Knotel has been called a WeWork rival, but their founder and CEO Amol Sarva is quick to shrug off that comparison. “Our business resembles Amazon or AirBnB much more than it does a company that constructs and leases spaces.” They like to call their offering AgileHQ because they outsource the work of finding and designing office space for companies of all sizes. Rather than forcing landlords to make big bets on long-term leases and large tenant improvements they form a partnership that includes a revenue split.
This symbiotic relationship with the building owners has allowed them to grow aggressively. “We make offers on every square foot available in submarkets we are interested in,” Sarva said. One of those sub-markets is the Chelsea district in Manhattan. This area has around twenty Knotel locations within a ten minute walk of each other. Amol thinks that this could grow to be hundreds. If you think that is ridiculous, you might want to consider this fact: in two years they have gone from ten thousand square feet under management to around one million.
The idea of partnering with property owners rather than competing with them has paid off. They have just closed a round of funding for seventy million dollars that values the young company at around five hundred million. Now they are taking that same ethos of industry-wide collaboration to try and tackle the messy world of property data.
To do this, Amol and his team plan on using the blockchain to create a truth machine. “The blockchain is a technology that helps you move truth around,” he said. “Something like one to two percent of real estate asset value gets taken by old school, offline entities like accountants, auditors, insurers and title companies. It is hopelessly stuck in a pre-internet schema.” While a few percentage points doesn’t seem like a lot it could represent around $9 billion dollars in New York City alone.
“The blockchain is a technology that helps you move truth around.”
The property data landscape now revolves around a few large companies that allow professionals to pay for access to their trusted data source. It takes all of the power away from those that put the information into the database and puts it in the hands of the company that distributes it. To Amol, this seems like a terrible way to try and solve a big problem, “Something that we have seen throughout human history is that if you put more eyes on a problem, you get a better quality solution.” He would rather open up the problem of creating a living database of all of the world’s property data to the masses.
While he stressed that the Knotel Koin was still very much a work in progress ( join the discussion in their Telegraph chat), they see the process of building a truth machine as finding ways to incentivize data input and forcing resolution to inconsistencies in building data. While the team has not determined the scope of the data, it would likely include things like property dimensions, lease history and public records (which can be surprisingly inconsistent).
The tokenization of the initiative should take care of the incentivization. Knotel “Koins” would not be on an exchange to buy and sell like many cryptocurrencies but would have a value. The contributors of new data would get compensated with coins that they could use to unlock other types of data. The value of the coins would go up as the project got more comprehensive so it would effectively make the earliest adopters the most highly compensated.
Forcing a resolution on inconsistencies in the data would have to be done democratically. Amol understands that conflicts are inevitable. “If 30% of parties involved think that a particular data point should be one number and 70% think otherwise, the system would take the info with more trust attached to it as the winner,” he said. He also realized that malfeasance is a possibility that needs to be addressed in order for trust to be given, “If a troll wanted to change data, like what happens in Wikipedia every day, then the system would identify them and spit them out.”
The Knotel Koin is ambitious, to say the least. They are trying to do what governments, real estate firms and tech companies have not been able to come even close to doing, to consolidate the world’s property data onto a single, unified database. There are huge interests that would hate for this to happen. Companies like CoStar base their entire business model on providing trusted data for a (hefty) subscription fee. Large brokerages see their deal database as a competitive advantage.
What Knotel has on their side is the possibility of giving the value of property data back to those that create it. Property owners, managers and agents put up the money and the time to verify and document global property data. They have never been able to extract value from that because, until now, the profit went to the publishers.
The internet tore down the funnels that brought general information to the collective conscience, causing the downfall of the traditional publishing industry. The blockchain might be able to do the same with large data sets. It puts the power into the hands of the masses that handle the data every day rather than a select few that have found ways to aggregate it. It relies on the power of the individuals instead of the financial incentives of large corporations. Whether it catches on or not hinges on your answer to one simple question: Who do you trust?