Press Coverage & PropTech
Why Does Residential PropTech Get More Airtime?
Recently, we’ve noticed several questions posed by parties with an interest in PropTech businesses that operate in the commercial sector. Many of those questions ultimately boil down to a perception that commercial PropTech doesn’t get the attention it deserves, and certainly not as much as those businesses operating in the residential space.
This morning, YOPA announced a £15m fundraise which was picked up by mainstream media, including the Daily Mail (who effectively invested as DMGT).
Let’s explore three reasons why this may be.
Commercial PropTech is Not Revolutionary for Customers
The first theory for discussion is simply this: commercial PropTech businesses are not revolutionising industries.Commercial #PropTech businesses are not revolutionising industries.Click To Tweet
Rather, almost all of it is accretive to partnership working with the commercial property sector, be it agents, software suppliers, facility managers etc. The PR value simply isn’t there – who wants to read about new tools for residential surveyors for example, other than the surveyors themselves?
So many commercial PropTech solutions are simply efficiency drivers sold between businesses. Unfortunately, this just isn’t sexy to many (n.b. we admit to finding it sexy!)
Even the biggest deal in the industry – the $300m merger of Hightower and VTS – didn’t register outside trade circles.
Commercial PropTech is Not Disruptive
The “D” word is almost banned at PropTech Consult towers, but occasionally we will utter it under our collective breath. In this instance, let’s pose a question. How many of you can name 5 businesses that are disruptive to the commercial real estate industry? For the purpose of the discussion, let’s adopt Clayton Christensen’s definition of disruption where disruptive innovation “creates new markets and value networks.”
We contend that we are not yet at a stage in the evolution of the market where such businesses exist to any great extent and, whilst this will inevitably change, the absence of such businesses explains why there isn’t enormous mainstream interest in the sector.
Many firms are offering innovative solutions in Commercial PropTech but innovation is not disruption.Many firms are offering innovative solutions in commercial #PropTech but innovation is not disruption.Click To Tweet
Commercial PropTech Doesn’t Affect People’s Lives
It’s sad but true. Or rather, people don’t get hot under the collar and frothy about commercial property in the same way as they do when it comes to their residential properties. The ownership of commercial property is not spread as widely around the population and so the fascination levels will simply never reach those peaks.
Attitudes towards residential are much more emotional than in the logic driven commercial sector and that isn’t going to change any time soon. It is this reason that new innovation in the residential sector, be it truly disruptive or not, attracts so much airtime in trade and traditional media channels.
How Will this Change?
Eventually we will see increasing intersection of B2B and B2C PropTech solutions and those that are asymmetric in comparison to today’s industry participants have an enormous opportunity to attract airtime. They will almost certainly achieve this by offering truly different value propositions to, or in competition with, today’s incumbents.We will see increasing intersection of B2B and B2C #PropTech solutionsClick To Tweet
On the flipside, the intervening period offers a massive opportunity to create and cement competitive advantage amongst the commercial property sector before true disruption arrives.
Perhaps rather than complain about it, those with interests in commercial PropTech businesses should appreciate the ability to do cool stuff away from the public eye!
What do you think about this perspective? Perhaps you think the value of the underlying assets is the key? Or something else entirely. Let us know in the comments box