PropTech before the hashtag - blind spot No 2

Thought leadership

30 years ago, I had just been given my first management role running a CAD department for How Engineering in the northwest of England. The company had invested in a 3D CAD product called Sonata by t2

CAD

The solution was truly leading edge with parametric elements that could be developed to form a 3D model of the building – structure, fabric and services. Within months my team were recreating building models and then designing building services within ceiling voids and plantrooms with ‘clash detection’ to avoid costly onsite installs.

The models/drawings were then printed, packaged and combined with equipment Owners and Manufacturers O&M manuals – (printed brochures back then), catalogued and then sent to the building owner for commissioning the building and then onward use during occupation and Facilities Management.

End to end, this sounds like Building Information Modelling (BIM) to me. The same outcomes are achieved in a different way. So, in 30 years have we really moved on and if we feel we have - what does it tell us?

My references to PropTech are largely associated with commercial property, in both the CAPEX and OPEX stages. It focuses on data in all its guises and onward use thereof. I cannot claim to have a complete grasp of the Residential Property solutions during the same past three decades – but this really useful article from the chaps at Rentr echo’s some of my own observations…..although it does seem that Proptech 2.0 and 3.0 describe technical solutions that overlap in their time span. Perhaps more 2a and 2b? http://www.rics.org/uk/news/news-insight/comment/a-history-of-proptech/.

Exogenous tech advances such as ‘the’ Internet and Mobile have impacted on BIM - Cloud, Connectivity, Mobile and IoT have all changed BIM for the better, but should the adoption BIM Level 4/5 already be widespread and commonplace? And 30 years on from 3D CAD modelling, I challenge we should we now be in the early adoption stage of VR/AR built, controlled and managed properties.

To balance this away from the tech debate; one could challenge the thinking that drives the technology innovation and adoption has not evolved either. What is the evolution of “a fully collaborative 3D BIM process” that was the BIM task group target for 2016. How about, All property built by 2020 should have a data model in compliance with PAS1192-3 Information Management in the Operational Phase - that remains with the title/ownership of the building and is a regulatory/mandated dataset that shall be kept current. Who or what is setting the business/process challenge for Tech to keep pace with? Or are we merely applying Domestic/Home tech into the Property world?

What endogenous solutions can the Property/Construction Industry offer to have driven the Industry forward? Property and Construction is not noted for R&D, so unless this changes our best bet is to look to exogenous tech innovation and then apply to ‘#PropTech’.

Throughout the nineties and early noughties, Commercial Proptech was inhabited by two spectrums:

  1. enterprise applications delivered by global software vendors, or
  2. low cost ‘home brew’ solutions combining LAN/WAN client/server apps. Both had their risks and challenges.

Option 1 was functionally restrictive and expensive. This was the world of expensive licenses andintegration consultants, litigation for failed large scale implementations and god forbid you suggested a custom developed application for one of your customers.

Conversely Option 2 led to too much flexibility with shadow solutions being developed by employees and data dilution. This was the world of somebody developing a MS Access database at home which then went on to run the company with all the risks that that infers a bit like the wild west.

Options 1 and 2 are the classic Centrist v Distributed dilemma.

Barring the ‘Smarter Planet’ initiative by IBM, were organisations global software vendors guilty of not watering the property technology garden in those decades? In fairness, why should they – property being just one of their industry verticals. Equally, did the industry itself rest on its laurels and choose the path of least resistance?

Bringing us up to date, does the recent explosion in Proptech start-ups mean that their focus is true and their innovation is laser guided to the industry they sell in to? I would argue yes, which is why we are now seeing an overabundance of supply.

Linked to the industry innovation and point made above, was the lack of progress driven by poor demand – i.e. too passive, a state of denial, or taking an ‘if it ain’t broke don’t fix it’ approach. I’ve written before that the ambition of the Property and Construction industry is lacking, so in my view we are exactly where we deserve to be.

During this historic period of PropTech treading water, you would think that we have got our house in order and developed a set of global industry wide property data standards and conventions to get our apples and oranges aligned. Think again. Property Standards and conventions are loosely applied – witness the (loose) traction of OSCRE, formerly PISCES and the International Property Measurement Standards (IPMS).

We recognise it all comes down to commercials and for ‘Proptech before the hashtag’, the price was NOT right. Using exogenous tech (domestic / home tech) and Cloud based SaaS helps keep the price point low, which has stimulated demand, but has meant that the entry point for suppliers is extremely low and we are on a self-fulfilling strategy to see R&D done by Amazon, Google and Apple etc.

This evolution reflects the Property workplace evolution where ‘work’ was a place, is now a ‘verb’ and will be a packaged piece of value irrespective of who, what, where or how it was created.

There are lots of veterans from the 90’s and 00’s still working in the industry and edging the industry forward. Personally, I feel it’s refreshing to blend this experience with the modern-day tech and innovative approach of the Proptech after the hashtag generation.

I must credit Magnus Svantegard of Datscha for the phrase “Proptech before the hashtag” who recently tweeted an image of the ‘October 2000 PikeNet Guide to Commercial Real Estate on the Internet’. The list shows several organisations – only a small of which are still with us today. I’m sure Magnus shared the list to show us just how many have been lost along the 17-year journey and more will follow in the coming months and years.

So to conclude: ‘Is Proptech before the hashtag’ a blindspot? – Answer: Yes, but a way that nobody wants to remember a bad dream.

Blog author: Michael Stephens, Head of Asset Intelligence at CDS: call +44 (0)78 0325 9672 or email via our contact form.

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