High implementation costs are keeping real estate players at bay from technology; the front-loaded costs are keeping them from adopting new-age technology solutions. The HexGn Global PropTech Survey 2019 was conducted across 40 countries and witnessed 406 respondents from different segments of the Real Estate life cycle participating in the survey.
While a growing number of real estate companies are working on creating a dedicated budget for PropTech adoption, the high costs involved make these players feel dicey about adopting any new tech-driven offerings.
Real estate is a cyclical business and is still dominated by the traditional mindset. Even though the real estate sector has gained considerable ground in the last three years, the shaky nature of global growth has kept the real estate stakeholders cautious. The trade war between the USA and China has made the situation no better.
The legacy software solutions have a high implementation cost with multiyear lock-in contracts, with the uberization of economy, the consumers prefer a pay per use model with no-obligation contracts. It is important to note that the high cost of implementation as a concern is not defined just by the lack of capital but also by fears about losing money by spending it on the wrong solution. Real estate players prefer time tested solutions, so even though a solution may be great, it will be an uphill task for the PropTech entrepreneur to charge heavy implementation costs without a strong track record.
In the last ten years, there has been a gradual decline in permanent jobs; most of the new jobs are temporary. This has led to a tectonic shift in cost structure, consumers and the business abhor fixed costs that cannot be shaved off when economy tanks. Real estate players are in sync with the broader ecosystem; PropTech entrepreneurs can no longer charge multi-million dollar implementation fees and lock their customers down with the high cost of switching. They PropTech entrepreneurs need to build a pay per use business model that syncs with the harsh cyclical nature of the real estate market, a case in point is how we can scale up cloud servers today without incurring substantial costs.
PropTech players have to develop a globally scalable product that may be implemented across different segments of real estate. This approach will have two-pronged benefits, firstly they will reduce the sectoral risk, and secondly, they will be able to spread their risk across different markets globally.
Based on the Global PropTech Survey insights, HexGn has developed a unique six months virtual program for PropTech entrepreneurs. This six months pre-acceleration program for PropTech entrepreneurs is designed to fast track their startup venture. The Pre acceleration program for PropTech Startups helps them in avoiding commonly made mistakes that can derail their Startup dreams. Through live sessions and data-based approach, the entrepreneurs learn to test hypothesis and potentially create an uncontested space for their venture. The program is run by experienced facilitators who bring global experience in launching and scaling up new ventures. Budding PropTech entrepreneurs can apply for the program at www.hexgn.com/startupready
HexGn believes that findings like these from the Global PropTech survey and industry-focused modules can help PropTech entrepreneurs in addressing any lagging areas that are keeping their venture from flying high.
HexGn, through its global research, industry events, and online programs equips individuals and businesses to tap into new opportunities and futureproof themselves. HexGn works with governments and private entities across the world.