In this blog post, we will be exploring the ‘three waves’ of PropTech which takes us from the late 1980s to the current day. We will also be looking at the current approach, how it is selling clients short and what can be done to prevent this third wave of PropTech being best remembered for causing technological indigestion.
The First Wave
It’s amazing to think that although Excel was developed in 1987 when many of the PropTech founders, including me, were in short trousers, it remains the backbone of the work of many asset and facilities managers.
A few years after this, specialist software for real estate started to be developed. This was the first wave of PropTech and suppliers often started with one discrete area such as accounting or marketing. Solutions were installed locally and typically worked on a perpetual or quasi perpetual licence. As customers demanded ever more functionality, the scope of those systems grew from in-house development to acquisitions or both!
The Second Wave
In the late 90’s to early 2000’s, there was a genuine gamechanger, facilitated by the ability to deliver software as a service, through the cloud. This change was heavily supported by the spread of broadband and companies like Salesforce shifted the way in which businesses procured and consumed business software applications.
The Third Wave
More recently, a third wave of PropTech has appeared, offering a range of discrete solutions with each targeting one part of the value chain. The residential sector has taken a lead on this, as its wider reach means that it is more likely to touch people who both encounter a pain point and feel able to resolve it.
Additionally, mobile-first and cloud-based solutions have also been able to reach users who reside outside of a property company’s physical environment. In Fixflo’s case, users include occupiers, insurers and contractors who until relatively recently would not have been able to access interfaces to internal workflows. Importantly, it is in large part the spread of smartphones that has enabled the third wave of PropTech.
These discrete applications typically have low barriers to adoption, user centric design and a laser focus on doing one thing - and absolutely nailing it. In the words of Jim Collins, they adopt a ‘hedgehog strategy’, these applications dominate the one thing that they can be truly excellent at.
What's The Problem With The Third Wave?
For all the beauty that its user interface may bring, this wave of PropTech risks being best remembered for system indigestion, typified by multiple logins and data silos.
It’s incumbent on suppliers and consumers of PropTech solutions to push past this current reality, to one in which the best of both worlds can be achieved. Discrete best in class solutions must inter-operate seamlessly so that data aggregation works for the benefit of property companies rather than solution providers alone.
The Fourth Wave - the property stack
I’d like to present an alternate future which I hope will become the fourth wave of PropTech. This fourth wave will be founded on interoperability and data flowing between applications - to create a property stack.
There is no best solution in abstract, only one that is best for a particular client at a particular point in time.
Each organisation, or even each division within an organisation can have its own best solution comprising a number of discrete applications. This is predicated on property companies having a digital strategy with a CTO, architecting the solutions they need. This will also be supported by discrete application suppliers and mature single system suppliers, working together to facilitate ecosystems via APIs. It’s important to note that in this context, IT is not a support function but instead is a key commercial and strategic driver for the company.
It's not just theory, we have technical integrations via APIs with 18 complimentary software providers in the UK, one in South Africa and are working with prospective partners in other countries.
With the likely multiplication of inputs and data points, from what we are working on alone (which includes IoT devices, text driven chatbots and Alexa powered chatbots) it is clear that the need for a shift in mind, from walled garden to ecosystem, is necessary for anyone wanting to work in this space.
Without aggregation and analytics, data points are largely useless. With aggregation and analytics, they can drive operational efficiencies, risk mitigation and above all, human happiness.