I was delighted with my personally inscribed advance copy of PropTech 101 by Aaron Block and Zach Aarons, co-founders of New York based VC Fund Metaprop which Aaron was kind enough to give me at MIPIM. Having followed Metaprop on social media, Aaron seemed an ideal panellist for the Department for International Trade MIPIM session on proptech innovation that I had been asked to chair, so we got to meet in real time. Our stellar panel included Oli Farago co-founder of Coyote, Gab McMillan founder of Equiem, JLL’s Guy Grainger and Sally Jones Head of Strategy at British Land. Aaron arrived weighed down with copies of his new book for the whole panel!
Although the book is rooted in the New York proptech scene, the international reach of proptech means that many familiar names from UK proptech adorn the pages. Indeed, the book’s first endorsement is from our very own Antony Slumbers who praises it for providing a ‘mental map’ of a rapidly evolving world. New York based Duke Long, known as ‘The godfather of proptech’ writes, ‘There is no other book that will help you gain a better understanding of where proptech has been where it is now and where it must go.’
So this is a handbook and guide to the proptech revolution now unfolding at an unprecedented speed. I have detailed some of the key messages but I echo the comments above and recommend you get hold of a copy and read it for yourself.
The scene is set with important basic lessons such as the need to keep close tabs on the tech trends likely to affect your business. The proptech revolution is about a new mindset that values innovation and focuses on customer experience. This change of focus is a bit of a stretch for an industry that hasn’t been at the cutting edge of change and innovation and which fears experimentation. The growing internationalisation of real estate has driven the adoption of tech as global trends now have a ripple effect across the world.
This book is a must read for anyone who is interested in proptech, which surely must be all of us involved in real estate! It is practical, easy to read and packed with case studies and interviews. Although illustrated by the experiences of US businesses, there are many parallels to what we are experiencing in the UK. Also, most of us who follow proptech will be as familiar with the exciting proptech start ups in the US as we are with our homegrown businesses.
It is easy to forget that 10 years ago there wasn’t a proptech community in New York or London. After years of being ignored, proptech is now seeing a wave of new venture capital with the lion’s share of investment in the US. Real estate represents a huge $38 trillion in the US alone.
A useful chapter describes how Metaprop classify the early stage proptech start ups they invest in, dividing them into the different stages of the real estate life cycle. This helps underline the function of each start up. The approach is similar to that taken in our recent British Property Federation and Smart Cities Catapult report. ‘Lost in translation: How can real estate make the most of the proptech revolution?’
The book is packed with wisdom from proptech entrepreneurs. I was particularly struck by a comment from Convene Co-founder and CEO Ryan Simonetti on the importance of timing. You have to ask ‘is the market ready to adopt my idea today or am I too early?’ If you bring it to market too soon it may fail. He cautions patience and an understanding that property companies will be faced with huge costs and disruption if they choose to adopt the wrong tech. Also examined are the problems of valuing a startup with a new proposition when there are no comparisons. Investors such as Metaprop with their in-depth understanding of both real estate and tech are able to act as translators.
The book stresses the importance of what the authors refer to as ‘community’. They explain that investing in proptech startups quickly moves into mentoring, recruiting and making introductions. This is certainly something we have experienced at Mishcon de Reya where we are into the 3rd year of our own tech incubator, MDR LAB. An integral part of Metaprop’s community is offering accelerator classes for startups which include connecting entrepreneurs with property companies and funds. It is also clear from the book that Metaprop have an enviable network of collaborations across the proptech world including, I noted, with London based RICS in relation to Metaprop’s PropTech Global Confidence Index.
There is an invaluable international resources directory of proptech related organisations. Acknowledging the exponential speed of change, it is intended to be a starting point and will be updated regularly on the book website. It includes everything from events and associations to VCs and research. A library of due diligence tools and checklists for investors will prove useful for investors.
The book generously shares some of the lessons learnt, pointing out that for a property company, building your own tech platform is rarely an option so partnering is common. To handle technology, every real estate company, however small, now needs someone in charge of tech and ‘in today’s fast moving world the IT guy no longer cuts it.’ Tech needs to become an underlying principle and in order to engage with startups it’s best to cut out bureaucracy and to be nimble. Startups do things differently and attract the top talent so engagement with them encourages innovation and helps in house talent develop. An underlying theme and one that has come up on the proptech groups I am involved with, is the importance that startups focus on the problem that needs to be solved.
We are at the start of the proptech revolution and there are plenty of threats and opportunities. ‘Proptech can be a threat to incumbents but to the open minded it also becomes a way to counter threats’. And as the authors admit, investment in proptech is a mix of science and art.
But every single start up mentioned in the book is improving processes and/or making money for its corporate partners so I'd argue you cannot afford not to be up to speed.