In the age of technological innovation, buildings are getting smarter, people are more connected, and the workforce has become more mobile. However, with change comes a increased pressure to compete and perform. The Internet has made almost every company vulnerable to greater competition. Barriers to entry are withering, innovations are easily copied, and for many legacy businesses "disruption" is everywhere.
As the real estate ecosystem continues to shift and consolidate, are real estate tech companies actually creating innovative solutions? Are today's commercial real estate tech startups making real estate more efficient?
According to a RE:Tech Survey, an overwhelmingly 95% of commercial real estate professionals believe real estate tech companies are not impacting their business or seizing the opportunity to innovate the industry. "There are only a handful of real estate startups making a difference," say a Commercial Real Estate Broker in San Francisco.
While Silicon Valley and Silicon Alley may be buzzing with startups, "many real estate tech companies are copying each other or picking the low hanging fruit," says a Senior Commercial Real Estate Broker in NYC.
A Lack of CRE Disruption?
A major challenge for many real estate tech companies has been customers acquisition. Could part of the problem simply be inertia or is there truly a lack of ground breaking innovation? While the answers could be a collective of both, the fact is "real estate tech has not gotten more fierce with competition," according to a Commercial Real Estate VP in Chicago.
Recommendation: The lack of competition and diversified product offerings impacts consumers, namely real estate professionals. While there are tremendous opportunities for real estate entrepreneurs to make a longterm and positive impact on the industry, the lack of innovation and competition has kept the industry at a slight standstill.
To begin the next phase, real estate tech startups and entrepreneurs should evaluate process deficiencies within the real estate services value chain and implement a digital strategy that collaborates rather than alienate or imitate.
Source: RE:Tech conducted a survey of 300 randomly selected commercial real estate brokers in New York, Chicago, Los Angeles, DC, Boston, Dallas, and San Francisco.