A report this week by Clifford Chance and Concrete VC has highlighted this to me yet again.
I must say firstly, it is a well-balanced report and despite it being about the commercial sector, the conclusions and the results have solid grounds to be discussed here. Not least because the 41% of C-suites taking part in the survey cited “wanting to see others do it first” as a major barrier to adoption.
“Many organisations do not want to be early adopters, instead adopting a fast follower strategy, with C-Suite respondents citing that they want to see others try technologies first as their overall largest concern” the report summarises at one point.
I am dumbfounded by this sort of a statement. Firstly, it shouts of weakness. Secondly, it speaks also of stupidity and a complete naivety in business.
What on earth are you going to learn from businesses doing it first? Are they going to shout how wonderful a particular solution is? Are they going to tell you what they did right or wrong in the onboarding process? Are they going to admit they got it wrong or had to write off a load of bad investments?
No, no, no and no.
Last year, we launched a PropTech procurement solution to help the property industry find solutions they needed. Quite often they weren’t aware of the problems they had so often it was led by areas they wanted to improve e.g. “I need an improved property management function”.
We would go out to market and find solutions from the 8,000+ we analyse around the world and serve them back with solutions for them to trial. It has done well and we have helped many companies both large and small.
The thing is we, as a firm, decided we needed to keep it anonymous (and free) in order to get buy-in from the industry as otherwise we knew it wouldn’t work so well. This way their competitors wouldn’t know what they were looking at doing and solutions they were looking to find for a competitive edge.
However, we knew this wasn’t ideal but was necessary. Waiting for other people to do it first is, quite frankly, the stupidest and weakest excuse for leadership I have ever heard. The biggest mistake anyone can make is sitting around doing nothing. You are learning…nothing.
I think I have made my feelings clear.
Let me summarise other findings from the report before I continue down the rabbit hole of disbelief. Remember this has a commercial bias, but there are certainly key bits to draw out here which I believe can be important learnings.
Transaction process – origination:
• Nearly 70% believed that listing portals would become a more important source for deal origination (Amazing statistic in my mind as commercial portals just haven’t really made purchase in the commercial world).
• 70% of respondents thought the use of alternative data (e.g. taxi pickups, people tracking and consumer payments data) sets would increase, with 59% of these being the C-Suite and senior professionals. Only five percent of respondents thought alternative data sets would be less important in the next few years.
• 90% of respondents believe building personal relationships would be as or more important than before - travel restrictions have meant that real estate players have relied on existing relationships as trust has become even more important - I have always said about the importance of the personal relationship. Now and in the future. It is what we are good at. We need to double down on this skill set and use tech to augment the rest of the operation.
Transaction process – underwriting:
• 67% of all respondents felt technology will be increasingly important in underwriting, particularly as real estate valuations are a key issue and more problematic in the current conditions.
• 73% of all C-suite respondents thought that scenario planning tools would increase in importance.
• 70% of all C-Suite respondents thought that digital twin technology would increase - such a very important tool in the armoury and expect to see more and more of this coming through the residential development market too.
Transaction process – due diligence:
• Only 14% of all respondents thought in-person site visits would increase in importance, with a majority of respondents believing their importance would stay the same.
• 84% of all respondents thought that virtual reality/video fly-throughs would increase in importance.
• 91% of all C-suite respondents thought that drone-based inspections would increase in importance.
• 78% of C-Suite Respondents thought that the application of artificial intelligence and machine learning for extracting information from building documents would increase in importance.
Transaction process – execution
• 65% of all C-Suite respondents thought that the exchange of paper contracts between lawyers would decrease.
• 76% % of all C-Suite respondents thought that automated legal document assembly tools would increase in importance.
• Just over three quarters (76%) of all C-Suite respondents thought that smart contracts would increase in importance.
Despite my frustrations at the start, there are some really interesting conclusions drawn from this report. I think the audience surveyed are showing some real maturity in learning, but perhaps not the doing.
This report was done at the height of the Covid challenges and it does show that the decision makers are coming around to the idea of having technology fuelled companies that underpin the operations.
This really pleases me obviously and combined with the draft recommendations I am currently seeing from the British Property Federation (I am part of the Technology Steering Committee), there is real progress in terms of advising on how to approach innovation. These will be out shortly so keep an eye out for them.
But. But. But. If people just sit around waiting for others to innovate and try and learn lessons from others, nothing is ever going to get done and we won’t move forward.
For once, don’t say after you. Just stride on through and lead please.
*James Dearsley is a leading PropTech influencer and commentator, and is co-founder of PropTech platform Unissu. You can follow James on Twitter here.