Head still buried in the sand over the proptech threat? You’d better pull it out pronto.
If proof were needed that it is a sector rapidly approaching a tipping point, look no further than the 19% rise in the share price of online estate agency Purplebricks on the day it announced its half-year results this week.
The success of online agents isn’t based on growing the size of the overall pie. It’s based on them nicking your slice and make no mistake: they will be going after a slab of the commercial pie next.
As Hubble’s Rohan Silva declares in our special feature profiling 10 proptech pioneers transforming the property market, the smartest agent in London isn’t a human… it’s a machine.
Silva argues online property marketplace Hubble, which he co-founded, offers a better service than agents and is confident that over time it will cut agents out of the equation.
“Jurassic at best compared with other professional services” - John Forrester on property
‘Pah! He’s overstating the threat,’ I hear (the ostriches among) you say. Cushman & Wakefield’s John Forrester doesn’t think so. Describing the industry as “Jurassic at best compared with other professional services”, he predicts that “in the foreseeable future, a significant number, possibly majority in time, of the currently unique human interactions will be disintermediated - generated and delivered either by artificial intelligence or by resources remote from the asset itself”.
Game-changing stuff. He adds two important caveats, however - that traditional agencies can, as Cushman is doing, see proptech as an opportunity as well as a threat and embed it in their own organisations and that there will always be a role for the “true expert”, with only the repetitive inputs, data collection and analysis that sit behind that at real risk.
In short, don’t see proptech companies as disruptors, see them as enablers - there to make life easier for you rather than replace you.
Disrespected, not disrupted
That is certainly how some of our other pioneers are keen to position themselves. Take VTS, which last week merged with rival US platform Hightower. Ryan Masiello tells me the company is focused on “solving the problems that slow agents and landlords down” and that its vision is to “create the single platform that streamlines workflow, communication and information that the industry can utilise to drive deal velocity”.
Indeed, VTS has “no intention of disrupting the market”, he claims, pointing out that its team “comes from the marketplace”. One of the biggest mistakes proptech companies typically make is “not respecting the strong culture of the industry”, he adds.
One of the biggest mistakes the property industry could make is not respecting the proptech sector. As our feature reveals, it is set to revolutionise asset management, and yes, while it’s true that most of the start-ups around today will fall by the wayside, others, faced with a ‘fly or die’ scenario, will look to do what VTS and Hightower have done and scale up their operations through mergers.
Expect more M&A activity next year and to see Property Week drill down into the many different types of proptech. In the meantime, enjoy reading about the proptech pioneers and if you’ve been assiduously trying to ignore the proptech phenomenon, stop being such an ostrich or a dinosaur.