How to Make Sense of the Chaos?
Updated: Dec 5, 2019
When executives at Rudin Management Company started looking for an operating system in 2009 to help them manage their building portfolio, the market for property technology was still in its infancy, and they came up empty-handed. A decade later, “proptech” is a hot buzzword in commercial real estate, as developers and investors seek an edge in buying, selling and managing their properties. And Rudin, a 94-year-old, family-run company, is now at the forefront of this booming tech sector.
There are over 3,000 companies coming onto the market, a lot of them new and untested. So how do you know what to look for and what technologies to bring into your portfolio? This is clearly a complex question and likely the most difficult one facing decision makers. We typically recommend the following 3 steps:
(1) Conduct a market analysis, understanding the different solutions that are available. Talk to all the vendors and get a sense of what is out there. Assess the strengths and weaknesses of different competitors and how those fit with your portfolio.
(2) You wouldn’t hire someone without checking references. So ask the companies to provide you with a few customers using the product so you can talk to them.
(3) Finally, and most importantly, talk to experts. There is a lot of noise in the proptech space and you need to be smart about space and understand the product attributes of different solutions. The way you engage with technology isn’t just about the bottom line, it’s ensuring you are partnering with companies that are going to be with you for the long haul. You don’t want to spend the time and money implementing a technology only to have that company go out of business in a year and you are left with shrapnel wounds across the organization, where the people on your team that have been trying this new technology that have been quick to adopt it, feel burned by the experience and are potentially that much less likely to use a new technology in the future.