You landed the most amazing job: leading technology for a real estate firm. You can’t wait for your first day, and then it arrives… with a wide-open slate. How do you start building a proptech strategy for a firm that’s never had one before? Digital transformation is critical for real estate firms to advance and lead. Here’s a primer to get you started. Read on for the 6 steps to build a proptech strategy.
1. Start at the Top
Leaders of an organization exert tremendous influence. As such, committed executive leadership is critical to any new initiative’s success. Your proptech strategy must have at least one executive driving it.
The global pandemic showed which firms could be nimble and pivot quickly. Now, more than ever, executives need to embrace new ways of conducting business as usual.
Commercial real estate has lagged most other industries in adoption of technology. However, the pandemic accelerated technology adoption. Technology is pervasive in our lives and expanding. Younger generations expect to have technology and data at their fingertips. Increased innovation will include side benefits, such as improved recruiting.
2. Build from the Bottom
Once you have at least one C-level executive on board, you will have the greatest chance for success if you create a proptech strategy team. This would be a subset of the organization. Ideally a team member who can dedicate at least 25% of their role, if not more, drives proptech strategy. The team size may vary but should generally fall within the two-pizza rule. In other words, if it takes more than two pizzas to feed the group, then your team is too large. A small, passionate team is much more likely to take ownership of each task and achieve their goals.
Further, the strongest teams are comprised of the individuals whose roles benefit the most from technology. Often, those include analysts and associates. They will surprise you with how innovative they can be when you enable them to enhance their daily lives!
3. Identify Your Needs
“Technology is the answer, but what is the question?” As Cedric Price adeptly noted, you must identify the questions that you want to answer with technology.
Technology innovations fall into two broad categories. First are those that solve existing problems, such as Zoom for long-distance connectivity. Second are those that unearth problems, such as Apple creating the need for unlimited music via the iPod. You likely cannot predict what you do not know you need. But you can identify opportunities at your properties and within your organization.
First, create small groups of 10 or less to discuss 5-10 areas for improvement. Rank each from highest to lowest priority. Then, consider estimated timelines for which you would hope to see noticeable improvements. Have the proptech strategy team lead act as facilitator. This individual will have clear insight into all possible opportunities.
Finally, the proptech strategy team lead should rank the needs of the organization vs. properties. Have them present to the proptech strategy team for evaluation and approval. Keep in mind that not all opportunities require technology to resolve. Sometimes, a change in procedure will suffice.
4. Determine Your Budget
Once you have prioritized your needs, then you need to create a budget. Notice that this step falls after exploring your opportunities for improvement. You will be more likely to get budget approval if you already identified opportunities and cost savings.
Plus, this assumes you already have executive level buy-in per step 1.
5. Identify Potential Solutions
The myriad of proptech firms is overwhelming. Full stop. You may narrow the funnel of potential vendors by working with proptech venture capital groups. VC firms vet all potential competitors when they invest. However, proptech innovation moves quickly. By the time your firm wants to pilot a solution, another entrant may have eclipsed the VC firm’s portfolio company. Starting with the VC firm is an excellent option, but you must also need to do research.
Connecting with other firms about the technologies they chose to pilot and implement is hands-down the best approach. Given the nascent stage of proptech, you and your competitors will benefit from advocating for the best tools.
6. Track Your Progress
You must measure the success of your proptech implementations. This tests whether you achieved the outcomes the proptech strategy team hoped for.
Fortunately, some technologies directly impact net operating income. Others can be more difficult to attribute to reduced expenses or increased revenue. At the onset of each new implementation, identify the ideal outcomes of the tool. Then, track your progress towards those milestones. Jira, Trello, Asana, or even Excel will help you measure progress. The entire proptech strategy team needs access to the tracking tool. They also must be held accountable to the milestones set.
Successful execution also requires team members taking ownership of each implementation. You may find greater success in assigning certain team members to key projects.
By measuring progress, you will identify which tools work best for you. Saving these lessons institutionalizes your firm’s proptech knowledge.
In Summary: 6 Steps to Build a Proptech Strategy
I hope these 6 steps to build a proptech strategy were helpful to you. As far as timing, I recommend completing steps 3-6 on a quarterly basis. Depending upon your organization’s size, you may limit the proptech strategy team’s term to 2 years to ensure maximum employee engagement.
For more tips, be sure to check out our other blog posts. We’re always happy to help!