Nadeem Shaikh, argues that the recent and massive growth that has the driven PropTech surge into the real estate industry is in part due to the new models of startup development that companies have been using. PropTech startups tend to fall into two categories, either offering support for real estate professionals, such as tools to enhance their services or their productivity or those that propose to replace real estate professionals. As such, they heavily rely on technology both to develop and to carry out these services, and it is the innovation and skill of these booming PropTech startups that can act as a model for all financial sectors where technology can make business flourish.
What marks out PropTech, and other sectors where individual startups have disrupted the established industry is the central integration of technology into the startups that enable companies to shape a new concept of how the estate industry should work. It is this that over just the past two years has spurred massive PropTech growth, not merely seeking to improve what came before but developing the industry in itself. PropTech can serve as an example of creating a new mindset for independent startups to flourish in sectors where technology can fundamentally change the way business is done.
In practical terms, what this has seen is companies combining several areas into one service they can provide as a unified whole. This allows new ground to consistently be broken, while integrating technology from the start covers heavy lifting that would otherwise need investment in merely to function. An example of this is a startup called Opendoor. They buy property online from homeowners, and act as a middleman selling it on to new customers. What makes this a PropTech model is the technology embedded throughout. The buying of the house is done at a price set by an algorithm that can cross-reference from vast pool of data, and once it is put back on the market, sales are highly targeted from that same data. Tours have been reworked to be self-guided by prospective buyers with automated locks and headsets, and the entire process can be run from a single city office.
The example of Opendoor highlights what other financial setups can learn from PropTech. Technology is used to redefine how services work, and to allow much greater viability for a startup to succeed. It allows a potential startup in any sector to be highly focussed, to operate faster and more efficiently, and as has been seen in the estate industry, to boom. Anyone looking to succeed as an independent business should use the example of PropTech, to use technology not just to improve their services, but to redefine them and create their own market.
Startups should look at PropTech and see a new way of doing business. The success in this industry can be seen with the four $1 billion companies that have burst into the real estate industry since the first spark of PropTech in 2012. In the last four years PropTech startups have registered a combined $6.4 billion dollars across a global market. PropTech is not merely a model for the way technology can be used in modern life but needs to be seen as a the creation of a system that can redefine how business is done, and it has been amply demonstrated that startups using the PropTech model can and have done surged past large established businesses, and has helped lead to a fundamental revaluation of how to be successful.