as technology is concerned.
- Experiment: You’re in luck. You have existing clients and you are out in the field everyday. Test new tactics and find out which ones are successful.
- Innovate: Each week, spend a minimum of 2 hours thinking about how you might improve the way you work or client satisfaction. This will ensure you remain competitive in the marketplace, no matter what happens because of PropTech.
- Work on your added value: This is key. Try answering the question: “Why do clients come and see me?” Once you’ve formulated the answers, make sure you deliver on them consistently so clients won’t want to go elsewhere.
- Keep in touch with your clients: Go the extra mile. Ask your clients for feedback. Would they recommend you to their friends? Why not? The best way to improve client satisfaction is by serving your clients’ needs.
- Keep up with the younger generations: Remain open-minded and mindful of their changing consumption patterns. Younger generations are tomorrow’s clients.
Do not forget: The key is to keep up to date and avoid denial. Today as a real estate professional with a portfolio of clients, you are in the best position to know and anticipate their needs. Innovation and technology won’t succeed if they don’t fulfill clients’ needs. So if your clients are satisfied, technology and innovation are not necessary. It’s up to you to address your clients’ needs. Technology is only a means to an end.