APREA-RICS PropTech Conference 2018: Adapting to the revolution
The inaugural APREA-RICS Property Technology Conference 2018 convened key players and stakeholders to address key challenges and the need to adapt to be “future-ready”.
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16 APR 2019
How will technology influence the development and management of the built environment over the coming decade? KP Reddy, Founder of Shadow Ventures, shares his thoughts on proptech opportunities.
I always tell people I'm an engineer first, entrepreneur second, and investor third. I was bred for this business in a way. My dad was one of the top structural engineers in the country and my mom was a computer programmer.
I started and sold my first startup when I was 19 studying civil engineering at Georgia Tech. My second startup went public when I was 27. After that, I decided I didn't want to start another startup. Instead, I wanted to focus on building a portfolio of startups.
In construction tech and property tech, I saw there weren't a lot of serial entrepreneurs. Most of these startups were led by first time entrepreneurs who needed guidance. The level of coaching and capital needed to help these companies take off was much more hands-on than what's required when investing in start-ups run by more experienced entrepreneurs.
So we started our Labs program about a year ago and currently have about 37 startups in our Lab from all over the world.
Part of the challenge is to build technology that is important and technically challenging, versus a workflow tool or a workflow app. We have to start truly innovating and building products again. I would say technology needs to look like magic. If it doesn't look like magic, it's not technology. So, we need to start building some magic.
I think as an industry we're a little bit behind on the materials science side of things. When you look at new applications like 3D-printing, it has a lot to do with nozzles, mechanics, and computer vision. We tend to forget that materials science is a very big part of that innovation. There are some interesting opportunities in materials science.
We're going to start seeing some innovation around building delivery. What does the future look like for architecture firms, property management or engineering firms? Will it still look like a bunch of people sitting at their desks, drawing things, or does it look different? Firms have the opportunity to reinvent themselves or move from being a professional services firm to a tech-enabled firm.
We have to start truly innovating and building products again. I would say technology needs to look like magic. If it doesn't look like magic, it's not technology. So, we need to start building some magic.
One of our companies, InfoTycoon, is providing an asset management product for the multifamily industry. Commercial properties usually sign five-year leases but for multi-family properties, leases are typically only one-year. This requires a constant re-invention of assets to attract more residents. InfoTycoon is very focused on treating the assets with a level of detail to be able to manage it as an asset class. It's great for everybody, not just economically of course but from a sustainability perspective. And when an investor buys another apartment building they already understand what the asset value is and they have a record of all the maintenance activity and incidents performed.
The next company is a recent investment called Icon 3D out of Austin, Texas and they do on-site 3D-printed houses. Their model is to print a house in 48-72 hours for under $10,000. They're actually doing it right now in El Salvador and other markets. It's powerful work.
Another company we have is called Amenify, which manages amenities for multifamily properties. A lot of properties don't have the amenities that are in demand. In fact, 84% of residents are either paying for amenities they don't want, don't have access to the amenities they need, or both. Amenify is augmenting the property with third-party providers. So maybe you have a property and it doesn't have a gym but, in the app, you can access a gym down the street and it's seamless. It allows properties to provide great resident experiences and in a fully integrated approach.
There's definitely a conservative culture around adopting technology. One of the challenges we have in our industry is understanding who your product champion will be and who makes the buying decisions. Our industry runs so autonomously on a project by project basis. The best you can really get is the CTO saying, "Let me introduce you to some project managers and see if they're interested in buying right now."
The challenge is that a Project Manager on one project may be super conservative, and the project manager on another project is less conservative. That's one of the major challenges to adoption.
We need a methodology to build a better process to pilot startups and innovation quickly and efficiently. If it's not going to work today, let me know it's not going to work. I'm going to go talk to the next person. Having a solid plan to onboard new technology is super important.
The author of this article, Robert Herman MRICS, is an RICS Chapter Committee Member, NorCal.