Here be good dragons – PropTech captures the popular imagination
By all accounts, the manic recent publicity around the hotly emerging PropTech sector is the ‘tipping point’ we’ve all been waiting for in the industry.
Let’s be honest, when a technology niche gets its own Dragon’s Den-style events (the recent PropTech Den and PropTech Innovation Challenge), it is going places. We’ve also seen the first academic study of the PropTech industry (by Oxford University), and even Andy Murray is in on the act with a growth PropTech investment portfolio.
Yes, I think it’s fair to say PropTech has arrived.
Class of 2016
It hasn’t always been like that. Reports point to 2016 as a watershed year, when global PropTech investment in the first three quarters ($2.1 billion) exceeded the total investment figure for 2015 ($1.7 billion). Whereas companies had been finding it tough to hire talent before, the buzz and momentum of 2016 showed more people suddenly understood the scale of the opportunity.
One of the most famous graduates of Proptech’s Class of 2016 is hybrid estate agency Purplebricks. Mixing online and offline elements, Purplebricks uses the Web and ‘gig economy’ principles made famous by Airbnb to opt out of expensive offices and instead hire local freelance property experts to advise buyers and sellers.
What is PropTech?
But what is PropTech really? Convenience apps? Listing websites? Online estate agency services? Yes, it’s all these and more. But look deeper and you’ll see that PropTech is not just a loose moniker for any technology-delivered service, whether new or replacing/augmenting a physical service. What these companies have in common are two important things:
– Firstly, PropTech companies are usually start-ups – if not exactly born yesterday, then in the sense of being technology ‘natives’. Purplebricks may be a hybrid, but it started out that way. It’s certainly possible to convert or enhance your real-world service into a tech-enabled one, but various examples have shown that embarking on a digital transformation journey either requires invasive surgery or singular focus, in which the new business either takes over ‘the old one’ (not easy) or develops separately from the old one, either in the form of a partnership with the old business or as a ring-fenced innovation arm.
– Secondly, PropTech companies are fleet of foot. The well-documented special powers of technology enable them to reinvent business processes and even nullify existing business models, and to do so quickly and cheaply as overnight market entrants.
For example, there’s the service that puts mortgage advisory services online and opens it up to consumers. ‘Pure play’ online and hybrid agencies have taken the game to the big listings websites and high street agents. And Airbnb has taken a lot of private letting stock out of the market.
Opportunity, not threat
But despite being viewed solely as a threat by many, PropTech can be a force for good in the industry. For example, many PropTech companies help estate agencies attain efficiencies and grow their businesses through automation of their business processes.
One such provider offers a bank-integrated financial accounts environment, automating agencies’ bulk payments and providing real-time bank-grade statements and dashboard views of debtors’ and creditors’ paid-up status. This replaces a host of time-consuming, resource-intensive, paper-based and even location-specific processes in the form of banking, accounting and property management tasks.
Ultimately, PropTech automation is an unstoppable force that should be embraced to free you up from the admin and inefficiencies of the old ways, so you can grow your business without throwing extra resources at it.
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