Duke Long, the prolific commercial real estate blogger and personality, recently published an article titled “#CRETech is a Complete Failure. And Here is Why.” First, I would like to say that I am a huge fan of Mr. Long. He recently followed me on Twitter, I excitedly told my wife the news and she game me the “And this is a big deal why?” look that all wives seem to master. But, while I agree with his disappointment in the innovation so far in the commercial real estate space, I think he is wrong. CRE tech is not a failure, it is just on the brink of reaching its next chapter, one that should be a much better read.
In his rant Duke states “A simple part of the problem is that we are only going after the low hanging fruit.” I, personally, don’t see this as a bad thing. Who the hell climbs to the top of a tree when there is fruit to be picked from terra firma? Only when those easy profits are realized do entrepreneurs strive for more revolutionary, and exponentially more difficult business models. Uber, ultimately, wants to usher in a world where we don’t own cars, but just hire one from their self-driving fleet. To do that they had to start by going after the “low hanging” pain point of hailing a taxi.
Many of Duke’s gripes are valid. Many in the real estate industry still fail to see the value of the data that their building creates. No one is talking about the waste created by under-utilized property. CRE tech still has a long way to go. But to call it a failure is like saying a disproved hypothesis was not worth the effort of a scientific experiment. What has been done so far will be the building blocks for what is yet to come.
So instead of talking about the things that we are doing wrong, I want to look at a possible direction for the future.
I consult companies on their content strategy and my first question is always, “What is your story?” Not in the snarky, sarcastic way a teenager might say it, but really, “What is your story?” The reason this question is so important is that people don’t buy products, they buy stories.
Right now, if I had to give a story to most of the successful CRE tech companies it would be, “We make the real estate professional’s life easier and help them make more money”. This is a tested B2B storyline, but it is not compelling. Look at the CEO’s of other tech companies. They talk about changing the world, empowering individuals and maximizing resources. All the while, gadgets and websites are small potatoes when compared to the buildings that we all live, work and play in. 40% of all energy is consumed in buildings. 40% of all landfill waste is from construction.
The lack of message extends past the CRE tech world, it is a problem with commercial real estate as a whole. Brokers compete with each other with the size of their networks, not on their stories. You might be a hotshot at your awards banquets, but the truth is, those outside the real estate world see brokers as an unfortunate, interchangeable necessity. They need to learn the truth. A good broker can help both sides of a transaction make good decisions. They can protect hard earned assets and help businesses grow. But that is not the story most brokers tell. If I asked most clients what story they thought their real estate professional was telling it would probably be something like, “I just want your commission.”
There will be a new era of real estate. I think that tech will be the thing that gets it there. Don’t worry, there will still be plenty of money to be made. From here on, the tech we create will tell a story. Now we just have to decide, which story do we think the world most wants/needs to hear?