Living in California in the early noughties I witnessed (in my days as an accidental software developer) a lot of the tech innovation that followed the aftermath of the dot-com crash. When I reinvented myself as a VC investor in London in 2009, the property market and world economy had just imploded. But, this time, I was ready to navigate it with my battle scars and the wisdom that comes with it.
Just like the tech industry back in the noughties, I observed a property industry in churn where a lot of bright, talented people were idle and looking for new ways of doing things. I thought back to businesses such as Skype and LinkedIn, which both launched during the dot-com recovery, and felt that new property businesses were bound to emerge from the doldrums. This has been the blueprint for the seven new property companies I've backed since 2009.
But the drivers for property innovation in Britain go beyond just market churn. There is now a cluster effect in London; the result of its safe haven qualities, which has brought together the world's best, brightest and wealthiest, creating one of the most sophisticated property ecosystems in the world. In many ways, London is to the property sector what Silicon Valley is to tech.
At the same time, we have also seen a massive influx of international tech talent who are forming their own community around Silicon Roundabout in Shoreditch. These tech entrepreneurs are here in London to meet people from other sectors and solve problems in inefficient industries with unimaginative incumbents. Zoopla, and more recently, commercial online agency Appear Here, are prime examples of this collaboration between the old and the new. These success stories have been an inspiration to both property and technology entrepreneurs alike.
What's interesting is that it is people coming in from other sectors who have created this innovation. Alex Chesterman, the founder of Zoopla, for example, first founded an online DVD rental service which eventually merged with Love Film. No doubt he drew on his lessons from the subscription e-commerce space, and connected those dots with the gaps he identified in residential property classified advertising.
Being a generalist without any preconceived notions of how things should be done makes me more open to trying new things and entering new sectors with a fresh perspective. My advice: if you're looking to create an industry beating, category redefining business model, team up with someone from outside of your sector. People from other sectors are not boxed in by traditional ways of thinking - and the debate you're going to have about challenging the status quo - will create disruptive ideas. Those that straddle two different industries innovate by connecting dots that wouldn't otherwise be connected.
I absolutely believe there should be more marriage between the suited and booted' property people and the T-shirt wearing tech guys. I personally shuttle between my HQ in Mayfair to trendy cafes in Shoreditch as I've made a conscious decision to be at the epicentre of the renaissance that the property industry is going to go through over the next few years. Zoopla was part of the first wave, but I believe new ventures like eMoov.co.uk for online residential agency, FixFlo for online property management, Property Detective for online property research, and the Bizzby app for the sourcing of handymen and cleaners, are the beginning of the new renaissance.
Of course, businesses don't have to be tech related to be innovative. You could marry property with law, finance, or even alternative energy. That decision is down to the vision of the entrepreneur and the problem they are looking to solve. I've invested in an investment advisory firm called 90 North Real Estate Partners. They are a blend of property and finance professionals who have taken advantage of Islamic investors' appetite for UK property by structuring Shari'ah compliant real estate investments. Not a technology solution at all, but one that responded rapidly to changes in the property fund management industry.
Zoopla, founded in the aftermath of the Credit Crunch, is the champion of inter-sector marriage. They have recently hired a major investment bank to explore growth opportunities for the business, with one option being an IPO that would potentially value the business at £1.3 billion. I'm convinced that a billion pound business could not be built in just five years with insular thinking from the property sector alone. For the estate agency sector in Britain to really flourish and for Property 2.0 to really come to life, we need to seek out more of these inter-sector collaborations.
*Faisal Butt is Co-founder and Managing Director of Hamilton Bradshaw Real Estate, a venture capital firm he founded with James Caan to invest in entrepreneurs with property related ventures. He's a former winner of Shell Livewire's "Young Entrepreneur of the Year", a recipient of the much-acclaimed Skoll Scholarship, and holds an MBA with Distinction from Oxford University. Follow him on twitter at @FaisalButt_.
Comments
If London is so wonderful then why are there trillions of cameras trained on each individual. I do not want to live in a fish bowl.