10 Questions to Ask at CREtech NYC 2019
CREtech’s annual event in New York is one of the best places for commercial real estate professionals to get up to speed on the progress tech companies have made over the past year. It’s an exciting time, the success of conferences like CREtech is testament to real estate’s rapid embrace of PropTech.
And yet, technology and real estate companies often speak different languages, which leads many professionals to feel like they’re trying to drink from a fire hose.
One major problem is buzzwords. Terms like “machine learning” and “artificial intelligence” are easy to throw on marketing materials but don’t tell landlords much or help them differentiate platforms. Worse, the real-world applications of these terms actually represent amazing technological leaps that could greatly benefit real estate companies.
This time, instead of simply asking “so, what do you do?” here’s a list of questions that can help cut through the noise to identify the platforms that can deliver real value.
1. Where Does the Return on Investment Come From?
Instead of simply asking what the return on investment is, try to understand the different ways in which the technology can impact the business.
If the goal of the technology is cost savings for example, does the solution attack a specific line item, like utilities, or a host of operational and capital expenses? If it presents opportunities in multiple areas, are there additional costs to the landlords to realize the full spectrum of savings?
This is important for the same reason as diversifying investments. Solutions that depend on one source of value creation may work well for some properties but will likely not move the needle across the portfolio.
2. Who Are Your Customers?
This question may seem obvious and superficial, a simple test to make sure that the technology has been commercial successful enough to attract and retain a list of recognizable clients.
However, pay attention to the answer closely, it can be very revealing. Are the clients all commercial real estate portfolios? Do they buy, develop and/or operate the same types of assets? Do they have similar investment strategies?
As Kevin Shtofman pointed out in How to Identify Tech with Exponential Value Potential, the value of most PropTech solutions is derived from the data that it is built on and from who contributes to the intelligence of the platform.
Some data is generalizable, but to see significant returns, the insights derived from the data must be specific, and that means derived from sources that match the profile of the end user.
3. Where Does Your Data Come From?
At this point, everyone understands that data alone is useless, that value comes from the insights that data can uncover. But in general, these insights are not the result of smarter algorithms, they are the result of more and better data.
What’s the tech company’s approach to capturing more and better data? Why couldn’t another tech company, or even the portfolio itself do the same?
If the data is all publicly available, how can they guarantee they will have better access than their competitors? If the data needs to be imported from the spreadsheets, how much cleansing and setup is involved? If the data comes from IoT sensors, how many data streams per building are being captured and what systems are being covered? What’s the mix of qualitative and quantitative data?
4. How Big is Your Aggregated Database?
Now that you understand where the data is coming from, it’s important to understand how big the aggregated database is.
Assuming that standard protocols are in place to anonymize data and scrub personally identifiable information, the aggregated database is a tremendous source of value, unlocking features such as industry benchmarking and pattern recognition.
For instance, building automation systems often rely on thousands of sensors placed throughout the property. However, if the software is hosted on the internal building servers, the data is trapped and there is no aggregated data from the portfolio or across the industry. The best pattern recognition in the world couldn’t do anything with only one building’s data.
5. What Can Your Tech do That No Others Can?
This naturally flows from the previous question. It is exceedingly difficult to make significant improvements to the status quo without a unique dataset to pull from.
This question also gets to the heart of the solution. What does the tech company believe is worth investing in to create differentiation between themselves and their competitors?
Put another way, what exactly can be unlocked using your data that makes this technology a “need to have” instead of a “nice to have”?
6. Who Does the Analysis?
There’s an issue with leveraging a unique dataset to unlock insights that would not be possible otherwise. The fact that it is unique means that analyzing the data will be an unfamiliar exercise for the end users.
Simply exposing the data to users does not guarantee that the analysis will be performed or that value will be generated.
How does the company address this? Is the technology coupled with a managed consulting service? Is it purely driven by algorithms? What is the mix of automation and personalization?
7. Who Are the End Users?
A common issue with adopting technology is the fact that the decision maker is often not an end user. When this is the case, there is a chance that the solution becomes siloed to one department and does not have a significant impact on the overall business.
Attention should be paid to both the type of information that is delivered and the way in which that information is presented to different stakeholders. Some users will interact with the technology on their daily mobile phones, others will only check metrics periodically from their office computer. What does this mix look like?
8. Do You Use the Tech Yourself?
This may not always be applicable, but it says a lot about a company that does not use their own technology whenever possible.
Here at Enertiv, we developed a Survey App to quickly record important information about the mechanical and electrical infrastructure of a building. We are confident sending it to potential clients because we use it internally.
9. What is Your Vision For the Future?
The rapid pace at which the commercial real estate industry has shed its image of being slow to adopt technology has been driven by solutions that address existing pain points. This was a critical and necessary first step for the industry.
However, technology is now promising to revolutionize how buildings are constructed, bought, sold and operated. Those who do not have a long-term tech strategy will risk being outcompeted by the companies that are making more data-driven decisions across the board.
What is the technology company’s vision for the future? How do they plan to expand on their current capabilities and infrastructure to drive more value and fit into the larger trends in the industry?
10. How Will You Get to That Vision?
It’s not enough to say that the company has the best software developers around. What is their secret sauce that enables them to innovative consistently?
The truth is, as a technology company, it’s almost impossible to exactly predict what the product will look like in the future. It depends greatly on customer’s ever-changing needs and on the pace of development of ancillary technologies.
What have been the most recent product developments and how did those come about? Is this a repeatable process? Will it keep up with the rapid pace of the industry?
These questions should help get to the bottom of each tech company. Even if you’re not going to CREtech NYC, there’s no reason these questions can’t be asked over the phone or at the next conference you attend.
If you will be at CREtech NYC, come to booth 41 . If not, schedule a demo to ask us these questions!