Proptech Has A Communications Problem
Given time, tech finds a way to disrupt. And the real estate industry is a great example as it’s in the midst of its own disruption. However, what’s behind it – property technology or “proptech” – isn’t easily defined in a way that the savvy communicator can leverage for maximum media impact. A situation in which many emerging technologies and disruptive industries find themselves these days. In the case of proptech, it’s presented as an agglomeration of many different types of tech used in different ways within the space for a wide variety of purposes. Last year, for example, BuiltIn cited Forbes contributor Mike Shapiro’s definition: “The underlying technology that real estate professionals, underwriters, developers, property managers, title companies, banks and others use to manage and improve real estate transactions from start to finish.” That doesn’t help us as much as that would-be data, which is what every forward-looking technology needs these days. After all, data accessible through the internet is pretty much the underpinning of everything tech. So, how might we define proptech in a way that better represents what it sets out to accomplish and reinforces why others need to pay attention to the proptech sector?
Let’s start by looking at some of the other definitions that come a little closer to ones that might help with positioning the industry. Instead of focusing almost exclusively on the transactional component, for instance, it might be more accurate to think of proptech as “a set of technologies that transforms the way we design, build, sell, inspect and operate real estate.” [Source: NYCEDC] While that’s better, it also comes with the risk of pigeonholing proptech as everything technology-related that enhances real estate. The Pratt Institute, which recently hosted a proptech award ceremony, went a bit further in one direction related to this description, focusing on how proptech “manages the building life cycle” and for that, you need “Smart Building Technology.” If you combine the two, proptech then might be considered the interactions that take place around property that has been enhanced through technology. However, that’s still not entirely accurate as there are other elements that need to be represented if proptech is going to be seen as a technological force in its own right. Let’s consider what else should be part of a definition.
What is proptech?
- Proptech is a new way of thinking about real estate: It’s the developers who have sketched out a new platform for property management on a napkin at the diner where they’ve hatched their business plan.
- Proptech is leveraging innovation to make what’s old new again: It’s figuring out ways to retrofit pre-war buildings with technologies that make the last mile of package delivery more seamless or reduce carbon emissions by replacing the stalwart steam radiators.
- Proptech is creating financial connections between members of the real estate ecosystem: It’s re-setting how owners and tenants interact from a monetary standpoint – from how payments are made to connecting payment to a rewards mechanism.
- Proptech is making management for transparent: It’s replacing the manual way of handling things with interfaces accessible from multiple devices and available to those who are a part of the maintenance process.
So, it’s obvious that proptech requires easily understood and comprehensive definition in order to communicate its value more accurately to the various stakeholders that will use it. If it’s not clear who the intended audience is and how it’s defined is too fluid, there’s not going to be much confidence in it as a force in the marketplace. In other words, while it’s ultimately going to be used by everyone from property owners to tenants and everyone in between, it’s not just data, nor about the money spent, nor about a rent check paid, etc. How can we do that in a way that makes it accessible and useful simultaneously?