You’re the CTO for a large REIT. Seemingly every day, you speak to someone who is an expert in a specific domain about how their solution or platform is superior to their competitors’.
It’s simply impossible to keep up, because you have to be an expert in all of the domains of PropTech.
Even within each of these categories, there are countless subcategories.
Under facilities management, for example, you could have specific technology for rounds, preventative maintenance, work orders, utility budgeting, ESG reporting, tenant utility billing, equipment monitoring, and more…
Note – if you’re interested in the subcategories under operations technology, check out our Insider’s Buyer Guide to Operations Technology for CRE
It’s an insane amount of nuance to hold in one’s head, let alone stay abreast of the constant evolutions, iterations, mergers and improvements of all of these technologies.
So, what do you look for?
The technology itself is only half the battle.
The other half is about the people. It’s about deep understanding coupled with an ability to customize a solution to fit the unique needs on the other side of the table.
Partnership
In short, partnerships are a critical ingredient in any successful digital transformation.
In fact, with a true partnership between an innovative technology company and a clear-minded real estate portfolio, almost anything can be achieved.
Unfortunately, the model is foreign to many in the industry.
It even shows in the contracting process, where some portfolios will use their standard construction project vendor contract that is focused on milestones, indemnity and insurance.
While there is certainly a need for basic protection, a true partnership prioritizes growth, iteration, feedback and problem solving. Because unlike in construction, mistakes are rarely irreversible. And sometimes, the results can be orders of magnitude better than expected.
“We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs.”
“The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs.”
- Jeff Bezos
Going all in
Partnerships are valuable when both sides see a need that neither can address on their own.
Generally, the owner and operator will bring their domain expertise, their understanding of what workarounds they’ve put into place to get the job done. The technology company will bring the technical expertise and ability to not only build a solution, but integrate it into a broader experience.
Of course, this still begs the question of how to find a partner.
There are always going to be larger, legacy providers that are attractive due to their size and name brand, but which often lack speed and sophistication.
Likewise, there are always going to be powerful solutions that have been developed for specific niche in the industry, or that depend on the right infrastructure being in place, that simply don’t have the scope to integrate a solution into the bigger picture.
So, there are some “physical” characteristics that indicate a more likely candidate for innovation partner.
Perhaps more importantly however, is the nature of the proposed partnership. Clearly, both real estate organizations and technology startups will have competing priorities and limited resources, especially time.
Partnerships require both sides to lean in. It’s about spending the time to provide thoughtful feedback, it’s about the technology company’s bandwidth, the ability to iterate quickly. It’s about growing together.
At the same time, not every problem deserves the resources required to solve it.
The trick, therefore, is being able to determine the difference between a “science experiment” and true innovation.
True Innovation
To understand the difference, let’s compare two examples, both which involve data available through sensors.
In the first example, a sensor can track the utility consumption down to the individual end uses.
The thought occurs: if it’s possible to split out every end use, we can capture all of this data, combine end points into billing groups and compare our overall utility consumption with each of these groups.
Months later, operators and software engineers have finally smoothed out the minor variations between the aggregated amounts from the sensors and what the utility bill says, having completely lost sight of what the original goal was.
For what?
Even in success, this “solution” has delivered minimal value and can’t readily be applied to other assets.
In the second example, a sensor can track temperature.
The thought occurs: every winter, at least one building in the portfolio has a pipe exposed to outdoor air, freezes and bursts, causing tens or hundreds of thousands of dollars in damages.
Weeks later, on-site operators are getting alerts to their phone whenever a pipe is in danger of freezing. Even better, they no longer have to sleep on site during the coldest nights, saving the company overtime hours and making their job much less difficult.
The solution has quantifiable benefits, is highly repeatable, and can easily be rolled out across a portfolio. Better yet, it is easily combined into a larger technology experience around preventative maintenance that operators are already using.
Of course, it’s unlikely that this solution could’ve been built by either the real estate company or a technology company on their own. Each side has expertise and perspectives that are unique and, only combined, make a true innovation partnership.
The Enertiv Platform has been built in collaboration with our commercial real estate innovation partners. Schedule a demo today to see how they are seeing outsized returns from their input.
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