For long, the real estate market was stuck in old-age practices. However, the digital revolution of technologies like Artificial Intelligence and Machine Learning has disrupted the landscape bringing along a new breed of tech start-ups with creative solutions and the results are nothing short of amazing.
Although there are proactive real estate companies that have acquired these solutions, many are yet to clear the path for the disruption that is yet to come. Modern real estate companies know how valuable online presance is. Besides, building a custom website is no longer as complicated and expensive as it once was – more info. While a website is almost a must-have, some companies do far more than that and manage to use cutting-edge technologies to improve their business.
According to a 2018 report by Grand View Research, the global Real estate market holds the lion share of in the asset class, more than stocks and bonds combined. The same report indicates that this market is expected to hit $4,263.7 billion in revenues by the year 2025.
With such huge stakes, the opportunity for tech-oriented firms to compete in this landscape will continue to be driven by limited innovation and slow adoption of technology.
Here are three tech startups that already have boots on the ground in trying to make the real estate world a better place.
Whether you are buying or selling a house, an appraisal is one of the most important aspects of this process. It helps you establish the true market value of the property which essentially means you buy at the or sell at the current market price. Moreover, if you are looking to finance the acquisition through a mortgage loan, the lender requires an appraisal as security for the mortgage.
Bowery is a tech company redefining how real estate appraisals are done thanks to their apt and cutting-edge technology in big data. In realizing valuation and appraisal processes need to keep up with changing technology, they have developed cloud-based software that automates and optimizes the appraisals writing process compared to manually doing it.
Instead of using antiquated methods, Bowery’s intuitive software utilizes passive databasing to automatically pull data in public record data meaning the appraisers don’t need to spend countless hours mining for the data on the internet. Moreover, sales and rental and sales statistics are stored in the database and can be easily lifted through a map-based search.
Another excellent attribute of the Bowery property listing tool is the deployment of natural language generation. Essentially, it reduces the turn-around time by helping the appraisers generate clients’ reports easily without having to manually write everything.
In 2018, the start-up plugged in additional resources in form of seed funding campaign which has allowed them to create a mobile app that allows real estate appraisers tick off items in boxes, rather than note down everything down.
On the mention of the word blockchain, the first thing that comes in mind is Bitcoins. What most people don’t know is that this is a technology upon which Bitcoin and other synonymous cryptocurrencies are built on.
In 2017, Michael Arrington was the first person to use an Ethereum smart contract to buy real estate. Since then, it has been a hot topic in the real estate circles and start-ups like Atlant are starting to leverage the technology to build a business around it by creating a decentralized marketplace.
Given the overly fragmented real estate market, it’s very difficult for investors to acquire a piece of real estate property in a timely and secure manner. Atlant is trying to change this through P2P rentals and tokenized ownership.
Tokenization of real estate market eliminates liquidity problems as investors are able to convert the value of real estate asset into “tokens” to represent that asset and trade them at any moment in time. Moreover, the secretive operation in terms of property prices, lease rental rates, and valuations has left many investors on the losing edge. The Atlant blockchain system has brought transparency in all the transactions by availing them to the public.
Although real estate data is the driving force behind the whole industry, it’s one of the areas has persistently continued to resist disruption. This is because most real estates companies keep data stashed away in locker rooms or spread across regional databases in the case of US.
Driven by the hunger for this data, a real estate tech start-up by the name Enertiv utilizes data analytics to improve building commercial real estate projects operations.
The tech savvies go beyond BMS data visualization to tracking critical components of a building to individual pieces of equipment like air conditioners. As a result, they are able to deliver targeted insights into a building offering real-time comfort for tenants. The level of transparency in their software makes buildings operations and management easier, increasing profitability.
As you can see, there are real estate tech companies already making an impact in the real world. If you are looking to start a company in the same niche, here are the common mistakes to avoid.
According to Motley Fool, 80% of startups in the US fail within the first year while 50% fail within the first five years of operation. With the odds almost rigged against you from the onset, how do you create and build your real estate tech company from nothing and keep it running?
And although there are multiple reasons why tech business fails, there isn’t a full-proof blueprint to prevent this failure. However, there many things you can to counter these risks. Here are 3 pitfalls to look out for and how you can avoid them.
Tech industry is capital intensive. As such, starting out without a clear cut funding strategy could mean a short-lived lifespan or even failure to achieve significant traction. Even worse, most venture capitalists require to have minimum viable products before they can grant any finances. This is because the market is saturated with tech creatives competing for the coveted funding, prompting investors to set higher benchmarks for startups before they can commit any finances.
How then do you overcome that? Simply by treating your finances as a priority and not like an afterthought. Have a clear picture of the financial situation of your business. This will help you detect any financial troubles from a distance and how much more you need to inject into the business.
Another common mistake that start-ups make is over-spending their capital even before they have tried and validated their business. By doing so, they end up with a product mismatch at the very best, or excessive financial burden and management complexities.
To avoid making this mistake, practice patience and approach every business aspect with extra caution. Take time to validate your product against consumer behavior, and modify the mismatch to achieve long-term success.
When starting up, business founders always deems it appropriate to hire close allies or even former classmate even when they aren’t suited for certain positions. The problem with such a recruitment model is talent mismatch and redundant positions which don’t add value to your company.
Even if you face tech talent shortage, there’s always a way to organize remote work and it would give you access to a large pool of candidates to choose from. Individuals who not only identify with your vision, mission, and culture, but capable also capable of keeping up with the changing technology in the industry.
Depending on whom you ask, success is a relative term. On a personal level, most people will define success as helping others, while others derive success as seeing others happy.
Unfortunately, this logic cannot be applied in a business setting especially tech industry, where technology trends keep on evolving. You need performance metrics to gauge the progress of your business, what is working, and what isn’t. How can you measure the success of your business?
It’s a well-known fact that money is the lifeline of any business. On top of offering solutions to customers, you should be able to break-even within a certain period. Without profits, you wouldn’t have the financial muscle to wrestle your competitors or even actualize your dream.
As a general rule of thumb, your business should be profitable within 36 months. If your profits continue to be on the red after this period, you have no business but a hobby.
Developing tech solutions for businesses means your product will be in front of very many eyes. For instance, if you have created an app for a real estate, what did the actual client say about it? Secondly, what are the users saying about it?
If they don’t like it, chances of throwing your brand’s reputation are high. By listening to customer’s comments–both positive and negative– you are able to make adjustments to your processes and improve on your products.
Conducting internal performance reviews among the employees is another great way to measure the success of your business idea. By doing so, you get a clear idea of how efficient they are in delivering projects and the challenges they face while at it.
Performance reviews also help in innovation management as you scale up. As businesses start to grow, the chain of command becomes complex. This means the low cadres employees have issues in communicating with the top management on any innovative ideas that could propel the business to the next level. However, with performance reviews, it becomes easy for such ideas to be communicated.
This may sound like a no-brainer suggestion but its equally important. Comparing, your business with that of your competitors helps you know where you are and what you need to improve in order to remain ahead of the competition pyramid.
Sometimes, the innovations in the tech industry are also a good performance metric of success. You get to know of the internal shortcomings and also the skills deficit within your organization and readjust accordingly. For instance, if there is a new tech innovation or emerging software development trend in town that none of your employees is familiar with, you can arrange for them to be trained and gain the necessary skills.
Gone are days when real estate buying, selling, appraisal, etc entailed filling an endless stream of paperwork. The current breed of real estate tech companies has already laid the foundation by creating key technology trends that will continue to define the industry in the next few decades.
The next breed of companies will have to continue to build upon this foundation and innovate new solutions that will aid stakeholder within the industry to continue operating efficiently without spending a fortune. And with the increasing remote work popularity, companies no longer have to deal with the question like how to hire a developer as the shortages in tech talent is no longer an issue. The only question should be how to stay current with technology trends to avoid losing out?