REAL ESTATE TECHNOLOGY(PropTech): A Founders Perspective!

per-spec-tive 1. a particular attitude toward or way of regarding something; a point of view.

The real estate industry could be considered the most elusive sector in the world that has collectively and historically avoided disruption. But, why? Especially when Harvard Business School Professor Arthur Segel says, real estate is the largest asset class in the world. The value of housing in the United States alone is over $16 trillion. And, real estate is the greatest source of wealth for most families. So, why have investors and technology been so slow to gain traction in this industry? Given my diverse 20 years of experience in real estate I have my thoughts, but I also agree with Arthur Segal who believes that the real estate business has become increasingly INSTITUTIONALIZED, SECURITIZED, AND PROFESSIONALIZED. This is the foundation of my “WHY” the real estate industry has historically been so difficult to disrupt.

THE CHARACTERIZATION OF INNOVATION

First, to create the plot and theme for this discussion, lets display the 2017 facts and stats:

• There are 2.3M people in the United States with a real estate license
• There are 1.2M REALTORS in the United States
• There are 1.1M Real Estate Agents in the United States
• 63% of REALTORS are female, that’s two thirds of all REALTORS
• The median age of REALTORS is 53, down from 57 in 2015
• REALTORS that are under 30 years of age was 4% in 2017
• In 2015, only 2% of 1.2M REALTORS were under 30 years of age
• Most REALTORS, real estate is their second or third career
• 43% of REALTORS that are men, are 60 to 65 years old
• 57% of REALTORS that are women, are 60 to 65 years old
• The share of REALTORS that are 65 years old or older is 17%, a drop from 25% in 2015
• In 2017, the biggest purchaser(36%) of real estate in the United States were Millennials(22 to 37)

*The data above tells a vivid story that writes itself. What opportunity or story do you see in the data?

Harvard Business Review demonstrated that, the Average Age of a Successful Startup Founder is 45. SHAMELESS PLUG: If you were wondering, I’m currently 45 years old and I’m the Founder of Ask DOSS. But seriously, why might this be? As mentioned in the Harvard Business Review, although there are many other factors that may explain the age advantage in entrepreneurship, they found that work experience plays a critical role. WORK EXPERIENCE!!! Relative to founders with no relevant experience, those with at least three(3) years of prior work experience in the same narrow industry as their startup were 85% more likely to launch a highly successful startup. Why am I pointing this out? Because the real estate industry is way too COMPLICATED, MASSIVE, and POLITICAL to not have the experience and understanding of how to navigate a successful proptech startup to unicorn status. Unlike other tech startups, this sector is much BIGGER than just having a great IDEA!

Unicorn startups like Airbnb, Snap, Uber, and many more were started by young founders creating an idea based on a classroom project in college to building a solution that frustrated them via an experience like catching a cab. These startups were created by very conscious tech founders that identified a problem and knew how to code their solution. These ideas didn’t require any significant amount of industry experience! These startups didn’t require data feeds! With the eventual exception of Uber, they didn’t have to deal with licenses and regulations! These startups don’t have to worry about DODD FRANK! A real estate technology(Proptech) founder MUST have a comprehensive understanding about the real estate industry in order to successfully build a great idea around or within the rules that govern the industry. The real estate industry WILL NEVER be disrupted by a kid in their garage, or a kid that NEVER worked in the real estate industry to gain some degree of understanding via the laws, licenses, processes, regulations, and systems that could literally implode a great startup idea. #neverSAYnever

REAL ESTATE HAS MANY LANES OF POSSIBILITIES

There aren’t many industries that are as dynamic as the real estate industry. There are so many different ways to make tons of money in this industry. This fact alone is one of the many reasons why “real estate” is so slow to evolve. DON'T YOU DARE MOVE MY CHEESE! Different startups are attempting to evolve or disrupt different fragments of the real estate process and transaction. Proptech is so wide, vast, and young! Eventually, the startups that solve their fragmented problem(s) the best will consolidate via merger and acquisition to align themselves with what I call the real estate singularity. However, right now, the real estate industry consist of many niche segments that generate billions of dollars in annual revenue solving their specific problem. The list below could easily be broken down into over 100 different sub-sectors that display the many ways to make money in real estate:

• Commercial Real Estate
• Residential Real Estate
• Commercial Building
• Residential Building
• Commercial Leasing
• Residential Leasing
• Commercial Sales
• Residential Sales
• Construction
• Developing
• Rehabbing
• Flipping
• Blah, Blah, Blah…..

Tech is independently and specifically being created for Agents, Appraisers, Brokers, Builders, Buildings, Landlords, Mortgages, Title, etc… But, what is the “REAL ESTATE SINGULARITY” moment? What’s the end game? What’s the HOLY GRAIL of real estate? I believe it’s when a platform or system built on an Intelligent User Interface(IUI) can, Commercial and/or Residential, bring everything together in an end-to-end seamless process that doesn’t require users to click in and out of several different applications or websites to successfully search for properties, purchase and sell properties, manage properties, and facilitate the closing of transactions all in one place. Until an “Airbnb or Uber” equivalency type of proptech marketplace presents itself, investors are going to continue throwing money in a million different directions hoping one or two of their bets hit as they wait for the dust to settle. Then, money will eventually consolidate and get behind the apparent and superior technology to mobilize(much like Uber) a worldwide real estate marketplace that can streamline the entire process anytime, anywhere, and from any device.

SUPER INTELLIGENT PERSONAL ASSISTANT(S)

There is a plethora of research that shows how and why intelligent personal assistants are the future of searching for information, requesting service(s), and to assist us in better managing our lives both personally and professionally. That’s why companies like Amazon(Alexa), Apple(Siri), Google(Google Home), IBM(With Watson), and Samsung(Bixby) have invested billions of dollars to ensure that they are an early player with market share in this space. When you really understand each of these “GENERAL” intelligent personal assistants, they all have a unique approach to expanding their current platforms by leveraging this technology to solve different problems. From being a traditional B2B player, a dominate search engine, a personal assistant in your pocket(smartphone), to the largest online retailer in the country these tech giants definitely have a vivid agenda and the desire to continue dominating their sector for years to come.

Ask DOSS, focusing on a narrow domain, is an intelligent personal assistant for ALL THINGS real estate. We believe each industry will eventually have its set of intelligent personal assistants that consumers around the world primarily use to fulfill their specific needs, purchases, services, or tasks. DOSS is a real estate personal assistant that answers all of your real estate questions, delivers information accurately and instantly, and promptly(like Uber) connects you with a local service provider when you are ready to tour properties, write contracts, and help manage the transaction to a successful close. Eventually, Ask DOSS will also help you service your home among other things.

Most people don’t realize, unlike other technology, that this type of development takes time. It took Amazon four(4) years to develop and deploy Alexa to only its Amazon Prime members before making it widely available in the United States on June 23, 2015. As of November, Amazon now has approximately 5,000 people that work exclusively on Alexa around the world. In a fall 2010 AI Magazine article, IBM researchers reported on their three(3) year journey to build a computer system that could compete with humans in answering questions correctly in real time on the TV show Jeopardy. IBM Watson wasn’t commercially available until 2015. The original(first) intelligent personal assistant was Siri. The creators of Siri was developing it through 2005 and released the app for iOS in February 2010. It was acquired by Apple two(2) months later. Siri was then integrated into the iPhone 4S and released October 2011.

When built comprehensively and correctly, an Intelligent Personal Assistant requires hundreds of thousands of hours of coding, developing, and scripting thousands of queries and even more responses. Not to mention aligning all the property data-sets, integrating API’s, MLS and Non-MLS data, and making sure everything functions at an optimal level across Android, Desktop, and iOS. It’s a reason why these tech giants with an endless runway of capital and talent took an average of 3 to 4 years to develop and release their version of an intelligent personal assistant. It’s not about throwing out some random rushed MVP that pisses off users because it can’t answer anything or routinely gives the wrong answer(s). Or, not understanding your question(s) and giving you an answer that has nothing to do with what you asked. The objective is to ensure that every utterance and response has a favorable accuracy rating. If the accuracy rating on an utterance scores too low, just like Alexa, Cortana, Google, etc… someone must manually make sure the next time that question or series of questions are asked, the user gets an accurate response rating to our satisfaction. Ask DOSS has a two(2) year developmental lead, per our use case, to radically simplify how people research, search, sell, and service properties throughout the country. Once we re-release Ask DOSS in 2019, just like Alexa and Google Home, the evolution and growth will be exponential.

What are your thoughts about the overall landscape of PropTech?

www.AskDoss.com