by Turner Levison, CEO, CommissionTrac
There is a steady stream of tech companies entering the commercial real estate market, bringing both innovative ideas and a hunger to disrupt this industry. Here are my thoughts on why this should be welcomed.
Disruption Is In The Eye Of The Beholder
We’ve all heard complaints about disruption. It’s a buzzword that gets tossed around quite a bit – traditionally in a negative light. The term was coined by business school professors to describe a strategy young companies use to collapse more established, larger companies, thus “disrupting” industries. I believe it’s more than strategy. I use it to describe the effect technology has to drive business innovation, resulting in industry adaptation and growth.
It took a little longer but commercial real estate is finally paying attention to technology. Disruptions to the way we’ve always done things are not cause for alarm but reasons for celebration. Property managers can now control entire buildings with smart devices, agents can execute documents on the internet with the rise of e-sign technologies like Docusign, and brokers can even tour a building from half way around the world with virtual/augmented reality technology.
The only companies that should be worried about disruption are the ones ignoring the rapidly changing technology landscape now impacting the commercial real estate industry.
How-To Recognize A Disruptor
Remember Blockbuster? When the internet exploded into mainstream use and was “disrupting” nearly every industry in the world, what did Blockbuster do? Nothing.
Netflix went all-in on a risky strategy to replace brick and mortar locations with DVDs sent in the mail. Both offered movie rentals, but Netflix changed the market entirely through a streamlined, innovative approach. Turns out people weren’t so attached to those insane late fees. Blockbuster lost marketshare and eventually went out of business.
When I think of disruption in commercial real estate, my mind jumps right to a few key areas:
Property Data & Deal Comps: In the past few years more than a handful of competitors have started up with big ambitions to shake up the deal data and comps market. Entrepreneurs at companies like Xceligent™ are taking newer, more effective approaches to sourcing and sharing commercial real estate transactional information and data.
Contact and Relationship Management: Instead of having to choose between Act! or Salesforce, now there are exceptional options like Apto, ReThink, and ClientLook that have expanded on the CRM concept and built products that best serve the needs of a commercial practitioner.
Lease and Property Management: Consider what View The Space (VTS) has done for property owners and tenant reps. What once was coordinated through complex spreadsheets, email updates, and phone calls has been replaced by a mutually beneficial platform. And there is a great deal of room for future innovation.
All of this disruption is a damned good thing and rarely results in bad outcomes for the “disrupted” industry. Did you realize there were only 61 companies from the Fortune 500 list in 1955 that still made the cut in 2014? Commercial real estate had a lot of good years during that stretch. So what’s my big takeaway? Brokers who are willing to pay attention, adapt, and grow with new “disruptive” technologies have remained dominant. Innovation can bring great power if you’re ready for it.