Do not create barriers to new business models. That’s what this is all about. And while this piece of advice is today aimed at property professionals and businesses, the best way to assess the damage of deterring innovation is to consider a broader picture.
Look at Uber and Airbnb. Both companies find themselves, or have previously found themselves, in a complex position: they have the full support of the population, yet are being slapped with legislative deterrents, designed to temper their market-grabbing potential.
Uber has had well-reported struggles with Transport for London and the Mayor of London’s office, only just managing to maintain the right to operate in the capital. Meanwhile, Airbnb continues to be thwarted by government legislation that states one can only rent out their property for a maximum 90 nights of the year.
Despite this, both companies have the vast majority of the population supporting them. Sure, there are small circles who voice complaint and concern, but you’d be hard pressed to find a soul today who hasn’t, at some point in their life, been a patron of Airbnb.
As such, we have a situation where innovation and citizen mentality change are moving faster than legislation and the legal battles to overcome it.
Despite being some of the biggest businesses in the world, and despite having the people on their side, legislation - supposedly put in place to support the interests of the public - is actually, in many ways, working directly against their will.
What the government has done in both of these cases is believe its actions to be protecting the integrity of competition, when, in reality, it’s thwarting the progress of innovation.
This is what we see happening in all levels of real estate. Believing that they are protecting their integrity against technological rivals, many firms fail to make progress, fail to match their competition, and then, simply fail.
The recent news of Purplebricks leaving Australia and the departure of Michael Bruce is interesting in the context of this article. Something has clearly gone wrong - commiserations to all involved - but this downturn in fortunes should not act as a deterrent for others to try something similar in the future.
Despite many voices in the industry spending the past few years shouting and screaming at Purplebricks, warning the world of its damaging, flawed intentions, the company has found remarkable success; at least in the eyes of some.
It is, however, likely it has expanded too quickly. This, combined with what the board calls ‘some execution errors’, has led to a disruptive new business model seemingly falling apart. It could, as some are saying, be the beginning of the end, but it’s unlikely.
More likely, it will learn from these mistakes and realign its plans in the UK. However, even if Purplebricks does soon collapse, it has obviously been doing something right.
There are elements of its business model that can be admired. As I wrote last week, failing must always be followed by trying again in a reviewed, adapted way.
Just because Purplebricks has done it wrong, online agency can still be made true, at least in some capacity. If the public wants it, none of us should ever deter its progress, certainly not for self-serving reasons. That’s the key part, though; ‘if the public wants it’.
If the public wants this certainty of pricing. If the public wants an easier way of doing things, these are what we should be drawing on. Purplebricks may not have got it 100% accurate but there are lessons to be learned here and you should be understanding what it has done right, not downplaying (a nod to last week again) what it hasn’t.
Do encourage people to be your champions
Instead, we should encourage progress in the areas of market transformation that the public, the end-user, is calling for.
People love Uber, TfL was scared of them. I got into a black cab the other day and watched the meter rise by 20p every five-seconds, regardless of whether the cab was making forward progress. The total was almost double that of an Uber.
What TfL should have done from the start is learn what it is that people love so much about Uber, understand the value, and then work in collaboration to encourage an efficient, safe, and competitive ride-hailing marketplace in one of the world’s busiest cities.
One could argue that Uber failed to encourage external champions around their innovation. They should have worked to gain the trust and support of TfL from the outset, educating them on what their technology is capable of, the inevitable gains and the potential risks which, together, they can create solutions for.
Instead, they presented themselves as radical outsiders, upsetters, turncoats. Without external champions, they became outlaws in London. They failed, as I have written in a previous article in this series, to bring important people on the journey with them.
The job of encouraging external champions should be done by your internal champion. Many people think this person should be ‘young’, someone who ‘gets all this stuff’. But age is a feckless measure, it just needs to be someone who understands technology in the way you understand residential real estate.
Someone who is accepting of technological and able to encourage a fresh mentality throughout the organisation.
(One piece of advice, quickly: don’t simply default the role of internal champion to your IT manager if your IT manager was involved with building your existing legacy systems. I have seen it happen before, they become protective of their systems and deter others from looking for alternatives.)
An individual can get the ball rolling, the catalyst for accelerated change and progress, but, before long, the entire team must become champions of progress.
This is just one more reason why ‘pale, male, and stale’ management structures must be abandoned like Christmas trees in January.
Diversity is an essential ingredient of positive change, you need different kinds of people with different experiences, knowledge, and skills in order to encourage sustained innovation. Having a staff or board of ‘yes men’ isn’t going to help anyone.
Two recent examples of injecting new life into old dogs are the appointments of Jack Sibley and Darryll Colthrust as leaders of digital innovation at Nuveen and Palmer Capital respectively.
While they don’t totally usurp the stereotype of a high-ranking property professional, they have been bought in to give a stern kick up the ar$e to anyone who fails to demonstrate appropriate excitement about the oncoming and never-ending process of change.
In larger residential players, I haven’t yet seen such bold appointments. Perhaps this is a first step to review? Incidentally neither Jack or Darryll had extensive real estate experience before their appointments. Is this a trend, too? Employ great minds who can look at things differently and are not tainted by the status quo?
You can follow the path of encouragement in these appointments: someone has encouraged the board to investigate the potential of technology. Then, someone has encouraged the board that a director of innovation needs to be appointed. Next, someone has encouraged the interview panel to look for a young, energetic, and technologically-minded candidate, rather than letting the CEO open their address book again to pick someone they share the same members club with. Then, someone has encouraged the new director of innovation to spread the gospel of change throughout the land. And, finally, the director of change has encouraged others to embrace digital innovation now and forever.
At no point during this series of events was there any room for negativity or deterrents. That’s how you find success in market transformation.
*James Dearsley is a leading PropTech influencer and commentator, and is co-founder of PropTech platform Unissu. You can follow James on Twitter here.